Section 5: Short case study (2.5 scores) Develop a Corporate level Strategic model on the basis of provided case scenario to the best of your strategic management knowledge and analytical capability Vago SUSTAINABILITY issue GENERAL MOTORS AND THE ELECTRIC CAR in 2003, top man- agement at General Motors (GM) decided to discontinue fur- ther work on its EV1 electric automobile Work ing versions of the car had been leased to a limited number of people, but never sold GM required every EV1 to be returned to the company Environmentalists protested that GM stopped making the car just to send a message to government policy makers that an electric car was bad business Management responded by stating that the car would never have made a profit. In an April 2005 meeting of GM's top management team, Vice Chairman Robert Lutz suggested that it might be time to build another electric car. He noted that Increased from US$6.6 billion in 2006 to US$8.1 billion in 2007 Several new models were canceled to tree up resources. The battery lab was under pressure to design batteries that could propel the Volt 40 miles before a small gasoline engine would recharge the battery and extend the range to 600 miles Douglas Drauch, battery tab man ager, said. "Fifty years from now, people will remember the Volt-like they remember a'53 Corvette The Volt was released with much fanfare in October 2010, and by 2012 GM was selling 2500 a month at just over US$40,000 per car. The company was still struggling to match manufacturing with sales and still make a profit In the meantime, Nissan, Ford, and Toyota were making significant moves in the battery-powered car business Nissan released the teat, Ford released the electric Focus, and Toyota's Prius hybrid had made Toyota look environmen- Toyota offered the Plug-in Prius and the all-electric RAV4 tally sensitive, whereas GM was viewed as making gas which claimed to get 103 MPG Overarching all of the "hogs." The response was negative. Lutz recalled one established car company efforts was Tesla. In 2012 they launched the Model S that was 100% electric and could executive saying, "We lost $1 billion on the last one. Do travel 265 miles per charge. By 2016. Tesla had 50,000 you want to lose $1 billion on the next one?" vehicles on the road and was seen as the leader in electric Even though worldwide car ownership was growing 5% car technology annually, rising fuel prices in 2005 reduced sales of GM's The Volt remained a hybrid vehicle and sales fimped profitable SUVs, resulting in a loss of US$11 billion Board along By mid-2015 the Volt was selling less than members began signaling that it was time for management to take some riskier bets to get the company out of financial trouble. In February 2006, management reluctantly approved developmental work on another electric car. At the time, no one in GM knew if batteries could be made small enough power a car, but they knew that choices were limited 9,000 units a year and the Leaf was only a bit better sell ing roughly 15,000 units a year. So, in late 2016, Chevy planned to release the Chevy Bolt The Bolt is an all-electric vehide with a range of 200 miles and a price tag in the $38,000 range. It has yet to be seen if the electric car can gain a significant foothold on the U.S. market. According to Larry Burns, Vice President of R&D and Strate gic Planning, This industry is 98% dependent on petroleum GM has conduded that that's not sustainable" in the mean- time, Tesla Motors had been founded and was planning an all-battery powered model to be released in 2008 Chairman and CEO Richard Wagoner Jr. surprised the world at the January 2007 Detroit Auto Show with a vow to start developing an electric car called the Chevrolet Volt. It would plug into a regular electric outlet, leapfrog the established competition, and be on sale in 2010 Management created a new team dedicated to getting hybrid and electric cars to market. The R&D budget was SOURCES: www.chevrolet.com/bolt-ev-electric vehicle html, www.teslamotors.com/about; S. Blanco, "Nissan Leaf, Chevy Volt have best sales month of 2015," Autoblog. (www.autoblog .com/2015/06/02issan-leaf-chevy-volt-best-sales-month-2015. J. Bennett, "GM Expects Volt Sales to Set Monthly Record, The Wall Street Journal (August 30, 2012). http://blogs.ws.com Idrivers-seat/2012/08/30/gm-expects-volt-sales-to-set-monthly -record/7KEYWORDS-volt), "12 Electric Cars for 2012, CNN Money. http://money.cnn.com/galleries/2012/autos/1201 /gallery. electric-hybrid-cars fortune/9.html), D Welch, "GM. Live Green or Die," Business Week (May 26, 2008), pp. 36-41; "The Drive for Low Emissions, The Economist's Special Report on Busi- ness and Climate Change (une 2, 2007), pp. 26-28 Section 5: Short case study (2.5 scores) Develop a Corporate level Strategic model on the basis of provided case scenario to the best of your strategic management knowledge and analytical capability Vago SUSTAINABILITY issue GENERAL MOTORS AND THE ELECTRIC CAR in 2003, top man- agement at General Motors (GM) decided to discontinue fur- ther work on its EV1 electric automobile Work ing versions of the car had been leased to a limited number of people, but never sold GM required every EV1 to be returned to the company Environmentalists protested that GM stopped making the car just to send a message to government policy makers that an electric car was bad business Management responded by stating that the car would never have made a profit. In an April 2005 meeting of GM's top management team, Vice Chairman Robert Lutz suggested that it might be time to build another electric car. He noted that Increased from US$6.6 billion in 2006 to US$8.1 billion in 2007 Several new models were canceled to tree up resources. The battery lab was under pressure to design batteries that could propel the Volt 40 miles before a small gasoline engine would recharge the battery and extend the range to 600 miles Douglas Drauch, battery tab man ager, said. "Fifty years from now, people will remember the Volt-like they remember a'53 Corvette The Volt was released with much fanfare in October 2010, and by 2012 GM was selling 2500 a month at just over US$40,000 per car. The company was still struggling to match manufacturing with sales and still make a profit In the meantime, Nissan, Ford, and Toyota were making significant moves in the battery-powered car business Nissan released the teat, Ford released the electric Focus, and Toyota's Prius hybrid had made Toyota look environmen- Toyota offered the Plug-in Prius and the all-electric RAV4 tally sensitive, whereas GM was viewed as making gas which claimed to get 103 MPG Overarching all of the "hogs." The response was negative. Lutz recalled one established car company efforts was Tesla. In 2012 they launched the Model S that was 100% electric and could executive saying, "We lost $1 billion on the last one. Do travel 265 miles per charge. By 2016. Tesla had 50,000 you want to lose $1 billion on the next one?" vehicles on the road and was seen as the leader in electric Even though worldwide car ownership was growing 5% car technology annually, rising fuel prices in 2005 reduced sales of GM's The Volt remained a hybrid vehicle and sales fimped profitable SUVs, resulting in a loss of US$11 billion Board along By mid-2015 the Volt was selling less than members began signaling that it was time for management to take some riskier bets to get the company out of financial trouble. In February 2006, management reluctantly approved developmental work on another electric car. At the time, no one in GM knew if batteries could be made small enough power a car, but they knew that choices were limited 9,000 units a year and the Leaf was only a bit better sell ing roughly 15,000 units a year. So, in late 2016, Chevy planned to release the Chevy Bolt The Bolt is an all-electric vehide with a range of 200 miles and a price tag in the $38,000 range. It has yet to be seen if the electric car can gain a significant foothold on the U.S. market. According to Larry Burns, Vice President of R&D and Strate gic Planning, This industry is 98% dependent on petroleum GM has conduded that that's not sustainable" in the mean- time, Tesla Motors had been founded and was planning an all-battery powered model to be released in 2008 Chairman and CEO Richard Wagoner Jr. surprised the world at the January 2007 Detroit Auto Show with a vow to start developing an electric car called the Chevrolet Volt. It would plug into a regular electric outlet, leapfrog the established competition, and be on sale in 2010 Management created a new team dedicated to getting hybrid and electric cars to market. The R&D budget was SOURCES: www.chevrolet.com/bolt-ev-electric vehicle html, www.teslamotors.com/about; S. Blanco, "Nissan Leaf, Chevy Volt have best sales month of 2015," Autoblog. (www.autoblog .com/2015/06/02issan-leaf-chevy-volt-best-sales-month-2015. J. Bennett, "GM Expects Volt Sales to Set Monthly Record, The Wall Street Journal (August 30, 2012). http://blogs.ws.com Idrivers-seat/2012/08/30/gm-expects-volt-sales-to-set-monthly -record/7KEYWORDS-volt), "12 Electric Cars for 2012, CNN Money. http://money.cnn.com/galleries/2012/autos/1201 /gallery. electric-hybrid-cars fortune/9.html), D Welch, "GM. Live Green or Die," Business Week (May 26, 2008), pp. 36-41; "The Drive for Low Emissions, The Economist's Special Report on Busi- ness and Climate Change (une 2, 2007), pp. 26-28