Swot analysis for General Moters.

by riddick_46 (student)

University Degree Business and Administrative studies

Akhundov

Riad Akhundov

Professor Hamilton

Management Practices

1 November 2012

GM SWOT Analysis

General Motors Corporation is one of the largest auto manufacturers and marketers in the world. In 2011 it became the world’s largest auto manufacturer, by vehicle unit sales. General Motors Corporation includes variety of different famous brands such as Chevrolet, GMC, Cadillac, Saturn, Buick, Pontiac. It’s also famous in the world for its international brands such as Opel and Vauxhall. The company is very famous and is operating in more than 150 countries in the world. General Motors Corporation employs more than 200,000 employees. Company produces different kinds of vehicles in more than 30 countries and manages its sales and services through four regional segments which include North American GMNA, South American GMSA, GM Europe and GM International Operations. The fifth segment is GM Financial through which it manages all the marketing, production and development processes. By October 2012 General Motors reported that it was profitable in all markets except European one where it continues to lose money due to economic crisis and other factors that trouble American company. By December 31 General Motors Corporation reported its total worldwide sales of nine million vehicles.

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General Motors Corporation’s historic start can be traced back to 1892 when the Oldsmobile was founded by R.E. Olds in Detroit who wanted to produce luxury horseless carriages. The first luxury models were not successful. However, company had success in sales when it introduced cheaper versions of the vehicles. Several different car manufacturers also were established in Detroit. Among them were such popular brands as Cadillac, Buick and Oakland, also known later on as a Pontiac. Excess of the auto manufacturing companies made it difficult for some smaller companies to exist in the market as most of them were producing identical products. William Durant, the director of the Buick Company, decided that they’ll be better off if his company would merge with other vehicle manufacturing companies. By 1903 the significant merger was completed by two companies Buick and Oldsmobile. Cadillac and Pontiac also were joined in by 1909. This mergers helped the company to increase its profits and become one of the largest players in the auto market. General Motors Corporation remained the largest car manufacturer during the period between 1931 and 2008. GM declared bankruptcy in July of 2009. All GM’s assets were sold to a newly formed government company and it was also renamed to General Motors Company. New company was much smaller but it proved that it could still be profitable. In 2009 General Motors Company shut several of its car manufacturing brands such as Saturn, Hummer and Pontiac. In 2010, one of the largest initial public offerings in the world was offered by General Motors Company. Soon, after these events, company reported its profitability by 2011.

The General Motors Company’s SWOT analysis is going to show company’s strengths and weaknesses while also will let us understand its opportunities and threats in the market. One of the strengths of the company is definitely its brand name and popularity. General Motors is a world famous company operating in more than 150 countries. Many General Motors brands such as Chevrolet, Cadillac and Buick became worldwide recognized brands and are popular across the planet. One of the other strengths of the company is its worldwide presence. GM operates in countries all over the world having its manufacturing and distributing chains on different continents. These countries include Egypt and South Africa of Africa; Germany, Belgium and Poland of Europe; China, Thailand and South Korea of Asia; Brazil, Columbia and Ecuador of South America. General Motors Company recently invested about 250 million dollars in their facility in Shanghai to encourage producing vehicles with hybrid and alternative fuel engines. At the moment General Motors Company suffers many weaknesses due to its bankruptcy in 2009. The image of the corporation was severely damaged and many dealerships in several countries were forced to a closure. At the same time, most of the technologies of the company are mostly outdated and its poor financial position makes the situation worse for a company. One of the major costs of the company, pension funds are also considered as one of the major weaknesses of the company. There are many opportunities for the company to get back on track in the market. Among these opportunities are Asian markets, particularly India and China where demand for new cars is gradually increasing. The company tries to introduce new small models of the cars with hybrid and alternative fuel engines. It is expected that demand for these kinds of cars is going to increase in new future. Currently, GM does a good job by introducing small high mileage cars in the market establishing new sales records on the market. There are still many obstacles and threats for GM in the market. Continuing global recession of 2008-2010 was one of the major problems for GM. Now, when the market in its recovery stage, it is still hard for auto manufacturing companies to fully recover from all the downturns in the past. Decrease in consumer wealth also one of the factors that create obstacles in increasing yearly sales. Major players in the market, such as Toyota, offer big discounts to the customers, thus attracting the lion’s share of the market to buy their products. Customers prefer fuel efficient new small Japanese cars which are very reliable and affordable as well. Also, high labor costs play a big role as a threat to GM in the market.

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