Closing Case Anatomy of a Failed Alliance-General Motors and Daewoo

Case Discussion Questions 1. What were GM's motives for entering into the alliance with Daewoo? What were Daewoo's motives for entering into an alliance with GM? Do you think these different motivations ultimately contributed to the dissolution of the alliance? Why? 2. Did the relative bargaining power of General Motors and Daewoo change over the lifetime of the alliance? If so, do you think this helped contribute to the dissolution of the alliance? How? 3. How might GM and Daewoo have reduced the chances of the alliance dissolving? What might they have done differently?

Internet Exploration Question This case focuses on the once promising alliance between General Motors and Daewoo - an alliance that soured over time and was dissolved in late 1992. The alliance began in 1984, when GM and Daewoo Group of Korea signed an agreement that called for each company to invest $100 million in a South Korean-based 50/50 joint venture. The joint venture, named Daewoo Motor Company, was established to manufacturer the Pontiac LeMans. At the outset, the alliance appeared to be very promising for both firms. GM would gain access to cheap labor in Korea and Daewoo would gain access to GM's superior engineering skills and an entre into the U.S. auto market. Unfortunately, the alliance never really worked. Shortly after the alliance began, South Korea was beset by labor problems, which forced wages up. Equally problematic was the poor quality of the cars rolling off Daewoo's production line. Daewoo also experienced disappointments with GM. Daewoo charged that GM executives were arrogant and treated them shabbily. In addition, GM blocked Daewoo's attempts to increase sales in Eastern Europe and the U.S. This case provides an example of both the potential benefits and pitfalls of a global strategic alliance. The Alliance Analyst is a management strategy publication dedicated solely to strategic alliances. Its mission is to help senior executives, like those at GM and Daewoo, better understanding what it takes to build a successful alliance. Visit the Alliance Analyst's website at {http://www.allianceanalyst.com/}. Spend some time navigating the site. Follow the links until you find an article about a successful strategic alliance or an article that discusses the attributes of alliance success. Read the article and then write a short summary. In your summary, focus specifically on what the article says about the characteristics of a successful strategic alliance.

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http://books.google.co.in/books?id=OSAkMZ3SMQ0C&pg=PA207&lpg=PA207&dq=gm+and+daewoo +questions&source=bl&ots=R0nEB-yvdJ&sig=1KQC34J-Qsj4ChIwt1DEI8MgvWs&hl=en&ei=iQ-

MTrbDEtHorQeg0oWEAg&sa=X&oi=book_result&ct=result&resnum=9&ved=0CFUQ6AEwCDge#v=o nepage&q=gm%20and%20daewoo%20questions&f=false http://www.autozine.org/Manufacturer/Korea/Daewoo.html http://www.scribd.com/doc/7456626/General-Motors-Strategic-Analysis http://www.plm.automation.siemens.com/de_de/Images/cs_gm_daewoo_en_tcm73-117667.pdf http://www.autoevolution.com/daewoo/history/ http://www.autoevolution.com/daewoo/history/