Introduction
GM
Motors is one of the brightest faces of US technology and development. In
Automobile industries the company is a legend and known for its technologically
advanced wide range of brands which ranges from light to truck vehicles. The
company is doing business from more than a hundred years and since then they
have developed and acclaimed a series of brands which have satisfied the
customer needs and safety.
Following
is a very brief detail of company’s SWOT Analysis, Porter’s Five Force Analysis
and PESTEL Analysis along with a few recommendations for the company’s future
strategies.
SWOT Analysis
Strengths
·
Globally acclaimed existence
·
Wide range of brands
·
Mounting business in Asia Pacific and
Latin America
·
Quality and safety
·
Research and development
|
Weaknesses
·
Shrinking market share
·
Decline in finances
·
Product rejections
|
Opportunities
·
Hybrids
·
Growing markets
·
New brands
|
Threats
·
Competitors’ philosophy
·
Global recession and market downfall
·
Decline in demand
|
Strengths
General
Motors is a well established and globally acclaimed name. The company has
successfully completed a hundred years and it is on its foot since 1897 with an
established wide range of brands all over the world. After a huge success in
US, the company is flourishing its business in other corners and spreading its
wings to Asia Pacific and Latin America. GM Motors philosophy of business and
thrive for technological advancements and quality is their key to success. The
company strongly believe in their customers’ safety and comfort and always
develop new models which can satisfy the customer and assure their safety. For
the same very reason of customer safety, the company has applied the
technological advancements and striving to provide crash avoidance by adopting
OnStar satellite technology which can forecast and notify a possible chance of
crash.
Weaknesses
Japanese
automobile industry has pulled a great impact on automobile industry all over
the world especially to GM Motors, Ford and Chrysler’s market share which has
resulted GM Motors in declining share and finances because of poor choice of
investments and a couple of delayed actions in operations such as in Hybrid
technology which almost led them to become a follower and reduced their market
share in particular regions and also resulted as product rejections and
recalls. In just 3 years 2007-2009 the company had a fall of 2.1% (GM Motors
Annual Report, 2007-2009).
Opportunities
As
per their agenda of innovation and technology, GM Motors should cash the hybrid
technology in new emerging markets like Latin America and Asia Pacific as well
as in US.
Threats
Competitors’
philosophy as compare to GM Motors stood stronger in the area of technology and
they successfully evolved the idea of hybrid technology and took GM Motors a
step back. Being a follower than a leader impacted brutally to the company in
current global recession and has been a fierce blow on company’s profits.
Porter’s Five Forces
Analysis
External
environment of GM Motors as per Porter’s Five Forces Analysis is as follows.
Threat of New Entry
As
per the economical slump, research and development cost, inflation with the
respect to the automobile development structure, it is nearly impossible for the
new entry to jump into business.
Buyer Power
As
per the economical crises the dealerships and low rate products are more in and
there is a little buying power in the market as compare to the past.
Supplier Power
Suppliers’
power has grown strong over the past few years and, as per the emerging markets
which are inclined to the new ideas, it will stay strong in future.
Threat of Substitutes
Threat
of substitutes is at its peak as per the economical depression, lack of new
entries and a little buying power. GM motor’s falling share over the past few
years also endorses the idea (GM Motors Annual Report, 2009)
Threat of Competitors
As
per the market structure of business there are a few competitors such as Ford,
Toyota, Chrysler, Nissan which are striking serious blows on GM Motor’s market
share.
PESTEL Analysis
Political Factors
Environmental
concerns of the government and the customers have inflicted dominance over
company’s business progression and have resulted to make certain changes in
operations since 1960. (United States Environmental Protection Agency, 1960)
Economic Factors
Automobile
industry has its vital role of US economical growth. According to a number of
studies the industry has contributed a huge amount of economical development
over past many years.
Social Factors
Automobile industry
of US has always produced a vehicle which became a sign of reliance and esteem
and buyers always enjoyed the pride to drive in utmost safety and esteem. The
industry knows its perks and challenges and always stands on up to the mark.
Technological Factors
Technological
advancements such as internet and social connections over web have increased.
As per the study conducted by the J.D. Power and Associates in 2002 indicates
that almost 60% of buyers refers to the internet to generate and finalize their
car.
Environmental Factors
The
automobile industry has faced a couple of challenges over the past few years on
the account of environment protection as mentioned earlier according to the
United States Environmental Protection Agency, 1960.
Legal Factors
Most
recent challenge in terms of legal factors and regulation is the ELV endorsement
for automobile industry by the Automobile Recycling Law, July 2002 in
accordance to which Japanese are now concerned and very aggressive on its
compliance which is effective from 2005.
Recommendations
1. GM motors
should strive harder to develop and lead new technology as per their company
agenda.
2. The company has to take bold steps to conquer
new markets.
3. When it comes to competition the company
should work hard on remodelling by keeping the idea in mind of new emerging
markets.
4. The company
should take a more professional look on their portfolio and should drop the
investments which are outdated.
References:
GM Motors Strategy Report, 2009
United States Environmental Protection
Agency, 1960
J.D. Power and Associates Report, 2002
GM Motors Annual Report, 2009
