The Chevy Volt Situation, Essay Example

The chevy volt situation shows that number factors are considered while making strategic decision. One important consideration that such firm make is to ensure that the decision fits in to the firms internal and external situation, builds  a competitive advantage and improves company’s performances. For instance GM was on the verge of being declared bankrupt, something need to be done to change its performance. After considering the external and internal situation, the vice chairperson, Bob, and strategic planning, Manager Larry made a decision to design a type of car. Bob and Larry knew that the decision would the company performance and save the company from collapse.

Another important point to note is decision-making process in such complex company where the views of several parties have to be considered. In fact, the bob and Larry’s idea was first rejected since most of the manger did not support it.

There are a number of factors that influenced the Chevy volt project, they include rising oil, prices, and the issue of global warming and the fact that competitors such as Toyota had already designed such type of car whose reception in the market was good. In addition, the announcement of other small competitors such as Telsa motor that they would be bringing lithium ion sport carto market challenged GM to pursue the project.

Some of the challenges that Chevy volt project faced include, first GM  had already invested millions in developing fuel cell, an so most of the manger did not support the project. Second, the fear factor associated with creating a new product. Often new product can generate early buzz and excitement but fail to find traction in the market. This is due to the unknown factor, which can leave interested buyers on fence.

1. The falling global oil price against the forecast show that strategic plans are subject to change depending on the market trends. For this reason The strategic plans should be flexible
2. The new project was based on the prospect that the oil price would rise in the future, however the prices are falling. This will have a negative impact on the chevy volt since it will lose one of its most important competitive advantage- low operating costs.