Test

In: Business and Management

Submitted By rajmit
Words 1116
Pages 5
In 1908, entrepreneur and visionary Billy Durant had created the first automotive conglomerate and the industry’s first vertically integrated company through a series of mergers and acquisitions. There were 25 automobile manufactures , suppliers and others who operated independently and report directly to Durant. There were duplication , internal competition and high cost of production. By 1920 due to poor management and economic recession , Durant lost control of the company to the Dupont family. The Doponts appointed Alfred P. Sloan to reorganize GM’s structure and management processes to be line with Dupont strategy

Sloan Strategy
Three major strategies
Ingenious Marketing policy : Pricing of various different cars from economic class to deluxe. Within the company there would be no duplication in the price fields. GM had car for every purse and purpose which gave competitive advantage from its competitors.
Commitment to innovation: Innovation includes annual vehicle change, high compression , over head valves , V-8 engines, automatic transmissions they also include financial innovations like credit financing facilities.
International Diversification: GM began exporting of cars in 1925 and the purchased British vehicle firm Vauxhall in 1925, German operation Opel in 1929 and Australian Holden in 1931.

Structure
Sloan devised a multidivisional structure to replace Durant’s loose management system. The system was known as “decentralization with coordinate control”. A General Manager run each car division, which contain assembly, production, engineering and sales. General Motor’s subsidiary and many assembly plants in 15 counties operated independently. Divisions were aggregated in group and each group was headed by group executive. This role reduced number of direct reports to CEO. Assisting CEO in his role was a Management Committee. Members of this…...

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