This document summarizes General Motors' new product development processes before and after declaring bankruptcy in 2009. Before bankruptcy, GM used a "silo approach" where different departments like research, engineering, and manufacturing only met monthly, resulting in slow development times and missed opportunities. Notable failures included the Pontiac Aztek. After bankruptcy, GM shifted to cross-functional teams, included customer input earlier, cut unprofitable brands, and focused on quality over cost cutting to speed up development and better adapt to market trends. GM has since launched electric vehicles like the Chevy Volt and invested in future innovations like self-driving cars.

1. New Product
Development
General Motors
Roberto Castillo
Jenilee Kilbury
April 23, 2013
MGMT-762

2. GM Through the Years
• Video
• New Product Development
• Pre and Post Bankruptcy
• Future NPD at GM
• Recommendations

3. Pre-Bankruptcy
NPD1908-2009

4. New Product Development
(1989)
• Process and Product Innovation
• Manufacturing
• Cost Reductions
• Car models and features
• 80% Applied Research
• 53% focused on short range projects
• 12% Basic Research
• Only 8% of researchers’ time focused on NPD
Koerner, E. Technology Planning at General Motors. Long Range Planning, Vol 22, No 2, p 9-
19, 1989.

5. New Product Development
• Silo Approach
• Research, Engineering and Manufacturing meet once a month
• No formal communication between groups
• “Advanced Engineering Staff”
– Role is to be “matchmaker between enabling technologies and the
advanced production groups”
– Gatekeeper
New
Design
Marketing Engineering Manufacturing
Koerner, E. Technology Planning at General Motors. Long Range Planning, Vol 22, No 2, p 9-
19, 1989.

6. Pontiac Aztek
• Sold from 2001-
2005
• Best year sold >30k
• Ranked on Time
Magazine’s
• Worst Cars of All
Time (2007)
• Worst Inventions of
All time (2010)
• Greatly Anticipated
• Projected sales of
50-60k per year
http://www.cars.com/pontiac/aztek/2003/expert-reviews/

7. Disadvantages to Silo Approach
• 10-15 year time to market
• Product decisions reviewed by as many as 70 executives
• 2 months to make a decision
• 27 facilities each working on their own products
• No collaboration
• Overlap in work
• Missed opportunities

8. • Approval of products were not necessarily based on clear
commercial potential
• Lack of Environmental Monitoring in market
• Inability to determine trends
New
Design
Marketing Engineering Manufacturing

9. Process of Innovation
• 4 Phase product program
management
• Decision/Approval after each
phase
• “Pre-Phase 0”
• Basic Research
• Phase 0
• Critical path planning chart –
100 tasks
• Concept vehicle
• Corporate approval
Koerner, E. Technology Planning at General Motors. Long Range Planning, Vol 22, No 2, p 9-
19, 1989.

10. Process of Innovation
• Phase 1
• Detailed design
• Prototype produced to
validate design
• Phase 2
• Testing
• Pilot Production
• Phase 3
• Final production
• Continuous Improvement of
design
Koerner, E. Technology Planning at General Motors. Long Range Planning, Vol 22, No 2, p 9-
19, 1989.

11. What went wrong?
• Cutting costs – quality decline
• Introduction of Japanese cars
• Lack of environmental scanning
• 90’s market shifting toward fuel-efficiency
• Attempted Saturn and Electric Car
• Focused on large sedans and SUVs
• 2000’s Gas Prices Up – GM not prepared
• Silo Approach NPD
• Slow time to market
• Not agile – unable to quickly adapt to changing trend

12. Post-Bankruptcy
NPD2009- Present

13. After Chapter 11
• Strategy
• Culture Creation
• Cross Functional Team
• Include the VOC
• Cut brands
• Decrease cost of marketing
• Goal: Reduce speed to market
• Weekly meeting to discuss ideas

14. Management Changes
• Culture Change
• Focus on quality Vs. cost savings
• Speak up in development meetings
• “Pride Builder”
• You won’t win with Good Enough Attitude

15. Demographic Changes
• Penetrate into new markets
• Baby boomers are not driving as much
• Need to appeal to younger generation

16. Strategic Expansion
• Expanding into new strategic group
• Creating a “luxury”
• Cadillac Vs. BMW 3 Series

17. New Product Development
• Trends
• Toyota Prius
• Go Green Effect
• Chevy Volt
• Electric car
• Gas
• Innovation = increase on Stock Price
• Public Offering had a good response
• Increase stock price

18. Products: Chevrolet Volt

19. Product Innovation: Chevrolet EN-V
• Electric Networked Vehicle
• Avoid Crashes
• No gas
• Drive and Park itself

20. GM and Risk with Product
Innovation
• Technology improving faster than customer
needs
• Too sophisticated for users
• Organization capabilities
• Patents
• Copy cat attack first

21. Process Innovation
• Acquisition of Financing Companies
• Facilitated dealers to sell cars

22. Future
• Penetrate with new products into new markets
• Australia, China, Brazil
• Radical Innovation
• Keep developing self-electric driving cars
• Differentiation Strategy
• Sustainable Production
• Keep increasing engine efficiency
• MPG

23. Recommendations
• Eliminate any formal process
• Incentive creativity on key players
• Increase ideas to the Funnel
• Ambidextrous firm
• Radical Innovation = Blue Ocean
• Incremental Innovation
• Cut cost by Improving efficiency

24. Recommendations
• Outside Partners
• Educate “Gas Station” to start new business as
energy stations
• Risk( High Switching cost)
• Increase collaboration with Academia
• Towards new energy production
• Keep aiming towards the Luxury Car business
• Customers with high purchasing power

25. Recommendations
• Create unit of environmental scanning

26. Questions?

27. Thank You