title: Chevrolet Volt

text: In May 2011 Kelley Blue Book (KBB) projected the 2011 Chevrolet Volt resale value at just over after 36 months, the length of a typical lease, which represents 42% of the car's suggested retail price (MSRP). KBB explains that even though the residual value seems low, the projection considered that the first 200,000 Volts sold qualified for a federal tax credit, which effectively reduces the MSRP to , making the represent 51% of its original value after the tax credit. In comparison, KBB notes, the 2011 Toyota Prius has a projected residual of 46% after 36 months. KBB's estimate assumed a gasoline price around per gallon in 2014. For 2012, Kelley Blue Book expected the Volt to retain 42% of its original value after 3 years and 27% after 5 years. Based on these figures, in November 2011 KBB awarded the Volt with the 2012 Best Resale Value Awards in the plug-in electric car category. KBB explains that the residual value for the Volt is lower than the market 35.5% average due to the federal tax credit, which lowers the transaction price and pushes down the residual value.


title: Chevrolet Volt

text: Consumer Reports' analysis show that many Chevrolets lose about half of their purchase price after three years of ownership, and if the Volt depreciates the same, seems a reasonable estimate. However, Consumer Reports have noted that fuel-efficient hybrids and diesel models often depreciate far less than most vehicles, which might increase the Volt's resale value after three years above the estimate. Additionally, if gasoline prices continue to rise or if the tax credits expire, the demand for used Chevrolet Volts could quickly increase, raising their market value. On the other hand, if the next-generation Volt's battery has twice the capacity and cost less, as General Motors has claimed, the first generation Volts would be obsolete when the new ones come out in 2015. Considering these assumptions, Consumer Reports said, "At this point we believe it's still unclear how the Volt will fare."


title: Chevrolet Volt

text: General Motors is sponsoring the Pecan Street demonstration project at the Mueller neighborhood in Austin, Texas. The project objective is to learn the charging patterns of plug-in electric car owners, and to study how a residential fleet of electric vehicles might strain the electric grid if all owners try to charge them at the same, which is what the preliminary monitoring found when the plug-in cars return home in the evening. , the community has nearly 60 Chevrolet Volt owners alone thanks to GM's commitment to match the federal government's rebate incentive, which halves the purchase price of the Volt.


title: Chevrolet Volt

text: Chevrolet began taking orders in May 2011 and deliveries began in September 2011 in major cities only. During 2012 the Volt was the best selling plug-in car in Canada, outselling all other PEVs combined. Despite a 24% reduction from 2012 sales, the Volt continued as the top selling PEV in the Canadian market in 2013, and again in 2014. , the Volt continued to rank as the all-time top selling plug-in electric car in Canada. Since September 2011, a total of 16,653 new Volts have been delivered in Canada through the end of October 2018. The monthly sales record was set in May 2018 with 731 deliveries. Sales in 2016 set a calendar year record of 3,469 units delivered.


title: Chevrolet Volt

text: The suggested retail price (MSRP) for the 2012 Chevrolet Volt started at ( in June 2011). This excludes any charges, fees, and optional equipment—and is before any available subsidies or incentives for qualifying buyers. The Canadian market offers the Volt in one standard trim level with two option packages: "Premium Trim Package" and "Rear Camera and Park Assist Package". Some provinces are offering Government incentives including Ontario, Quebec (both at ) and British Columbia has announced their new "LiveSmart BC" program in which the Chevrolet Volt qualifies for a incentive/rebate as well as towards charging equipment.


title: Chevrolet Volt

text: The European version of the Volt, the Opel Ampera (known as the Vauxhall Ampera in the United Kingdom), was unveiled at the Geneva Auto Show in March 2009 and also was exhibited at the 2009 Frankfurt Auto Show. Opel developed the battery control modules for the Ampera at the Opel Alternative Propulsion Center Europe in Mainz-Kastel, Germany. The production version of the Ampera was unveiled at the 2011 Geneva Motor Show. The Ampera was assembled at the Detroit/Hamtramck Assembly plant, Michigan.


title: Chevrolet Volt

text: The main differences between the Volt and the Ampera are in their styling. The Ampera has a distinctive front and rear fascia, with a large cut-out in the rear bumper. The Opel Ampera features more stylized alloy wheels as standard, and the side skirts are body-colored rather than black. In the inside there are only minor differences and both versions share the same exact powertrain and battery pack. A key operational difference was that the Ampera has four drive modes, one more than the 2011/12 model year Volt. The additional option is "City Mode", which adapts battery management to the needs of commuter travel. City mode or "battery hold" engages the range-extender immediately, allowing to save the energy currently stored in the battery, and when switched off, the range-extender stops and the Ampera is then able to use the energy saved in the battery for pure electric driving, for example for traveling urban areas or restricted zones, such as the European low emission zones or to allow the Ampera to qualify for an exemption of the London congestion charge The 2013 model year Volt included the "Hold Drive" button to allow drivers to conserve battery-pack energy for use at a particular time of their choice.


title: Chevrolet Volt

text: General Motors production target for 2012 was to manufacture 10,000 Amperas for sale in Europe, 6,000 destined for Opel and 4,000 for Vauxhall in the UK, plus an additional 2,000 Volts were to be made available for the region. The carmaker targeted the Ampera for business fleet market and local government agencies, where Opel has a strong customer base, while the Volt is aimed at retail customers. According to Opel, by June 2011 around 5,000 customers across Europe had reserved an Ampera, with fleet or business customers representing 60% of reservations, and a total of 7,000 orders were received by March 2012, with Benelux, Germany, and the United Kingdom as the top markets in terms of orders.


title: Chevrolet Volt

text: The first deliveries of the Chevrolet Volt in Europe took place on November 30, 2011, to the U.S. Embassy in France. Distribution of the Opel Ampera to dealerships began in December 2011, but deliveries to customers were delayed until February 2012 because Opel decided to wait until the NHTSA completed its investigation of the Volt's battery fire risk after a crash. Since May 2012 the Vauxhall Ampera is available through the Zipcar carsharing club in London, Bristol, Cambridge, and Oxford.


title: Chevrolet Volt

text: The Opel/Vauxhall Ampera was Europe's top selling plug-in electric car in 2012 with 5,268 units and captured a 21.5% market share of the region's plug-in electric passenger car segment. , the Ampera held a market share of almost 10% of European registration of plug-in electric cars since 2011. The market share in the Netherlands was 40% and 10% in Germany. Ampera sales fell 40% in 2013 to 3,184 cars, and within the plug-in hybrid segment, the Ampera was surpassed in 2013 by the Mitsubishi Outlander P-HEV (8,197), Volvo V60 plug-in (7,437), and the Prius plug-in (4,314). In 2013 the Ampera ranked eighth among Europe's top selling plug-in electric vehicles, and its market share fell to about 5%. During the first five months of 2014, only 332 units had been sold, down 67% from the same period in 2013. In July 2014, Opel announced that due to the slowdown in sales, they would discontinue the Ampera after the second generation Volt launch—and that between 2014 and 2018, they plan to introduce a successor electric vehicle in Europe. Ampera sales totaled 939 units in 2014, and only 215 units during the first nine months of 2015.


title: Chevrolet Volt

text: , Opel/Vauxhall Ampera sales totaled just over 10,000 units since 2011, with the Netherlands as the leading market with 5,031 Amperas registered, followed by Germany with 1,542 units, and the UK with 1,250 units registered by the end of June 2015. The Netherlands is also the top selling Volt market in Europe with 1,062 units registered through December 2014, out of about 1,750 Volts sold through 2014.


title: Chevrolet Volt

text: In February 2011 Opel announced they would offer the Ampera throughout the Eurozone for a uniform (), including VAT. Prices by country still varied due to different trim levels in each market. The Chevrolet Volt also has a uniform price that starts at ( in May 2012) including VAT. The Opel Ampera is eligible to several subsidies and tax breaks available for plug-in electric vehicles in several European countries.


title: Chevrolet Volt

text: In the UK, the Vauxhall Ampera starts at ( in May 2012) before discounting the Plug-in Car Grant The Chevrolet Volt was also available in the UK at ( in May 2012) before the government grant. All Volts in the UK came standard with leather interior.


title: Chevrolet Volt

text: General Motors unveiled the Chevrolet Volt in Shanghai under its Chinese name of 沃蓝达 (Wo Lan Da) in September 2010. The first Volts, out of the 10-vehicle demonstration fleet, arrived in China by late December 2011. The demonstration program is taking place in Beijing, Tianjin and Shanghai.


title: Chevrolet Volt

text: The Volt went on sale in China by late 2011 with pricing starting at (around ) and sales are limited to eight Chinese cities: Beijing, Shanghai, Hangzhou, Suzhou, Wuxi, Guangzhou, Shenzhen, and Foshan. GM explained that 13 dealerships were selected in the eight cities, and they were chosen because these ""cities have more elites who are inclined to try new technologies and lead the fashion tide.""


title: Chevrolet Volt

text: However, according to General Motors, in a move illegal under WTO rules, the Chinese government refused to allow Chevrolet Volt owners access to up to in government subsidies available for plug-in vehicles unless GM had agreed to transfer intellectual property to a joint venture with a Chinese automaker for at least one of the Volt's three core technologies: electric motors, complex electronic controls, and power storage devices, whether batteries or a fuel cell. General Motors negotiated with the Chinese government to let the Volt qualify for the subsidies without the technology transfer, but , the subsidies were available only for electric cars made by Chinese automakers. As a result of the high import duties, General Motors reported in August 2012 that sales are minimal, those of a very low-volume car. According to LMC Automotive, a total of 18 Volts have been sold in China through June 2012.


title: Chevrolet Volt

text: In March 2012, General Motors announced that an agreement was signed with the China Automotive Technology and Research Center (CATARC) to manage the Volt demonstration fleet in Beijing and to gather feedback from the fleet usage for one year. The demonstration Volts were scheduled to be delivered in April 2012.


title: Chevrolet Volt

text: The Buick Velite 5 was introduced at the 2017 Shanghai Auto Show, a rebadged second generation Chevrolet Volt tailored for the Chinese market. The Velite 5 was manufactured in China.


title: Chevrolet Volt

text: Deliveries of the Holden Volt in the Australian market began in December 2012, and the first Volt was delivered to the U.S. Ambassador in Canberra. Pricing starts at (around US$62,598). In November 2011 the first Holden Volt arrived in Australia for a series of evaluation tests. Holden stated that the Volt underwent numerous modifications to better suit it to Australian roads, though the test vehicles were still left-hand drive.


title: Chevrolet Volt

text: The Holden Volt was available through 49 select Holden dealerships throughout metropolitan and rural Australia, with 18 in Victoria, 11 in New South Wales, 9 in Queensland, 7 in Western Australia and 4 in South Australia. A total of 80 Holden Volts were sold during 2012, and 101 units in 2013. A total of 246 had been sold in the country by mid April 2015, with the stock of the first generation almost empty. General Motors announced that it would not build the second generation Volt in right-hand-drive configuration, so the Volt was discontinued in Australia when the remaining stock sold out.


title: Chevrolet Volt

text: General Motors do Brasil announced that it would import from five to ten Volts to Brazil during the first semester of 2011 as part of a demonstration and also to lobby the federal government to enact financial incentives for green cars. If successful, General Motors would adapt the Volt to operate on ethanol fuel, as most new Brazilian cars are flex-fuel.


title: Chevrolet Volt

text: In December 2010, General Motors announced plans to introduce the Volt in limited numbers into Japan in 2011 for technology and market test purposes. Exports for retail sales will depend on the results of this trial.


title: Chevrolet Volt

text: The second generation Volt was released for retail customers in December 2015. Pricing starts at 638,000 pesos (~), and it is available in Mexico City, Monterrey, Guadalajara, Querétaro, and Puebla. Sales totaled 36 units and in 2017 and 34 in 2018.


title: Chevrolet Volt

text: The Holden Volt was released in New Zealand through three dealerships, with one in Auckland, Christchurch and Wellington. Deliveries began in late 2012 and pricing starts at (around ). By mid-2015, only 16 units were registered despite a price dropped to . Due to low sales of the first generation model, the second generation Volt was not available in New Zealand.


title: Chevrolet Volt

text: Combined global Volt/Ampera sales passed the 100,000 unit milestone in October 2015. The Volt/Ampera family was the world's best selling plug-in electric car in 2012 with 31,400 units sold. The Opel/Vauxhall Ampera was Europe's top selling plug-in electric car in 2012 with 5,268 units, representing a market share of 21.5% of the region's plug-in electric passenger car segment. However, during 2013 Ampera sales fell 40%, and the declining trend continued during 2014 and 2015.


title: Chevrolet Volt

text: , global Volt/Ampera family sales totaled about 177,000 units since its inception in December 2010, including over 10,000 Opel/Vauxhall Amperas sold in Europe up to December 2015. Until the end of 2018, the Volt/Ampera family of vehicles listed as the world's all-time top-selling plug-in hybrid, when it was surpassed by the Mitsubishi Outlander P-HEV (200,000 units by March 2019).


title: Chevrolet Volt

text: , Chevrolet Volt sales are led by the United States with 157,054 units delivered, followed by Canada with 16,653 units through September 2018, and the Netherlands with 1,062 Volts registered through December 2015. Out of the 9,989 Opel/Vauxhall Amperas sold in Europe through December 2015, 5,031 were registered in the Netherlands, 1,542 in Germany, and 1,279 in the UK by the end of September 2015, together representing 78% of Ampera sales.


title: Chevrolet Volt

text: The following tables present retail sales of the Volt and Ampera variants through December 2015 for the top-selling national markets by year since deliveries began in December 2010. Demonstration vehicles allocated to dealerships are not included in retail sales reports while they are used for test drives.


title: Chevrolet Volt

text: In 2018, General Motors decided to end production in March 2019. The primary reason given was that the Volt is a sedan, and sales of traditional sedans were in decline. Car salesmen were proving resistant to selling the car because it was more complicated (and thus took more of their time) to explain how the vehicle operated. Marketing trends showed that sales of hybrids were dropping as more customers were turning to all-electric vehicles like the Chevrolet Bolt. The range-anxiety associated with all-electric vehicles had been in decline due to better battery technology, and most hybrid drivers were turning on their gas-powered engines less frequently. The battery technology developed for the Volt had already been incorporated into the Bolt.


title: Chevrolet Volt

text: The Cadillac Converj is a plug-in hybrid concept car first unveiled at the 2009 North American International Auto Show. It incorporated the propulsion system from the Chevrolet Volt, including the Voltec powertrain. In August 2011, General Motors announced it would produce the Converj as the Cadillac ELR. The first 2014 ELRs rolled off the production line in late May 2013. These were pre-production units destined for testing purposes and production for retail customers started at the end of 2013. The ELR was released to retail customers in the U.S. in December 2013.


title: Chevrolet Volt

text: At the 2010 Auto China show General Motors unveiled the Chevrolet Volt MPV5 Concept. The Volt MPV5 is a plug-in crossover hybrid and has a top speed of and an electric range of . The MPV5 integrates design elements from the Volt, with a body style very similar to the Chevrolet Orlando and four inches larger than its predecessor, Chevrolet HHR.


title: Chevrolet Volt

text: The Opel Monza Concept is a four-seat coupe plug-in hybrid concept car with gullwing door unveiled at the 2013 Frankfurt Motor Show. The concept shares the same basic plug-in hybrid setup as the Chevrolet Volt and Opel Ampera, but using a turbocharged 1 L 3-cylinder natural gas-powered engine as its range extender instead of General Motors’ current 1.4 L gasoline engine. According to Opel, this concept is the role model for the next generation of Opel cars, and because of its modular chassis design, future cars based on it would be able to accommodate gasoline, diesel or electric power.


title: Chevrolet Volt

text: In 2008, General Motors was concerned about how the United States Environmental Protection Agency (EPA) would test the Volt to determine its official fuel economy rating. The controversy centered on whether, by including a gasoline engine, the Volt should be classified as a hybrid rather than an electric car as claimed by General Motors. If tested with the same EPA tests used by other hybrids, the Volt's EPA fuel economy rating would be around due to the current EPA test for hybrids disallowing vehicles from boosting their mpg rating using stored battery power. General Motors stated that the Volt is an entirely new type of vehicle that the EPA's current fuel economy tests are not suited to rate and that a new test should be devised for this emerging class of hybrid-electrics. General Motors also advocated for a more simplified mpg calculation method to take into account the range of a plug-in hybrid while running solely on electricity. Because the Volt can travel on batteries alone, GM argued that most drivers with a daily commute of less than that distance would drive only in electric mode, so long as they recharged their vehicle at work or at home overnight.


title: Chevrolet Volt

text: The EPA official rating issued in November 2010 included separate fuel economy ratings for all-electric mode and gasoline-only mode, with an overall combined city/highway gasoline-electricity fuel economy rating of equivalent (MPG-e). To address the variability of the fuel economy outcome depending on miles driven between charges, EPA also included in the Volt's fuel economy label a table showing fuel economy and electricity consumed for five different scenarios driven between a full charge, and a never-charge scenario. According to this table the Volt's fuel economy goes up to equivalent (MPG-e) if driven between full charges. Also, in recognition of the multiple operating modes that a plug-in hybrid can be built with (all-electric, blended, and gasoline-only), for the new fuel economy and environment label that will be mandatory in the U.S. beginning in model year 2013, EPA and the National Highway Traffic Safety Administration (NHTSA) issued two separate fuel economy labels for plug-in hybrids. One label is for extended-range electric vehicles, like the Chevy Volt, with two modes: all-electric and gasoline-only; and a second label for blended mode that includes a combination of all-electric, gasoline and electric operation, and gasoline only, like a conventional hybrid vehicle.


title: Chevrolet Volt

text: In August 2009, General Motors released its estimated city fuel economy rating for the Volt of of gasoline plus of electricity using the EPA's proposed method for evaluating plug-in hybrids. The U.S. Environmental Protection Agency (EPA) issued a statement clarifying that the "EPA has not tested a Chevy Volt and therefore cannot confirm the fuel economy values claimed by GM." In July 2010, GM explained that their estimate was based on a formula that had not been officially approved and that they had been awaiting the EPA's decision on how the equivalent fuel economy of plug-in hybrids would be estimated.


title: Chevrolet Volt

text: The official EPA rating was issued in November 2010 and became the agency's first fuel economy label for a plug-in hybrids. The EPA rated the 2011 Volt combined fuel economy at in all-electric mode, and in gasoline-only mode, for an overall combined fuel economy rating of equivalent. The label also shows the combined city-highway fuel economy in all-electric mode expressed in traditional energy consumption units, rating the Volt at .


title: Chevrolet Volt

text: In 2009, the Presidential Task Force on the Auto Industry said that "GM is at least one generation behind Toyota on advanced, "green" powertrain development. In an attempt to leapfrog Toyota, GM has devoted significant resources to the Chevy Volt" and that "while the Chevy Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable."


title: Chevrolet Volt

text: A 2009 Carnegie Mellon University study found that a PHEV-40 will be less cost effective than a HEV or a PHEV-7 in all of the scenarios considered, due to the cost and weight of the battery. Jon Lauckner, a vice president at General Motors, responded that the study did not consider the inconvenience of a electric range and that the study's cost estimate of per for the Volt's battery pack was "many hundreds of dollars per kilowatt hour higher than what it costs to make today."


title: Chevrolet Volt

text: In early 2010, it was reported that General Motors would lose money on the Volt for at least the first couple of generations, but it hoped the car would create a green image that could rival the Prius.


title: Chevrolet Volt

text: After the Volt's sales price was announced in July 2010, there was concern expressed of the launch price of the Volt and its affordability and resulting popularity, especially when the federal subsidies of were taken into account in the development of the car.


title: Chevrolet Volt

text: General Motors CEO Edward Whitacre Jr. rejected as "ridiculous" criticism that the Volt's price is too expensive. He said that "I think it's a very fair price. It's the only car that will go coast to coast on electricity without plugging it in, and nobody else can come close." Despite the federal government being the major GM shareholder due to the 2009 government-led bankruptcy of the automaker, during a press briefing at the White House a Treasury official clarified that the federal government did not have any input on the pricing of the 2011 Chevrolet Volt.


title: Chevrolet Volt

text: There have also been complaints regarding price markups due to the initial limited availability in 2010 of between to above the recommended price, and at least in one case a mark up in California. Even though the carmaker cannot dictate vehicle pricing to its dealers, GM said that it had requested its dealers to keep prices in line with the company's suggested retail price.


title: Chevrolet Volt

text: In May 2011 the National Legal and Policy Center announced that some Chevrolet dealers were selling Volts to other dealers and claiming the federal tax credit for themselves. Then the dealers who bought the Volts sell them as used cars with low mileage to private buyers, who no longer qualify for the credit. General Motors acknowledged that 10 dealer-to-dealer Volt sales had taken place among Chevrolet dealers, but the carmaker said they do not encourage such practice.


title: Chevrolet Volt

text: In September 2012, Reuters published an opinion/editorial article where it claimed that General Motors, nearly two years after the introduction of the car, was losing on each Volt it built. The article concluded that the Volt is "over-engineered and over-priced" and that its technological complexity has put off many prospective buyers, due to fears the car may be unreliable. GM executives replied that Reuters' estimates were significantly flawed as they also allocated the vehicle's research and development program costs only against the number of Volts sold in the United States (), instead of spreading the total costs over the entire lifetime of the model, as well as including those units sold in Europe and other countries. GM explained that the investments will pay off once the innovative technologies of the Volt are applied across multiple current and future products.


title: Chevrolet Volt

text: In June 2011 a Volt that had been subjected by the National Highway Traffic Safety Administration (NHTSA) to a side pole impact crash test followed by a post-impact rollover, caught fire three weeks later in the test center parking lot, burning nearby vehicles. The battery was found to be the source of the fire. After the fire, both Chevrolet and the NHTSA independently replicated the crash test and a subsequent vehicle rotation procedure to test for any fluid leakage, but in their first attempt they could not reproduce the conditions under which the battery pack ignited. The NHTSA said it had "concluded that the crash test damaged the Volt's lithium-ion battery and that the damage led to a vehicle fire that took several weeks to develop." In further testing of the Volt's batteries carried out by NHTSA in November 2011, two of the three tests resulted in thermal events. One battery pack was rotated 180 degrees within hours after it was impacted and began to smoke and emit sparks after rotation. In the other case, the battery pack that was crashed-tested one week earlier and that had been monitored since the test caught fire. The NHTSA then took an uncommon step on November 25, 2011, and opened a formal safety defect investigation "without any data from real-world incidents" to examine the potential risks involved from intrusion damage to the battery pack in the Chevrolet Volt. After the initial Volt fire, the NHTSA examined the Nissan Leaf and other plug-in electric vehicles and said its testing "has not raised safety concerns about vehicles other than the Chevy Volt."


title: Chevrolet Volt

text: As a result of this investigation, GM announced that it would offer any new GM car in exchange to any Volt owner who has concerns while the federal investigation was taking place. In December 2011, the company said that if necessary they were prepared to recall all the vehicles and repair them upon determination of the cause of the fires, and also announced they would buy back the car if the owner was too afraid of the potential for a fire. GM's CEO also said that it may be necessary to redesign or make changes to the battery pack depending on the recommendations from federal officials. As of 1, 33 December Volt owners in the U.S. and 3 in Canada had requested a loaner car. As of December 5, General Motors reported that a couple dozen Volt owners had requested the carmaker to buy back their cars, and the company had already agreed to repurchase about a dozen. Before the carmaker agrees to buy back each vehicle, other options are explored as GM primarily wants to provide loaner cars, but "if the only way we can make them happy is to repurchase it, then we will," a GM spokesman said. General Motors explained that the buy back price includes the Volt purchase price, plus taxes and fees, less a usage fee based on how many miles the car has been run. As of January 5, 2012, GM reported that around 250 Volt owners had requested either a loaner vehicle or a potential buyback.


title: Chevrolet Volt

text: The NHTSA also said it was working with all automakers to develop postcrash procedures to keep occupants of electric vehicles and emergency personnel who respond to crash scenes safe. Additionally, NHTSA advised to be aware that fires may occur a considerable amount of time after a crash. General Motors said the first fire would have been avoided if GM's protocols for deactivating the battery after the crash had been followed. These protocols had been used by GM since July 2011 but were not shared with the NHTSA until November 2011. In another statement the carmaker stated that they "are working with other vehicle manufacturers, first responders, tow truck operators, and salvage associations with the goal of implementing industrywide protocols."


title: Chevrolet Volt

text: Customer deliveries of the Opel Ampera in Europe were delayed until the NHTSA completed its investigation of the Volt's battery fire risk to make sure the vehicle is safe. However, deliveries of the first Chevrolet Volts in Europe began in France in November 2011. Deliveries of the Vauxhall Ampera in the UK continued as scheduled for May 2012. Opel Ampera deliveries began in February 2012.


title: Chevrolet Volt

text: On January 5, 2012, General Motors announced that it would offer a customer-satisfaction program to provide modifications to the Chevrolet Volt to reduce the chance that the battery pack could catch fire days or weeks after a severe accident. The carmaker described the modifications as voluntary enhancements and stated that neither the car nor the battery was being recalled. General Motors determined the June fire was the result of a minor intrusion from a portion of the vehicle into a side section of the battery pack. This intrusion resulted in a small coolant leak inside the battery of approximately . When the vehicle was put through a slow roll, where it was rotated at 90-degree increments, holding in each position for about five minutes, an additional of coolant leaked. With the vehicle in the 180 degrees position (upside down), the coolant came in contact with the printed circuit board electronics at the top of the battery pack and later crystallized. Three weeks later this condition, in combination with a charged battery, led to a short circuit that resulted in the post-crash fire.


title: Chevrolet Volt

text: General Motors explained the modifications will enhance the vehicle structure that surround the battery and the battery coolant system to improve battery protection after a severe crash. The safety enhancements consist of strengthening an existing portion of the Volt's vehicle safety structure to further protect the battery pack in a severe side collision; add a sensor in the reservoir of the battery coolant system to monitor coolant levels; and add a tamper-resistant bracket to the top of the battery coolant reservoir to help prevent potential coolant overfill. The additional side safety structural pieces have a total weight of , and their function is to spread the load of a severe side impact away from the battery pack, reducing the possibility of intrusion into the pack.


title: Chevrolet Volt

text: During December 2011, GM conducted four crash tests of Volts with the reinforced steel and upgraded cooling system, resulting in no intrusion to the battery and no coolant leakage. On December 22, 2011, the NHTSA also subjected a modified Volt to the same test that led to the original fire, with no signs of the damage that is believed to have been the cause. The NHTSA said "the preliminary results of the crash test indicate the remedy proposed by General Motors today should address the issue of battery intrusion" though its investigation remained open. General Motors declined to say how much the modifications would cost.


title: Chevrolet Volt

text: All 12,400 Chevrolet Volts produced until December 2011, including all Amperas in stock at European dealerships, were scheduled to receive the safety enhancements. Since production was halted during the holidays, the enhancements were in place when production resumed in early 2012. Sales continued, and dealers modified the Volts they had in stock. General Motors sent a letter to Volt owners indicating that they could schedule the service appointment to protect their batteries beginning in the last week of March 2012. General Motors also decided to replace the 120-volt charging cords in most of the nearly 10,000 Volts sold since late 2010. The new cords were enhanced to add durability, and some of the chargers built after February 5 have the new cords.


title: Chevrolet Volt

text: On January 20, 2012, the National Highway Traffic Safety Administration closed the Volt's safety defect investigation related to post-crash fire risk. The agency concluded that "no discernible defect trend exists" and also found that the modifications recently developed by General Motors are sufficient to reduce the potential for battery intrusion resulting from side impacts. The NHTSA also said that "based on the available data, NHTSA does not believe that Chevy Volts or other electric vehicles pose a greater risk of fire than gasoline-powered vehicles." The agency also announced it has developed interim guidance to increase awareness and identify appropriate safety measures regarding electric vehicles for the emergency response community, law enforcement officers, tow truck operators, storage facilities and consumers.


title: Chevrolet Volt

text: The chairman of the Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending, U.S. Representative Jim Jordan held hearings on January 25, 2012, to investigate why the NHTSA opened a formal investigation only five months after the first postcrash battery fire occurred in June. The subcommittee of the House Committee on Oversight and Government Reform wanted to determine if government officials, including from NHTSA, purposely held back information on the Volt fire for political reasons. Both Daniel Akerson, General Motors CEO, and David L. Strickland, NHTSA administrator, denied any wrongdoing.


title: Strategic management

text: In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of resources and an assessment of the internal and external environments in which the organization operates. Strategic management provides overall direction to an enterprise and involves specifying the organization's objectives, developing policies and plans to achieve those objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision-making in the context of complex environments and competitive dynamics. Strategic management is not static in nature; the models can include a feedback loop to monitor execution and to inform the next round of planning.


title: Strategic management

text: Corporate strategy involves answering a key question from a portfolio perspective: "What business should we be in?" Business strategy involves answering the question: "How shall we compete in this business?"


title: Strategic management

text: Management theory and practice often make a distinction between strategic management and operational management, with operational management concerned primarily with improving efficiency and controlling costs within the boundaries set by the organization's strategy.


title: Strategic management

text: Strategy is defined as "the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals." Strategies are established to set direction, focus effort, define or clarify the organization, and provide consistency or guidance in response to the environment.


title: Strategic management

text: Strategic management involves the related concepts of strategic planning and strategic thinking. Strategic planning is analytical in nature and refers to formalized procedures to produce the data and analyses used as inputs for strategic thinking, which synthesizes the data resulting in the strategy. Strategic planning may also refer to control mechanisms used to implement the strategy once it is determined. In other words, strategic planning happens "around" the strategic thinking or strategy making activity.


title: Strategic management

text: Strategic management is often described as involving two major processes: "formulation" and "implementation" of strategy. While described sequentially below, in practice the two processes are iterative and each provides input for the other.


title: Strategic management

text: "Formulation" of strategy involves analyzing the environment in which the organization operates, then making a series of strategic decisions about how the organization will compete. Formulation ends with a series of goals or objectives and measures for the organization to pursue.


title: Strategic management

text: "Strategic decisions" are based on insight from the environmental assessment and are responses to strategic questions about how the organization will compete, such as:


title: Strategic management

text: The answers to these and many other strategic questions result in the organization's strategy and a series of specific short-term and long-term goals or objectives and related measures.


title: Strategic management

text: The second major process of strategic management is "implementation", which involves decisions regarding how the organization's resources (i.e., people, process and IT systems) will be aligned and mobilized towards the objectives. Implementation results in how the organization's resources are structured (such as by product or service or geography), leadership arrangements, communication, incentives, and monitoring mechanisms to track progress towards objectives, among others.


title: Strategic management

text: Running the day-to-day operations of the business is often referred to as "operations management" or specific terms for key departments or functions, such as "logistics management" or "marketing management," which take over once strategic management decisions are implemented.


title: Strategic management

text: In 1988, Henry Mintzberg described the many different definitions and perspectives on strategy reflected in both academic research and in practice. He examined the strategic process and concluded it was much more fluid and unpredictable than people had thought. Because of this, he could not point to one process that could be called strategic planning. Instead Mintzberg concludes that there are five types of strategies:


title: Strategic management

text: In 1998, Mintzberg developed these five types of management strategy into 10 "schools of thought" and grouped them into three categories. The first group is normative. It consists of the schools of informal design and conception, the formal planning, and analytical positioning. The second group, consisting of six schools, is more concerned with how strategic management is actually done, rather than prescribing optimal plans or positions. The six schools are entrepreneurial, visionary, cognitive, learning/adaptive/emergent, negotiation, corporate culture and business environment. The third and final group consists of one school, the configuration or transformation school, a hybrid of the other schools organized into stages, organizational life cycles, or "episodes".


title: Strategic management

text: Michael Porter defined strategy in 1980 as the "...broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals" and the "...combination of the "ends" (goals) for which the firm is striving and the "means" (policies) by which it is seeking to get there." He continued that: "The essence of formulating competitive strategy is relating a company to its environment."


title: Strategic management

text: Some complexity theorists define strategy as the unfolding of the internal and external aspects of the organization that results in actions in a socio-economic context.


title: Strategic management

text: Michael D. Watkins claimed in 2007 that if mission/goals answer the 'what' question, or if vision answers the 'why' questions, then strategy provides answers to the 'how' question of business management.


title: Strategic management

text: The strategic management discipline originated in the 1950s and 1960s. Among the numerous early contributors, the most influential were Peter Drucker, Philip Selznick, Alfred Chandler, Igor Ansoff, and Bruce Henderson. The discipline draws from earlier thinking and texts on 'strategy' dating back thousands of years. Prior to 1960, the term "strategy" was primarily used regarding war and politics, not business. Many companies built strategic planning functions to develop and execute the formulation and implementation processes during the 1960s.


title: Strategic management

text: Peter Drucker was a prolific management theorist and author of dozens of management books, with a career spanning five decades. He addressed fundamental strategic questions in a 1954 book "The Practice of Management" writing: "... the first responsibility of top management is to ask the question 'what is our business?' and to make sure it is carefully studied and correctly answered." He wrote that the answer was determined by the customer. He recommended eight areas where objectives should be set, such as market standing, innovation, productivity, physical and financial resources, worker performance and attitude, profitability, manager performance and development, and public responsibility.


title: Strategic management

text: In 1957, Philip Selznick initially used the term "distinctive competence" in referring to how the Navy was attempting to differentiate itself from the other services. He also formalized the idea of matching the organization's internal factors with external environmental circumstances. This core idea was developed further by Kenneth R. Andrews in 1963 into what we now call SWOT analysis, in which the strengths and weaknesses of the firm are assessed in light of the opportunities and threats in the business environment.


title: Strategic management

text: Alfred Chandler recognized the importance of coordinating management activity under an all-encompassing strategy. Interactions between functions were typically handled by managers who relayed information back and forth between departments. Chandler stressed the importance of taking a long-term perspective when looking to the future. In his 1962 ground breaking work "Strategy and Structure", Chandler showed that a long-term coordinated strategy was necessary to give a company structure, direction and focus. He says it concisely, "structure follows strategy." Chandler wrote that: ""Strategy is the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals"."


title: Strategic management

text: Igor Ansoff built on Chandler's work by adding concepts and inventing a vocabulary. He developed a grid that compared strategies for market penetration, product development, market development and horizontal and vertical integration and diversification. He felt that management could use the grid to systematically prepare for the future. In his 1965 classic "Corporate Strategy", he developed gap analysis to clarify the gap between the current reality and the goals and to develop what he called "gap reducing actions". Ansoff wrote that strategic management had three parts: strategic planning; the skill of a firm in converting its plans into reality; and the skill of a firm in managing its own internal resistance to change.


title: Strategic management

text: Bruce Henderson, founder of the Boston Consulting Group, wrote about the concept of the experience curve in 1968, following initial work begun in 1965. The experience curve refers to a hypothesis that unit production costs decline by 20–30% every time cumulative production doubles. This supported the argument for achieving higher market share and economies of scale.


title: Strategic management

text: Porter wrote in 1980 that companies have to make choices about their scope and the type of competitive advantage they seek to achieve, whether lower cost or differentiation. The idea of strategy targeting particular industries and customers (i.e., competitive positions) with a differentiated offering was a departure from the experience-curve influenced strategy paradigm, which was focused on larger scale and lower cost. Porter revised the strategy paradigm again in 1985, writing that superior performance of the processes and activities performed by organizations as part of their value chain is the foundation of competitive advantage, thereby outlining a process view of strategy.


title: Strategic management

text: The direction of strategic research also paralleled a major paradigm shift in how companies competed, specifically a shift from the production focus to market focus. The prevailing concept in strategy up to the 1950s was to create a product of high technical quality. If you created a product that worked well and was durable, it was assumed you would have no difficulty profiting. This was called the production orientation. Henry Ford famously said of the Model T car: "Any customer can have a car painted any color that he wants, so long as it is black."


title: Strategic management

text: Management theorist Peter F Drucker wrote in 1954 that it was the customer who defined what business the organization was in. In 1960 Theodore Levitt argued that instead of producing products then trying to sell them to the customer, businesses should start with the customer, find out what they wanted, and then produce it for them. The fallacy of the production orientation was also referred to as marketing myopia in an article of the same name by Levitt.


title: Strategic management

text: Over time, the customer became the driving force behind all strategic business decisions. This marketing concept, in the decades since its introduction, has been reformulated and repackaged under names including market orientation, customer orientation, customer intimacy, customer focus, customer-driven and market focus.


title: Strategic management

text: In 1985, Ellen Earle-Chaffee summarized what she thought were the main elements of strategic management theory where consensus generally existed as of the 1970s, writing that strategic management:


title: Strategic management

text: Chaffee further wrote that research up to that point covered three models of strategy, which were not mutually exclusive:


title: Strategic management

text: The progress of strategy since 1960 can be charted by a variety of frameworks and concepts introduced by management consultants and academics. These reflect an increased focus on cost, competition and customers. These "3 Cs" were illuminated by much more robust empirical analysis at ever-more granular levels of detail, as industries and organizations were disaggregated into business units, activities, processes, and individuals in a search for sources of competitive advantage.


title: Strategic management

text: By the 1960s, the capstone business policy course at the Harvard Business School included the concept of matching the distinctive competence of a company (its internal strengths and weaknesses) with its environment (external opportunities and threats) in the context of its objectives. This framework came to be known by the acronym SWOT and was "a major step forward in bringing explicitly competitive thinking to bear on questions of strategy". Kenneth R. Andrews helped popularize the framework via a 1963 conference and it remains commonly used in practice.


title: Strategic management

text: The experience curve was developed by the Boston Consulting Group in 1966. It reflects a hypothesis that total per unit costs decline systematically by as much as 15–25% every time cumulative production (i.e., "experience") doubles. It has been empirically confirmed by some firms at various points in their history. Costs decline due to a variety of factors, such as the learning curve, substitution of labor for capital (automation), and technological sophistication. Author Walter Kiechel wrote that it reflected several insights, including:


title: Strategic management

text: Kiechel wrote in 2010: "The experience curve was, simply, the most important concept in launching the strategy revolution...with the experience curve, the strategy revolution began to insinuate an acute awareness of competition into the corporate consciousness." Prior to the 1960s, the word competition rarely appeared in the most prominent management literature; U.S. companies then faced considerably less competition and did not focus on performance relative to peers. Further, the experience curve provided a basis for the retail sale of business ideas, helping drive the management consulting


title: Strategic management

text: Completion of an "Importance-Performance Matrix" forms "a crucial stage in the formulation of operations strategy", and may be considered a "simple, yet useful, method for simultaneously considering both the importance and performance dimensions when evaluating or defining strategy". Notes on this subject from the Department of Engineering at the University of Cambridge suggest that a binary matrix may be used "but may be found too crude", and nine point scales on both the importance and performance axes are recommended. An importance scale could be labelled from "the main thrust of competitiveness" to "never considered by customers and never likely to do so", and performance can be segmented into "better than", "the same as", and "worse than" the company's competitors. The highest urgency would than be directed to the most important areas where performance is poorer than competitors.


title: Strategic management

text: The technique is also used in relation to marketing, where the variable "importance" is related to buyers' perception of important attributes of a product: for attributes which might be considered important to buyers, both their perceived importance and their performance are assessed.


title: Strategic management

text: The concept of the corporation as a portfolio of business units, with each plotted graphically based on its market share (a measure of its competitive position relative to its peers) and industry growth rate (a measure of industry attractiveness), was summarized in the growth–share matrix developed by the Boston Consulting Group around 1970. By 1979, one study estimated that 45% of the Fortune 500 companies were using some variation of the matrix in their strategic planning. This framework helped companies decide where to invest their resources (i.e., in their high market share, high growth businesses) and which businesses to divest (i.e., low market share, low growth businesses.) The growth-share matrix was followed by G.E. multi factoral model, developed by General Electric.


title: Strategic management

text: Companies continued to diversify as conglomerates until the 1980s, when deregulation and a less restrictive antitrust environment led to the view that a portfolio of operating divisions in different industries was worth more as many independent companies, leading to the breakup of many conglomerates. While the popularity of portfolio theory has waxed and waned, the key dimensions considered (industry attractiveness and competitive position) remain central to strategy.


title: Strategic management

text: In response to the evident problems of "over diversification", C. K. Prahalad and Gary Hamel suggested that companies should build portfolios of businesses around shared technical or operating competencies, and should develop structures and processes to enhance their core competencies.


title: Strategic management

text: Michael Porter also addressed the issue of the appropriate level of diversification. In 1987, he argued that corporate strategy involves two questions: 1) What business should the corporation be in? and 2) How should the corporate office manage its business units? He mentioned four concepts of corporate strategy each of which suggest a certain type of portfolio and a certain role for the corporate office; the latter three can be used together:


title: Strategic management

text: Building on Porter's ideas, Michael Goold, Andrew Campbell and Marcus Alexander developed the concept of "parenting advantage" to be applied at the corporate level, as a parallel to the concept of "competitive advantage" applied at the business level. Parent companies, they argued, should aim to "add more value" to their portfolio of businesses than rivals. If they succeed, they have a parenting advantage. The right level of diversification depends, therefore, on the ability of the parent company to add value in comparison to others. Different parent companies with different skills should expect to have different portfolios. See Corporate Level Strategy 1995 and Strategy for the Corporate Level 2014


title: Strategic management

text: In 1980, Porter defined the two types of competitive advantage an organization can achieve relative to its rivals: lower cost or differentiation. This advantage derives from attribute(s) that allow an organization to outperform its competition, such as superior market position, skills, or resources. In Porter's view, strategic management should be concerned with building and sustaining competitive advantage.


title: Strategic management

text: Porter developed a framework for analyzing the profitability of industries and how those profits are divided among the participants in 1980. In five forces analysis he identified the forces that shape the industry structure or environment. The framework involves the bargaining power of buyers and suppliers, the threat of new entrants, the availability of substitute products, and the competitive rivalry of firms in the industry. These forces affect the organization's ability to raise its prices as well as the costs of inputs (such as raw materials) for its processes.


title: Strategic management

text: The five forces framework helps describe how a firm can use these forces to obtain a sustainable competitive advantage, either lower cost or differentiation. Companies can maximize their profitability by competing in industries with favorable structure. Competitors can take steps to grow the overall profitability of the industry, or to take profit away from other parts of the industry structure. Porter modified Chandler's dictum about structure following strategy by introducing a second level of structure: while organizational structure follows strategy, it in turn follows industry structure.


title: Strategic management

text: Porter wrote in 1980 that strategy target either cost leadership, differentiation, or focus. These are known as Porter's three generic strategies and can be applied to any size or form of business. Porter claimed that a company must only choose one of the three or risk that the business would waste precious resources. Porter's generic strategies detail the interaction between cost minimization strategies, product differentiation strategies, and market focus strategies.


title: Strategic management

text: Porter described an industry as having multiple "segments" that can be targeted by a firm. The breadth of its targeting refers to the "competitive scope" of the business. Porter defined two types of "competitive advantage": lower cost or differentiation relative to its rivals. Achieving competitive advantage results from a firm's ability to cope with the five forces better than its rivals. Porter wrote: "[A]chieving competitive advantage requires a firm to make a choice...about the type of competitive advantage it seeks to attain and the scope within which it will attain it." He also wrote: "The two basic types of competitive advantage [differentiation and lower cost] combined with the scope of activities for which a firm seeks to achieve them lead to three "generic strategies" for achieving above average performance in an industry: cost leadership, differentiation and focus. The focus strategy has two variants, cost focus and differentiation focus."


title: Strategic management

text: The concept of choice was a different perspective on strategy, as the 1970s paradigm was the pursuit of market share (size and scale) influenced by the experience curve. Companies that pursued the highest market share position to achieve cost advantages fit under Porter's cost leadership generic strategy, but the concept of choice regarding differentiation and focus represented a new perspective.


title: Strategic management

text: Porter's 1985 description of the value chain refers to the chain of activities (processes or collections of processes) that an organization performs in order to deliver a valuable product or service for the market. These include functions such as inbound logistics, operations, outbound logistics, marketing and sales, and service, supported by systems and technology infrastructure. By aligning the various activities in its value chain with the organization's strategy in a coherent way, a firm can achieve a competitive advantage. Porter also wrote that strategy is an internally consistent configuration of activities that differentiates a firm from its rivals. A robust competitive position cumulates from many activities which should fit coherently together.


title: Strategic management

text: Porter wrote in 1985: "Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can contribute to a firm's relative cost position and create a basis for differentiation...the value chain disaggregates a firm into its strategically relevant activities in order to understand the behavior of costs and the existing and potential sources of differentiation."


title: Strategic management

text: Interorganizational relationships allow independent organizations to get access to resources or to enter new markets. Interorganizational relationships represent a critical lever of competitive advantage.


title: Strategic management

text: The field of strategic management has paid much attention to the different forms of relationships between organizations ranging from strategic alliances to buyer-supplier relationships, joint ventures, networks, R&D consortia, licensing, and franchising.


title: Strategic management

text: On the one hand, scholars drawing on organizational economics (e.g., transaction costs theory) have argued that firms use interorganizational relationships when they are the most efficient form comparatively to other forms of organization such as operating on its own or using the market. On the other hand, scholars drawing on organizational theory (e.g., resource dependence theory) suggest that firms tend to partner with others when such relationships allow them to improve their status, power, reputation, or legitimacy.


title: Strategic management

text: A key component to the strategic management of inter-organizational relationships relates to the choice of governance mechanisms. While early research focused on the choice between equity and non equity forms, recent scholarship studies the nature of the contractual and relational arrangements between organizations.


title: Strategic management

text: Researchers have also noted, although to a lesser extent, the dark side of interorganizational relationships, such as conflict, disputes, opportunism and unethical behaviors. Relational or collaborative risk can be defined as the uncertainty about whether potentially significant and/or disappointing outcomes of collaborative activities will be realized. Companies can assess, monitor and manage collaborative risks. Empirical studies show that managers assess risks as lower when they external partners, higher if they are satisfied with their own performance, and lower when their business environment is turbulent.


title: Strategic management

text: Gary Hamel and C. K. Prahalad described the idea of core competency in 1990, the idea that each organization has some capability in which it excels and that the business should focus on opportunities in that area, letting others go or outsourcing them. Further, core competency is difficult to duplicate, as it involves the skills and coordination of people across a variety of functional areas or processes used to deliver value to customers. By outsourcing, companies expanded the concept of the value chain, with some elements within the entity and others without. Core competency is part of a branch of strategy called the "resource-based view" of the firm, which postulates that if activities are strategic as indicated by the value chain, then the organization's capabilities and ability to learn or adapt are also strategic.


title: Strategic management

text: Peter Drucker wrote in 1994 about the "Theory of the Business," which represents the key assumptions underlying a firm's strategy. These assumptions are in three categories: a) the external environment, including society, market, customer, and technology; b) the mission of the organization; and c) the core competencies needed to accomplish the mission. He continued that a valid theory of the business has four specifications: 1) assumptions about the environment, mission, and core competencies must fit reality; 2) the assumptions in all three areas have to fit one another; 3) the theory of the business must be known and understood throughout the organization; and 4) the theory of the business has to be tested constantly.


title: Strategic management

text: He wrote that organizations get into trouble when the assumptions representing the theory of the business no longer fit reality. He used an example of retail department stores, where their theory of the business assumed that people who could afford to shop in department stores would do so. However, many shoppers abandoned department stores in favor of specialty retailers (often located outside of malls) when time became the primary factor in the shopping destination rather than income.


title: Strategic management

text: Drucker described the theory of the business as a "hypothesis" and a "discipline." He advocated building in systematic diagnostics, monitoring and testing of the assumptions comprising the theory of the business to maintain competitiveness.


title: Strategic management

text: Strategic thinking involves the generation and application of unique business insights to opportunities intended to create competitive advantage for a firm or organization. It involves challenging the assumptions underlying the organization's strategy and value proposition. Mintzberg wrote in 1994 that it is more about synthesis (i.e., "connecting the dots") than analysis (i.e., "finding the dots"). It is about "capturing what the manager learns from all sources (both the soft insights from his or her personal experiences and the experiences of others throughout the organization and the hard data from market research and the like) and then synthesizing that learning into a vision of the direction that the business should pursue." Mintzberg argued that strategic thinking is the critical part of formulating strategy, more so than strategic planning exercises.


title: Strategic management

text: General Andre Beaufre wrote in 1963 that strategic thinking "is a mental process, at once abstract and rational, which must be capable of synthesizing both psychological and material data. The strategist must have a great capacity for both analysis and synthesis; analysis is necessary to assemble the data on which he makes his diagnosis, synthesis in order to produce from these data the diagnosis itself--and the diagnosis in fact amounts to a choice between alternative courses of action."


title: Strategic management

text: Will Mulcaster argued that while much research and creative thought has been devoted to generating alternative strategies, too little work has been done on what influences the quality of strategic decision making and the effectiveness with which strategies are implemented. For instance, in retrospect it can be seen that the financial crisis of 2008–9 could have been avoided if the banks had paid more attention to the risks associated with their investments, but how should banks change the way they make decisions to improve the quality of their decisions in the future? Mulcaster's Managing Forces framework addresses this issue by identifying 11 forces that should be incorporated into the processes of decision making and strategic implementation. The 11 forces are: Time; Opposing forces; Politics; Perception; Holistic effects; Adding value; Incentives; Learning capabilities; Opportunity cost; Risk and Style.


title: Strategic management

text: Classic strategy thinking, and vision have some limitations in a turbulent environment and uncertainty. The limitations relate to the heterogeneity and future-oriented goals and possession of cognitive capabilities in classic definition. Strategy should not be seen only from the top managerial hierarchy visions. The newer micro foundation framework suggests that people from different managerial levels are needed to work and interact dynamically to result in the knowledge strategy.


title: Strategic management

text: Strategic planning is a means of administering the formulation and implementation of strategy. Strategic planning is analytical in nature and refers to formalized procedures to produce the data and analyses used as inputs for strategic thinking, which synthesizes the data resulting in the strategy. Strategic planning may also refer to control mechanisms used to implement the strategy once it is determined. In other words, strategic planning happens "around" the strategy formation process.


title: Strategic management

text: Porter wrote in 1980 that formulation of competitive strategy includes consideration of four key elements:


title: Strategic management

text: The first two elements relate to factors internal to the company (i.e., the internal environment), while the latter two relate to factors external to the company (i.e., the external environment).


title: Strategic management

text: There are many analytical frameworks which attempt to organize the strategic planning process. Examples of frameworks that address the four elements described above include:


title: Strategic management

text: A number of strategists use scenario planning techniques to deal with change. The way Peter Schwartz put it in 1991 is that strategic outcomes cannot be known in advance so the sources of competitive advantage cannot be predetermined. The fast changing business environment is too uncertain for us to find sustainable value in formulas of excellence or competitive advantage. Instead, scenario planning is a technique in which multiple outcomes can be developed, their implications assessed, and their likeliness of occurrence evaluated. According to Pierre Wack, scenario planning is about insight, complexity, and subtlety, not about formal analysis and numbers. The flowchart to the right provides a process for classifying a phenomenon as a scenario in the intuitive logics tradition.


title: Strategic management

text: Some business planners are starting to use a complexity theory approach to strategy. Complexity can be thought of as chaos with a dash of order. Chaos theory deals with turbulent systems that rapidly become disordered. Complexity is not quite so unpredictable. It involves multiple agents interacting in such a way that a glimpse of structure may appear.


title: Strategic management

text: Once the strategy is determined, various goals and measures may be established to chart a course for the organization, measure performance and control implementation of the strategy. Tools such as the balanced scorecard and strategy maps help crystallize the strategy, by relating key measures of success and performance to the strategy. These tools measure financial, marketing, production, organizational development, and innovation measures to achieve a 'balanced' perspective. Advances in information technology and data availability enable the gathering of more information about performance, allowing managers to take a much more analytical view of their business than before.


title: Strategic management

text: Strategy may also be organized as a series of "initiatives" or "programs", each of which comprises one or more projects. Various monitoring and feedback mechanisms may also be established, such as regular meetings between divisional and corporate management to control implementation.


title: Strategic management

text: A key component to strategic management which is often overlooked when planning is evaluation. There are many ways to evaluate whether or not strategic priorities and plans have been achieved, one such method is Robert Stake's Responsive Evaluation. Responsive evaluation provides a naturalistic and humanistic approach to program evaluation. In expanding beyond the goal-oriented or pre-ordinate evaluation design, responsive evaluation takes into consideration the program's background (history), conditions, and transactions among stakeholders. It is largely emergent, the design unfolds as contact is made with stakeholders.


title: Strategic management

text: While strategies are established to set direction, focus effort, define or clarify the organization, and provide consistency or guidance in response to the environment, these very elements also mean that certain signals are excluded from consideration or de-emphasized. Mintzberg wrote in 1987: "Strategy is a categorizing scheme by which incoming stimuli can be ordered and dispatched." Since a strategy orients the organization in a particular manner or direction, that direction may not effectively match the environment, initially (if a bad strategy) or over time as circumstances change. As such, Mintzberg continued, "Strategy [once established] is a force that resists change, not encourages it."


title: Strategic management

text: Therefore, a critique of strategic management is that it can overly constrain managerial discretion in a dynamic environment. "How can individuals, organizations and societies cope as well as possible with ... issues too complex to be fully understood, given the fact that actions initiated on the basis of inadequate understanding may lead to significant regret?" Some theorists insist on an iterative approach, considering in turn objectives, implementation and resources. I.e., a "...repetitive learning cycle [rather than] a linear progression towards a clearly defined final destination." Strategies must be able to adjust during implementation because "humans rarely can proceed satisfactorily except by learning from experience; and modest probes, serially modified on the basis of feedback, usually are the best method for such learning."


title: Strategic management

text: In 2000, Gary Hamel coined the term strategic convergence to explain the limited scope of the strategies being used by rivals in greatly differing circumstances. He lamented that successful strategies are imitated by firms that do not understand that for a strategy to work, it must account for the specifics of each situation.


title: Strategic management

text: Woodhouse and Collingridge claim that the essence of being "strategic" lies in a capacity for "intelligent trial-and error" rather than strict adherence to finely honed strategic plans. Strategy should be seen as laying out the general path rather than precise steps. Means are as likely to determine ends as ends are to determine means. The objectives that an organization might wish to pursue are limited by the range of feasible approaches to implementation. (There will usually be only a small number of approaches that will not only be technically and administratively possible, but also satisfactory to the full range of organizational stakeholders.) In turn, the range of feasible implementation approaches is determined by the availability of resources.


title: Strategic management

text: Various strategic approaches used across industries (themes) have arisen over the years. These include the shift from product-driven demand to customer- or marketing-driven demand (described above), the increased use of self-service approaches to lower cost, changes in the value chain or corporate structure due to globalization (e.g., off-shoring of production and assembly), and the internet.


title: Strategic management

text: One theme in strategic competition has been the trend towards self-service, often enabled by technology, where the customer takes on a role previously performed by a worker to lower costs for the firm and perhaps prices. Examples include:


title: Strategic management

text: One definition of globalization refers to the integration of economies due to technology and supply chain process innovation. Companies are no longer required to be vertically integrated (i.e., designing, producing, assembling, and selling their products). In other words, the value chain for a company's product may no longer be entirely within one firm; several entities comprising a virtual firm may exist to fulfill the customer requirement. For example, some companies have chosen to outsource production to third parties, retaining only design and sales functions inside their organization.


title: Strategic management

text: The internet has dramatically empowered consumers and enabled buyers and sellers to come together with drastically reduced transaction and intermediary costs, creating much more robust marketplaces for the purchase and sale of goods and services. The Internet has enabled many Internet-based entrepreneurs to tap serendipity as a strategic advantage and thrive. Examples include online auction sites, internet dating services, and internet book sellers. In many industries, the internet has dramatically altered the competitive landscape. Services that used to be provided within one entity (e.g., a car dealership providing financing and pricing information) are now provided by third parties. Further, compared to traditional media like television, the internet has caused a major shift in viewing habits through on demand content which has led to an increasingly fragmented audience.


title: Strategic management

text: Author Phillip Evans said in 2013 that networks are challenging traditional hierarchies. Value chains may also be breaking up ("deconstructing") where information aspects can be separated from functional activity. Data that is readily available for free or very low cost makes it harder for information-based, vertically integrated businesses to remain intact. Evans said: "The basic story here is that what used to be vertically integrated, oligopolistic competition among essentially similar kinds of competitors is evolving, by one means or another, from a vertical structure to a horizontal one. Why is that happening? It's happening because transaction costs are plummeting and because scale is polarizing. The plummeting of transaction costs weakens the glue that holds value chains together, and allows them to separate." He used Wikipedia as an example of a network that has challenged the traditional encyclopedia business model. Evans predicts the emergence of a new form of industrial organization called a "stack", analogous to a technology stack, in which competitors rely on a common platform of inputs (services or information), essentially layering the remaining competing parts of their value chains on top of this common platform.


title: Strategic management

text: In the recent decade, sustainability—or ability to successfully sustain a company in a context of rapidly changing environmental, social, health, and economic circumstances—has emerged as crucial aspect of any strategy development. Research focusing on sustainability in commercial strategies has led to emergence of the concept of "embedded sustainability" – defined by its authors Chris Laszlo and Nadya Zhexembayeva as "incorporation of environmental, health, and social value into the core business with no trade-off in price or quality—in other words, with no social or green premium." Their research showed that embedded sustainability offers at least seven distinct opportunities for business value and competitive advantage creation: a) better risk management, b) increased efficiency through reduced waste and resource use, c) better product differentiation, d) new market entrances, e) enhanced brand and reputation, f) greater opportunity to influence industry standards, and g) greater opportunity for radical innovation. Research further suggested that innovation driven by resource depletion can result in fundamental competitive advantages for a company's products and services, as well as the company strategy as a whole, when right principles of innovation are applied. Asset managers who committed to integrating embedded sustainability factors in their capital allocation decisions created a stronger return on investment than managers that did not strategically integrate sustainability into their similar business model.


title: Strategic management

text: In 1990, Peter Senge, who had collaborated with Arie de Geus at Dutch Shell, popularized de Geus' notion of the "learning organization". The theory is that gathering and analyzing information is a necessary requirement for business success in the information age. To do this, Senge claimed that an organization would need to be structured such that:


title: Strategic management

text: Geoffrey Moore (1991) and R. Frank and P. Cook also detected a shift in the nature of competition. Markets driven by technical standards or by "network effects" can give the dominant firm a near-monopoly. The same is true of networked industries in which interoperability requires compatibility between users. Examples include Internet Explorer's and Amazon's early dominance of their respective industries. IE's later decline shows that such dominance may be only temporary.


title: Strategic management

text: Moore showed how firms could attain this enviable position by using E.M. Rogers' five stage adoption process and focusing on one group of customers at a time, using each group as a base for reaching the next group. The most difficult step is making the transition between introduction and mass acceptance. (See Crossing the Chasm). If successful a firm can create a bandwagon effect in which the momentum builds and its product becomes a "de facto" standard.


title: Strategic management

text: Bolisani & Bratianu (2017) have defined knowledge strategy as an integration of rational thinking and dynamic learning. Rational planning contains a three-step process where the first step is to collect information, the second step is to analyze the information and the third step is to formulate goals and plans based on information. Emergent planning also contains three steps to the opposite direction starting from practical experience, what is analyzed in the second step, and then formulated to a strategy in the third step. These two approaches are combined to the “integrated view” with the Bolisani and Bratianu research implications. To start the planning process for knowledge and KM strategy creation, company can prepare a preliminary plan with the basis of rational analysis from internal or external environments. While creating rational and predictive plans, company can similarly utilize practical adapted knowledge for example learning from the ground. The idea behind the integrated view is to combine the general visions of knowledge strategy with both the current practical understanding and future ideas. This model will move the decision-making process in a more interactive and co-creative direction.


title: Strategic management

text: In 1969, Peter Drucker coined the phrase "Age of Discontinuity" to describe the way change disrupts lives. In an age of continuity attempts to predict the future by extrapolating from the past can be accurate. But according to Drucker, we are now in an age of discontinuity and extrapolating is ineffective. He identifies four sources of discontinuity: new technologies, globalization, cultural pluralism and knowledge capital.


title: Strategic management

text: In 1970, Alvin Toffler in "Future Shock" described a trend towards accelerating rates of change. He illustrated how social and technical phenomena had shorter lifespans with each generation, and he questioned society's ability to cope with the resulting turmoil and accompanying anxiety. In past eras periods of change were always punctuated with times of stability. This allowed society to assimilate the change before the next change arrived. But these periods of stability had all but disappeared by the late 20th century. In 1980 in "The Third Wave", Toffler characterized this shift to relentless change as the defining feature of the third phase of civilization (the first two phases being the agricultural and industrial waves).


title: Strategic management

text: In 1978, Derek F. Abell (Abell, D. 1978) described "strategic windows" and stressed the importance of the timing (both entrance and exit) of any given strategy. This led some strategic planners to build planned obsolescence into their strategies.


title: Strategic management

text: In 1983, Noel Tichy wrote that because we are all beings of habit we tend to repeat what we are comfortable with. He wrote that this is a trap that constrains our creativity, prevents us from exploring new ideas, and hampers our dealing with the full complexity of new issues. He developed a systematic method of dealing with change that involved looking at any new issue from three angles: technical and production, political and resource allocation, and corporate culture.


title: Strategic management

text: In 1989, Charles Handy identified two types of change. "Strategic drift" is a gradual change that occurs so subtly that it is not noticed until it is too late. By contrast, "transformational change" is sudden and radical. It is typically caused by discontinuities (or exogenous shocks) in the business environment. The point where a new trend is initiated is called a "strategic inflection point" by Andy Grove. Inflection points can be subtle or radical.


title: Strategic management

text: In 1990, Richard Pascale wrote that relentless change requires that businesses continuously reinvent themselves. His famous maxim is "Nothing fails like success" by which he means that what was a strength yesterday becomes the root of weakness today, We tend to depend on what worked yesterday and refuse to let go of what worked so well for us in the past. Prevailing strategies become self-confirming. To avoid this trap, businesses must stimulate a spirit of inquiry and healthy debate. They must encourage a creative process of self-renewal based on constructive conflict.


title: Strategic management

text: In 1996, Adrian Slywotzky showed how changes in the business environment are reflected in value migrations between industries, between companies, and within companies. He claimed that recognizing the patterns behind these value migrations is necessary if we wish to understand the world of chaotic change. In "Profit Patterns" (1999) he described businesses as being in a state of strategic anticipation as they try to spot emerging patterns. Slywotsky and his team identified 30 patterns that have transformed industry after industry.


title: Strategic management

text: In 1997, Clayton Christensen (1997) took the position that great companies can fail precisely because they do everything right since the capabilities of the organization also define its disabilities. Christensen's thesis is that outstanding companies lose their market leadership when confronted with disruptive technology. He called the approach to discovering the emerging markets for disruptive technologies agnostic marketing, i.e., marketing under the implicit assumption that no one – not the company, not the customers – can know how or in what quantities a disruptive product can or will be used without the experience of using it.


title: Strategic management

text: In 1999, Constantinos Markides reexamined the nature of strategic planning. He described strategy formation and implementation as an ongoing, never-ending, integrated process requiring continuous reassessment and reformation. Strategic management is planned and emergent, dynamic and interactive.


title: Strategic management

text: J. Moncrieff (1999) stressed strategy dynamics. He claimed that strategy is partially deliberate and partially unplanned. The unplanned element comes from emergent strategies that result from the emergence of opportunities and threats in the environment and from "strategies in action" (ad hoc actions across the organization).


title: Strategic management

text: David Teece pioneered research on resource-based strategic management and the dynamic capabilities perspective, defined as "the ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments". His 1997 paper (with Gary Pisano and Amy Shuen) "Dynamic Capabilities and Strategic Management" was the most cited paper in economics and business for the period from 1995 to 2005.


title: Strategic management

text: In 2000, Gary Hamel discussed strategic decay, the notion that the value of every strategy, no matter how brilliant, decays over time.


title: Strategic management

text: A large group of theorists felt the area where western business was most lacking was product quality. W. Edwards Deming, Joseph M. Juran, A. Kearney, Philip Crosby and Armand Feignbaum suggested quality improvement techniques such total quality management (TQM), continuous improvement (kaizen), lean manufacturing, Six Sigma, and return on quality (ROQ).


title: Strategic management

text: Contrarily, James Heskett (1988), Earl Sasser (1995), William Davidow, Len Schlesinger, A. Paraurgman (1988), Len Berry, Jane Kingman-Brundage, Christopher Hart, and Christopher Lovelock (1994), felt that poor customer service was the problem. They gave us fishbone diagramming, service charting, Total Customer Service (TCS), the service profit chain, service gaps analysis, the service encounter, strategic service vision, service mapping, and service teams. Their underlying assumption was that there is no better source of competitive advantage than a continuous stream of delighted customers.


title: Strategic management

text: Process management uses some of the techniques from product quality management and some of the techniques from customer service management. It looks at an activity as a sequential process. The objective is to find inefficiencies and make the process more effective. Although the procedures have a long history, dating back to Taylorism, the scope of their applicability has been greatly widened, leaving no aspect of the firm free from potential process improvements. Because of the broad applicability of process management techniques, they can be used as a basis for competitive advantage.


title: Strategic management

text: Carl Sewell, Frederick F. Reichheld, C. Gronroos, and Earl Sasser observed that businesses were spending more on customer acquisition than on retention. They showed how a competitive advantage could be found in ensuring that customers returned again and again. Reicheld broadened the concept to include loyalty from employees, suppliers, distributors and shareholders. They developed techniques for estimating customer lifetime value (CLV) for assessing long-term relationships. The concepts begat attempts to recast selling and marketing into a long term endeavor that created a sustained relationship (called relationship selling, relationship marketing, and customer relationship management). Customer relationship management (CRM) software became integral to many firms.


title: Strategic management

text: Michael Hammer and James Champy felt that these resources needed to be restructured. In a process that they labeled reengineering, firm's reorganized their assets around whole processes rather than tasks. In this way a team of people saw a project through, from inception to completion. This avoided functional silos where isolated departments seldom talked to each other. It also eliminated waste due to functional overlap and interdepartmental communications.


title: Strategic management

text: In 1989 Richard Lester and the researchers at the MIT Industrial Performance Center identified seven best practices and concluded that firms must accelerate the shift away from the mass production of low cost standardized products. The seven areas of best practice were:


title: Strategic management

text: The search for best practices is also called benchmarking. This involves determining where you need to improve, finding an organization that is exceptional in this area, then studying the company and applying its best practices in your firm.


title: Strategic management

text: Professor Richard P. Rumelt described strategy as a type of problem solving in 2011. He wrote that good strategy has an underlying structure called a "kernel". The kernel has three parts: 1) A "diagnosis" that defines or explains the nature of the challenge; 2) A "guiding policy" for dealing with the challenge; and 3) Coherent "actions" designed to carry out the guiding policy.


title: Strategic management

text: President Kennedy outlined these three elements of strategy in his Cuban Missile Crisis Address to the Nation of 22 October 1962:


title: Strategic management

text: Active strategic management required active information gathering and active problem solving. In the early days of Hewlett-Packard (HP), Dave Packard and Bill Hewlett devised an active management style that they called "management by walking around" (MBWA). Senior HP managers were seldom at their desks. They spent most of their days visiting employees, customers, and suppliers. This direct contact with key people provided them with a solid grounding from which viable strategies could be crafted. Management consultants Tom Peters and Robert H. Waterman had used the term in their 1982 book "". Some Japanese managers employ a similar system, which originated at Honda, and is sometimes called the 3 G's (Genba, Genbutsu, and Genjitsu, which translate into "actual place", "actual thing", and "actual situation").


title: Strategic management

text: In 2010, IBM released a study summarizing three conclusions of 1500 CEOs around the world: 1) complexity is escalating, 2) enterprises are not equipped to cope with this complexity, and 3) creativity is now the single most important leadership competency. IBM said that it is needed in all aspects of leadership, including strategic thinking and planning.


title: Strategic management

text: Similarly, McKeown argued that over-reliance on any particular approach to strategy is dangerous and that multiple methods can be used to combine the creativity and analytics to create an "approach to shaping the future", that is difficult to copy.


title: Strategic management

text: A 1938 treatise by Chester Barnard, based on his own experience as a business executive, described the process as informal, intuitive, non-routinized and involving primarily oral, 2-way communications. Bernard says "The process is the sensing of the organization as a whole and the total situation relevant to it. It transcends the capacity of merely intellectual methods, and the techniques of discriminating the factors of the situation. The terms pertinent to it are "feeling", "judgement", "sense", "proportion", "balance", "appropriateness". It is a matter of art rather than science."


title: Strategic management

text: In 1973, Mintzberg found that senior managers typically deal with unpredictable situations so they strategize in "ad hoc", flexible, dynamic, and implicit ways. He wrote, "The job breeds adaptive information-manipulators who prefer the live concrete situation. The manager works in an environment of stimulus-response, and he develops in his work a clear preference for live action."


title: Strategic management

text: In 1982, John Kotter studied the daily activities of 15 executives and concluded that they spent most of their time developing and working a network of relationships that provided general insights and specific details for strategic decisions. They tended to use "mental road maps" rather than systematic planning techniques.


title: Strategic management

text: Daniel Isenberg's 1984 study of senior managers found that their decisions were highly intuitive. Executives often sensed what they were going to do before they could explain why. He claimed in 1986 that one of the reasons for this is the complexity of strategic decisions and the resultant information uncertainty.


title: Strategic management

text: Zuboff claimed that information technology was widening the divide between senior managers (who typically make strategic decisions) and operational level managers (who typically make routine decisions). She alleged that prior to the widespread use of computer systems, managers, even at the most senior level, engaged in both strategic decisions and routine administration, but as computers facilitated (She called it "deskilled") routine processes, these activities were moved further down the hierarchy, leaving senior management free for strategic decision making.


title: Strategic management

text: In 1977, Abraham Zaleznik distinguished leaders from managers. He described leaders as visionaries who inspire, while managers care about process. He claimed that the rise of managers was the main cause of the decline of American business in the 1970s and 1980s. Lack of leadership is most damaging at the level of strategic management where it can paralyze an entire organization.


title: Strategic management

text: According to Corner, Kinichi, and Keats, strategic decision making in organizations occurs at two levels: individual and aggregate. They developed a model of parallel strategic decision making. The model identifies two parallel processes that involve getting attention, encoding information, storage and retrieval of information, strategic choice, strategic outcome and feedback. The individual and organizational processes interact at each stage. For instance, competition-oriented objectives are based on the knowledge of competing firms, such as their market share.


title: Strategic management

text: The 1980s also saw the widespread acceptance of positioning theory. Although the theory originated with Jack Trout in 1969, it didn't gain wide acceptance until Al Ries and Jack Trout wrote their classic book "Positioning: The Battle For Your Mind" (1979). The basic premise is that a strategy should not be judged by internal company factors but by the way customers see it relative to the competition. Crafting and implementing a strategy involves creating a position in the mind of the collective consumer. Several techniques enabled the practical use of positioning theory. Perceptual mapping for example, creates visual displays of the relationships between positions. Multidimensional scaling, discriminant analysis, factor analysis and conjoint analysis are mathematical techniques used to determine the most relevant characteristics (called dimensions or factors) upon which positions should be based. Preference regression can be used to determine vectors of ideal positions and cluster analysis can identify clusters of positions.


title: Strategic management

text: In 1992 Jay Barney saw strategy as assembling the optimum mix of resources, including human, technology and suppliers, and then configuring them in unique and sustainable ways.


title: Strategic management

text: James Gilmore and Joseph Pine found competitive advantage in mass customization. Flexible manufacturing techniques allowed businesses to individualize products for each customer without losing economies of scale. This effectively turned the product into a service. They also realized that if a service is mass-customized by creating a "performance" for each individual client, that service would be transformed into an "experience". Their book, "The Experience Economy", along with the work of Bernd Schmitt convinced many to see service provision as a form of theatre. This school of thought is sometimes referred to as customer experience management (CEM).


title: Strategic management

text: Many industries with a high information component are being transformed. For example, Encarta demolished Encyclopædia Britannica (whose sales have plummeted 80% since their peak of $650 million in 1990) before it was in turn, eclipsed by collaborative encyclopedias like Wikipedia. The music industry was similarly disrupted. The technology sector has provided some strategies directly. For example, from the software development industry agile software development provides a model for shared development processes.


title: Strategic management

text: Peter Drucker conceived of the "knowledge worker" in the 1950s. He described how fewer workers would do physical labor, and more would apply their minds. In 1984, John Naisbitt theorized that the future would be driven largely by information: companies that managed information well could obtain an advantage, however the profitability of what he called "information float" (information that the company had and others desired) would disappear as inexpensive computers made information more accessible.