Closing Case Chevy Volt
ANSWERS TO CASE DISCUSSION QUESTIONS
1. What does the Chevy Volt case tell you about the nature of strategic decision making at a large complex organization like General Motors?
Strategic decision making is often met with cognitive biases that are formed around prior victories or defeats.
2. What trends in the external environment favored the pursuit of the Chevy Volt project? Trends included increases in oil prices, global warming, costs of manufacturing lithium ion batteries was falling, and competitive use of battery technology for fuel efficiency.
3. What impediments to pursuing this project do you think existed within GM?
The volatility in oil prices should remain a concern as GM continues pursuing the project. However, the major impediment was the presence of GM senior management cognitive biases stemming from prior investments of fuel cells and the known difficulty in producing a large lithium ion battery.
4. The plan for the Chevy Volt seems to be based partly on the assumption that oil prices would remain high, and yet in late 2008, oil prices collapsed in the wake of a sharp global economic slowdown a. What does this tell you about the nature of strategic plans?
Strategic plans are often met with uncertainty and should be addressed through scenario planning. b. What do falling oil prices mean for the potential success of the Chevy Volt?
Falling oil prices would potentially mean the elimination of consumer need for increased fuel efficiency. Also, electricity would not have the potential to cost more than a gallon of gas and the government may question the need for a tax credit. c. Do you think oil prices will remain low?
Answers will vary to this question but it is unlikely that oil prices will ever be at the ancient $1 per gallon because the market has already adapted.
5. What will it take for the Chevy Volt to be a successful car? In light of your analysis, how risky do you think this
1. What does the Chevy Volt case tell you about the nature of strategic decision making at a large complex organization like General Motors?
Strategic decision making is often met with cognitive biases that are formed around prior victories or defeats.
2. What trends in the external environment favored the pursuit of the Chevy Volt project? Trends included increases in oil prices, global warming, costs of manufacturing lithium ion batteries was falling, and competitive use of battery technology for fuel efficiency.
3. What impediments to pursuing this project do you think existed within GM?
The volatility in oil prices should remain a concern as GM continues pursuing the project. However, the major impediment was the presence of GM senior management cognitive biases stemming from prior investments of fuel cells and the known difficulty in producing a large lithium ion battery.
4. The plan for the Chevy Volt seems to be based partly on the assumption that oil prices would remain high, and yet in late 2008, oil prices collapsed in the wake of a sharp global economic slowdown a. What does this tell you about the nature of strategic plans?
Strategic plans are often met with uncertainty and should be addressed through scenario planning. b. What do falling oil prices mean for the potential success of the Chevy Volt?
Falling oil prices would potentially mean the elimination of consumer need for increased fuel efficiency. Also, electricity would not have the potential to cost more than a gallon of gas and the government may question the need for a tax credit. c. Do you think oil prices will remain low?
Answers will vary to this question but it is unlikely that oil prices will ever be at the ancient $1 per gallon because the market has already adapted.
5. What will it take for the Chevy Volt to be a successful car? In light of your analysis, how risky do you think this