Core Competency of GM

Access to wide variety of Markets Significant contribution to the perceived benefit of the end product Difficult to imitate

End Product

Car

Business

Automobile

Core Product Core Competencies

Engine

Tolerance stacking

Pedestrian protection

Electrical systems

Resources of GMTCI
The resources that led to success of the xSDE engine: 1. Physical Assets firms infrastructure 2. Intangible Assets technological know how 3. Capabilities

Resource Based View

- Test for valuable resource 1. Inimitability (physical uniqueness, path dependency, causal ambiguity (intangible resources) and economic deterrence) 2. Durability 3. Appropriability or exploitability 4. Substitutability (subset of inimitability?) 5. Competitive superiority - Upgrading resources: Adding (alliances, mergers, acquisitions), and upgrading (investing, using own resources to replicate or create new ones). - Leveraging resources.

Advantages
Deep View
Core competency in tolerance stacking, pedestrian protection, electrical systems

Broad View More scope in increasing responsibilities Enhance learning

Going deep
It enables the centre to come out with technical innovations Thus GM by leveraging the improvised technology from its various centres can give a rare, inimitable product

Going broad

Advantages

Can concentrate completely on GM India

Disadvantages Integrating different centres can be difficult

Imprisonment of resources Penetration into technology is less by going broad Bringing a product to the market may require longer period Increase in R&D cost

Resource Based View

Test for valuable resource

Resource should be identified & can be tested using VRIO framework GMTCIs resources are competency in certain technical fields

Upgrading resources

Leveraging resources

This was done by GMTCI. Will be discussed later

This was done by GMTCI. Will be discussed later

VRIO Framework for the current scenario

VRIO Map GMTCI
Is it Valuable ?
Is it Rare ? Is it Inimitable ?

Exploited by Organization?

YES

NO

NO

NO

Competencies like tolerance stacking, CAE etc. is an important & valuable engineering aspect required for a world class vehicle

These competencies boasted by GMTCI is being practiced by all major automotive majors

These factors being intangible and the high employee shifting in this industry makes it easily imitable

Though the organization exploits GMTCI well the factors at this Centre not being rare & inimitable doesnt create any value

Note: YES + NO + NO + NO implies parity in competitiveness and normal economic implications

Reasons to go deep, with few more competencies

Why addition of few more competencies? Tolerance stacking, CAE etc are necessarily methods which can be replicated by any other centre These methods can be performed quickly but scope for innovations are very less in these methods So addition of few more technology intensive competencies to GMTCIs pocket will make it a important design house in GMs circle

Suggestions to go deep: Competencies in fuel efficient engines & frugal engineering should be added to GMTCIs portfolio The above specified competencies are specific to Indian scenario and these competencies can only be developed at GMTCI efficiently By going deep in these fields GMTCI has a lot of room for innovation & can significantly contribute to GM.

VRIO Framework after implementing the suggestions

VRIO Map GMTCI
Is it Valuable ?
Is it Rare ? Is it Inimitable ?

Exploited by Organization?

YES

YES

YES

YES

Competencies in Fuel efficient engines, frugal engineering, tolerance stacking, CAE etc. are valuable engineering aspects

These selected competencies, pertaining to India, developed exclusively in GMTCI will be rare

Since only a few factors are selected & developed, the extent of technical improvisation is high & thus inimitable in the short run

Globalization & recent developments in IT helps a firm to integrate its centres around the world

Note: YES + YES + YES + YES implies superiority in competitiveness & high economic implications

Success story of xSDE Engine

Resource Based View
Test for valuable resource

Upgrading resources

Leveraging resources

xSDE Engines success can be attributed to 2 factors:

VRIO framework indicates that resources at GMTCI doesnt provide the necessary competitive edge for GM Still xSDE from GMTCI was a huge success for GM India This was basically due to the fact that they leveraged the existing resource from design Centre at Tourin and upgraded themselves to a new level

Reasons for GMTCI to go broad

RBV analysis shows that GMTCI lacks value creating resources GMTCI is involved with intangible resources namely R&D resources which can always be easily imitated, not durable for a long period and thus does not give competitive superiority Only waves of innovation i.e. leveraging and upgrading the existing technology can create an edge for GMTCI e.g. xSDE Engine As GM is also into Indian automotive market it should necessarily widen the portfolio of GMTCI to replicate the success of xSDE The important barrier in leveraging is the overestimation of transferability of assets which has already been overcome as seen in the case of xSDE The enthusiasm of the employees to upgrade themselves is evident from the recorded video classes that they take GMTCI also had a good insulation from the recent recession as labor is cheap in India. So by creating a full fledged Centre in India will also give GM India a competitive edge and also GM an important asset