José Ignacio Lopez de Arriortua CaseGeneral Motors has been one of the most important automobile manufacturers in the world since 1931. After the economic recession of the 1980s, the main focus of automobile manufacturers was cost reduction. Customers have become more price sensitive. Japanese competitors also entered the market with a new, efficient production system. The market was therefore very competitive and oriented towards price reduction. The case says that in 1991, GM suffered losses of $4.5 billion and that most of the manufacturing costs were due to purchased components. GM NA hired Lopez in order to find a way out of an “extraordinary” situation and reduce costs.Answers to the case questions:1. Andrew Cox states in his article that the ideal situation for buyers is logically to force all their suppliers into the buyer dominance box (from his “Power Matrix” – page 13 of the article). Should a buyer ultimately strive to maintain dominance over its supply base, as Cox suggests? Is it possible to maintain a dominant position of power for the buyer while simultaneously building a collaborative alliance with a supplier? Dominant power is very tempting to the buyer because it allows some sort of quality control and specifically lowers prices. But, from my point of view, supply chain management is all about cooperation in order to succeed in each stage of the channel and, through this, improve quality and reduce costs throughout. of the supply chain so that everyone is satisfied. The key here is undoubtedly to establish long-term trusting and supportive relationships in which all members cooperate rather than dominate. To me it seems that the interdependency box is better for this type of relationships, where the buyer and supplier are...... middle of paper ...... I assume you are the successor by José Lopez at GM. What problems would you face? What actions would you take in your new position and why? If I were José Lopez's successor at GM, I would fight against the inefficiency of internal suppliers, gradually revise contracts with external suppliers in order to establish long-term relationships beneficial to both parties. I would try to move the business as a buyer closer to the Power Matrix domination box of interdependence. Since Lopez has already gained some power by crafting this new policy, I would try to tone it down, so that providers can feel some relief and be more satisfied. What I would definitely start doing is to develop a long-term cooperation strategy and continue to use the keiretsu practices, but present them in a better way, by studying how my suppliers operate and how from which we can obtain mutual benefit..