Strategic Evaluation and SWOT Analysis of General Motors

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Strategic Evaluation and SWOT Analysis of General Motors

Introduction

1.1 Introduction to Report

The following report is a strategic analysis of the American Company named called General Motor Company. This report contains the strategic analysis company’s profit and risk factors determining internal and external factors. This report is a research of the company’s overall information and the strategy to overcome their challenges and sustain in the market. There are three parts in this report, in the first part, it contains Introduction to strategy, Introduction to General Motors and a variety of Information about the company. In the second part of the report, it contains the analysis of General Motors through strategic position, strategic choices, strategic action macro-environmental factors, Porters Five forces analysis and Strategic Capabilities. In the last part, it contains SWOT analysis of the Company.

1.2 Introduction to strategic management

Strategic management is the study of a business and its environment. Alfred Chandler graduated from Harvard Business School defined strategy as the logical flow of the company which influence by the company’s goals and objectives. Chandler emphasizes that most of the companies try to make their business strategy by focusing on their goals and objectives. He also mentioned that many companies implement their business plans and strategic direction heavily referred through their set of company’s goals and objectives. Michael Porter was also graduated from Harvard, Porter focuses on deliberate choices, difference, and competition (Johnson et al. 2011).

The long-term direction of an organization depends upon the market and consumer the company serves along with delivering unique and extra services than of competitors. Mission, Vision, Objectives, Advantage and Scope are the marketing strategy statement which helps in leading companies towards the height of success. The mission statement helps in achieving the short terms goal for an organization. The vision statement tells what a company wants to achieve in long term similarly, the objectives tells the purpose of company’s establishment and wants to achievement in company period. Likewise, the scope determines the future of established company in the market and the advantage illustrates the differentiation in providing products and services to customers than of competitors. For this reason every companies needs to analyze their Competitors, Strength, Weakness, Opportunities and threats (Johnson et al. 2011).

The Corporate level strategy plays a huge role in making very important decisions like expanding their business into various geographic areas along with providing diverse goods and services in the market. Business level strategy is about competing within the same business level in terms of providing unique products and services than competitors. Operational level strategy determines utilizing the resources within the organization resources to meet the success for the business level and corporate level strategy (Johnson et al. 2011).

The exploring strategy model helps in understanding the organization into major 3 segments. Strategic position of an organization is concerned with the environment, capability, purpose and culture of an individual organization. Usually in Strategic position strength, weakness, purpose and environment opportunities and threats of an organization are concerned and to identify the impact PESTEL analysis is conducted (Johnson et al. 2011).

A strategic choice provides the option for strategy in terms of direction, where the company wants to move in the future and the method, by which strategy might be followed. Under strategic choices basic things like how business unit have to compete? Whom to include in a portfolio? Where the organization should compete internationally is concerned (Johnson et al. 2011).

Strategy in action is about implementing the strategy that has been formed. The fundamental questions that are usually asked in strategy in action are which strategy are suitable, acceptable, and feasible? How the organization should manage the necessary changes? Who should do what in different stages? Organized strategy must be in structure and systematic and both the top level managers and lower level employee must follow up the strategic plan, and it must be communicate within the organization (Johnson et al. 2011).

1.3 Introduction to company

General Motors Company is American automobile manufacturing Multinational Corporation that designs, manufactures, markets, and distributes vehicles and vehicle parts, and sells financial services Headquartered in Detroit, Michigan established on September 16, 1908 (General Motors 2019). General Motors Company was formed with an escrow account set up by R S McLaughlin for 15 years of Buick Motors in 1907 on September 16, 1908, in Flint, Michigan, as a holding company controlled by William C. Durant, owner of Buick. At the beginning of the 20th century, there were fewer than 8,000 automobiles in the US, and Durant had become a leading manufacturer of horse-drawn vehicles in Flint helped by his purchase of the Carriage Gear patent from the McLaughlin family in Canada (General Motors 2019). Mary Barra is Chairman and Chief Executive Officer of General Motors Company. General Motors made a sale of $147049.0M where Over 180,000 people are employed and Serving 6 continents (General Motors 2019).

GM is centered on strengthening core commercial enterprise of exceptional car, vans and crossovers, while also working to lead the transformation of non-public mobility through advanced technologies like connectivity, electrification, self sustaining riding and automobile sharing and also dedicated to turning in safer, better and greater sustainable approaches for humans to get around (General motors 2019). General Motors, its subsidiaries and its joint mission entities promotes vehicle and motors under Cadillac, Chevrolet, Baojun, Buick, GMC, Holden, Jiefang and Wulingbrands including other companies like OnStar, a global leader in vehicle safety and security services, Maven, its personal mobility brand, and Cruise, its self reliant automobile ride-sharing company (Chervolet 2019). General Motors annual revenue for 2018 was $147.049 billion, which was increased by 1% from $145.588 billion annual revenue of 2017 (Macrotrends 2019).

2. Strategic evaluation

2.1 Environment Analysis of General Motors

As per the macro-environment analysis of General Motors, they suffered politically and economically because the reductions come as the largest U.S. automaker undergoes a massive restructuring announced with the aid of CEO Mary Barra in November 2018. GM is halting manufacturing at five plants in North America and cutting 14,000 jobs as it realigns its group of workers and plants to produce more electric powered vehicles (Clifford and ferris 2019). Among the factories GM plans to close one in Lordstown, Ohio, where Chevrolet Cruze gets manufactured and getting closed because of poor sales of the model it manufactures (Olorunnipa and Sink 2018). Ohio is a imperative political battleground in presidential elections. In 2016, Lordstown, Ohio, helped deliver the presidency to Donald J. Trump, having a bet that he would fulfill his promise to retailer its auto industry (Tavernise 2019).

Being multinational automotive company General Motors enterprise delivered proper outcomes on the returned of greater pricing for the fiscal year and beats consensus expectations and suggested a revenue of $147 billion are making investments of 10 billion reais ($2.65 billion) in two of its Brazilian plants positioned in the country of brazil, Sao Paulo The two plants are placed in Sao Caetano do Sul and Sao Jose dos Campos and appoint 15,000 people, jobs that will be maintained as phase of the investment plan (Reuters 2019). GM are negotiating “feasibility conditions” to make investments 10 billion reais ($2.73 billion) in Brazil from 2020 to 2024, that new investments would depend on returning to profit and focuses on competitiveness that the enterprise is experiencing in order to make a sustainable future viable for our groups and the suited return to shareholders (Reuters 2019).

In the technology and innovation field, GM in china improving research and improvement of new materials, battery testing, concept auto design and the localization of international technologies. Advanced Technical Center will focus extra on new electricity vehicles, smart linked motors and advanced materials in an effort to meet Chinese customers. The technical core has developed a third-generation metal with more desirable strength, which helps an automobile minimize its weight with the aid of 20 % and a high-performance solid aluminum alloy, which has extensively accelerated ductility and tensile strength which is 40 % lighter than conventional aluminum alloy and A far off laser-welding technology was once also developed by way of the technical center which has accelerated the welding efficiency by using three to 4 instances and cut carbon dioxide emissions by using 50 percent (China daily 2019). Because of those circumstances and market segment General Motors sells 70% more cars in China than in the US (Business Insider 2017).

In order to maintain environment, General Motors has been creating technologies that have changed our world. General Motors creates and sales an electric vehicle to the world with Zero Crashes, Congestion and zero emission of co2 gas, and advancing its lineup of current vehicles while simultaneously investing in electrification, autonomy and offerings like Maven which means it can reduce the global warming and reduce in the pollution (General Motors 2019). GM aspires to decrease its carbon footprint by 77% of which is represented by using its international automobile fleet to zero, and toward that intention plans to introduce 20 new zero-emissions cars to world markets by using 2023(Forbes 2019). The impact that trash has on waterways, marine life, animals and humans on local, regional and world ranges as phase of the 2018 launch of the Keep Belle Isle Beautiful anti-littering campaign GM Partnering with 37 different volunteer groups, employees joined the Belle Isle Spring Clean-Up to remove 1,276 pounds of litter (General Motors 2019).

2.2 Porter’s five forces framework

Porter’s five forces framework helps in determining and identifying the attractiveness of an industry in major five factors which consist of threat of entry, threat of substitute, bargaining power of customers, bargaining power of supplier and competitive rivalry (Johnson et al 2011).

Analyzing the power of buyer of General Motors, there is a high power of consumers because the same categories of vehicles with similar prices are also provided by its competitors in which switching from one brand to another has become easier. The other competitors such as Volkswagen, Toyota, Daimler AG, ford, Honda, etc.are producing the vehicles on the same categories of SUV’s crossover, sport utility vehicles and ,a pick-up truck so Corvette (sport utility vehicles) sales in the U.S. have steadily declined each year for the reason that more than doubling with the introduction of the current-generation auto in 2014. Through the first six months of this year, Corvette sales have been down 5%. That places GM on pace to promote less than 20,000 units for a second-consecutive year and marks five-straight years of declining sales (CNBC 2019).

General Motors has a highly competitive rivalry with its competitors. General Motors made a sale of $147049.0M while Toyota Motor Corporation made a sale of $271165.07M, Volkswagen $266742.29M and Ford Motors Company of $160338.0M respectively thus, evaluating the result there is a big manufacturer chasing Toyota in term of revenues and sales soon, there is an intense competition (Statista 2019).

2.3 Strategic Capabilities of General Motors

As per the resources and capability analysis of General Motors, the company has assets of $75,293,000M and the human resources have reached 173,000. It has been used to maintain the quality and standard of the products the factories have been using fully automated equipment for production but the production line-up fully integrated AV manufacturing process is the best way to build safe and reliably performing self-driving vehicles is run by the staff. It helps to lessen the workload and higher efficiency in work (General Motors 2019).

General Motors capabilities depend upon the company strategy which is focusing on workforce improvement, using employee’s capabilities in its full potential and enhancing the competitive advantage. Research and Development is the main capability of the company. The company has a lot of the best expertise; good distribution channel of having in 190 396 facilities on six continents, a large amount of capital, have been contributing to the success of the organization (General Motors). The company produces different vehicle segment from low range up to luxury brands. The company has been doing great at innovation in designing, manufacturing, and sales that give a valuable product in term of cost and quality and to hold the strong foot on global market (General Motors 2019).

SWOT analysis

One of the strengths of General Motors is to constantly improving on the products in term of quality maintenance, efficiency, and flexibility. Research and development team is the biggest strength of Toyota because it gives value to the customer and tries to adapt to the changing technology. Besides that, it is producing safer vehicles, more environmentally friendly cars, and the automatic car has proved to be their main strength (BBC 2018). Besides, The Company has a huge amount of employees having 173,000 working on a daily basis and the strong brand image of the company has been created a long time back. The company strength also lies in the creativity of the employees as they are developing advanced technology (General Motor 2018).

General Motors Co is recalling 1.205 million pickup trucks and recreation utility vehicles worldwide due to issues with a temporary loss of power steering, switches shut unexpectedly, and cutting power to brakes. The recall covers sure 2015 Chevrolet, GMC and Cadillac pickup trucks and SUVs, and consists of about 1.02 million automobiles in the United States. The automaker has acquired reviews of 30 crashes and two injuries however no deaths linked to the recall. In 2017, GM had recalled here almost 800,000 pickup vehicles international because of the equal problem. General Motors might have drawback sometimes by the defective equipment, high-cost price, and conflict between both parties. Due to the strongholds of other auto mobile companies the company has been failing to sell its electric vehicles in a growing market (CNN 2019).

With the rapidly growing market of electric hybrid vehicles, General Motors has a chance to grab opportunities as the company holds a good brand image by selling the highest number of electric vehicles and gain the trust of people with its innovation and reliability and leans toward electrification and intelligent connectivity, the automaker said there are higher requirements for auto materials (Dandan 2019). Michelin and General Motors presented a new generation of airless wheel technology makes the Uptis Prototype eliminate flats and blowouts. This means Uptis offers significant potential for reducing the use of raw materials and waste, contributing to GM for a world with zero crashes, zero emissions and zero congestion (General Motors 2019).

The Company presently runs two manufacturing facilities in the country. India is anticipated to surpass Japan as the third largest auto market in the subsequent decade. General Motors has introduced that it plans to give up selling Chevrolet company automobiles in India at the give up of 2017. India has an extremely low vehicle penetration rate, with solely 32 vehicles per 1,000 human beings as of 2015. This potential that there is substantial room for the auto market to grow and, car sales could double from 3 million final year by 2025. However, there are costs to capture this growth that General Motors isn’t inclined to take on and possibly difficult to hold the market (Forbes 2017).