GM Success in China

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GM success in the Chinese market is due to the fact that it has found the perfect dealer and also the company found out how to build the right car for the right market. According to Joe in his article, he mentioned that GM has proved the company's global strategy by its success in the Chinese market. Basically, the success of GM in China is mainly due to the joint venture with Shanghai Automotive Industry Corp.

Although, the Chinese market is a massive market, many companies failed to comply with it. In general, the Chinese people are very difficult to absorb, because they are ethnocentrism, meaning that they are very proud of their products and difficult to adapt to others. Thus, according to Dunne, president of Automotive Resources Asia Ltd., GM developed vehicles that are small, fuel-efficient cars deigned for the Asia market with the image of an American product.

According to the article GM sold 665,390 vehicles in 2005, with 11.2% market share in China. These figures show the success of GM in China and how fast the company reached this level, where on the other hand, the company is struggling to keep customers in the United States. Not only that but also GM's loss in the third quarter of 2005 from North America operations was $2-billion, with comparison to the gain from China the company made $114 million within the same period.

Returning to Barney's framework, GM's unique historical condition is one reason behind the success of GM. The company was the second if not the first in the industry of automotive, which gave the company world reputation in this industry and gave the company the first mover advantage.

In Barney's framework, it says that the interaction between physical resources and socially complex organizational resources is at the heart of many of the difficulties that US firms have had imitating the manufacturing success of Japanese firms. This is the case with GM's loss back home in the United States. "Despite investment in physical technology at five hundred leading U.S. manufacturing firms of over $800 billion, quality and costs are often still not comparable to those of competing Japanese firms." (Naj, 1993)

According to the manager of Middle East operations when I asked him about the success of GM in China, during a meeting that was organized by AUS study tour to Florida, he answered GM was successful to find the perfect dealer which is Shanghai Automotive Industry Corp. That's it, GM was able to find the perfect dealer and it is not due to its brilliance.