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Thursday, 27 June 2013

Disruptive Innovation at General motors

General motors’ is one of the largest automotive industries in USA, founded in the year 1908 it has become one of the largest MNC in the world. In the 1960 it has a big market share but this has subsequently gone down due to other industries joining in such as ford, Nissan, and Toyota among others. The entering of new markets in the automotive industries such as mentioned above brought a lot of challenge to general motors and in order for them to survive in the market they had to bring in diversification, this included producing of variety to capture the whole market such products included Cadillac, Baojun, Chevrolet, Opel, Wuling, Isuzu, GMC, Pontillac, and Buick among others. As much as General motors needed to diversify their market it was necessary to keep up its quality and have a relatively price.

The organization faces a tough competition with industries such as Toyota and Ford in the market; they have equally the same kinds of products with a low price and high quality as compared to GM. These industries also have high research capabilities which enable them to enter the market with easy. Beside all these challenges general motors has been able to brand itself well into the market to an extent that it is hard to be ignored, with globalization enforce the market supply has transcends borders. This has helped the company to have a competitive advantage over the rest and worry less on the local market entry by its rivalry. It is also difficulty to set up an industry such as the GM one since its needs a lot of capital to start therefore the threat of entry is minimal.

Here we put to consideration the buying power in the market where is being influenced by the economics factors. The consumers want reasonable priced products with the maintenance of quality. They are also very sensible with the environment, where they need vehicles that emit less carbon to the atmosphere that keeping the environment clean.

General motors need to maximize on its strength and minimizing on its weakness this will enable the organization to grow faster and avoiding major loses. One of its biggest strength is its branding where it’s known to have very high quality products. Second is diversification of products. The introduction of engine efficient cars such as the electric ones has given it an advantage, its heavy presence globally almost in 120 countries, its financial capabilities is also not to ignored since it has a muscle of finances which can help the company in innovation.

The company should avoid some product recall where by some of its product were recalled due to windscreen problem if these continues can reduce customer loyalty. It should also look at its workers welfare well and ensure that they are motivated to work.

The company has chosen to use disruptive innovation, this is the introduction of new products to the market or changing most features of the products to bring in a total new appearance. This brings in new products that are of high quality than the originals and this ends up adding value to the consumer. The challenge of this innovation is that it increases the price of the product due to the modification made on it therefore the company has to ensure that it convinces its customer to buy the product despite its price increase. At general motors this innovation can be applied in two ways product and market innovation. Product innovation is where by the company introduces the use of electric cars which are efficient and conducive to the environment. Although these electric cars are only limited to small cars if could applied to the big and heavy vehicles consumers would save a lot of fuel since they just need to charge their engine.

With the new innovation in place the company need to inform its consumers about the existing of its new products; this is done to retain the market and also increasing the scope of the market. In this case the company engages on research to identify the needs of its consumer before it introduces its new product or features.

These where the company share its innovation strategy with others players in the field to avoid huge losses in case the strategy does not work also enables the company to share also create barriers of  entry to new products or substitute by rivalry company hence domination of the market. Although it is advantageous it has some disadvantages the rivalry company can take the secrets and come up with substitute products that can undermine the original products or sabotage the whole process, therefore the company should be very cautious or avoid collaborations at all.

There is always resistant to change many would like the status quo to remain, but we know that change is inevitable, therefore for these innovation to succeed  there is need to prepare the employees psychological to accept the change positively. There is also need to work on the companies inside politics which would be resistant to the new innovation; this can be done by bringing in new people to work on the project which is non-partisan. Failure before can also scare the company to venture into new innovation this can be overcomed by diagnosing the past failures and voiding them.

This can be done by testing the products before introducing it to the larger market; this would save a lot of costs, by avoiding products recalls after they have been introduced to the larger market. Good communication on the advantages of the new products can also make the product to be accepted in the market with easy. The products can also be patent to avoid coping without authorization.

Disruptive innovation is more commendable for general motors’ company since customer are demanding products of high quality with  much affordable price, and also company has a high research base internally. With the introduction of electric cars it has a high competitive advantage over other automotive industries the challenge is to come up with heavy commercial electric cars that can work efficiently. 

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