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SWOT Analysis of GM Report (Assessment)

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Updated: Nov 30th, 2019

Strengths

GM, based in Detroit, is the second leading auto producer after Toyota. It was founded in 1908 and has been a market leader on a global scale for close to 80 years. One of GM’s strength is that it operates different brands i.e. Chevrolet, Hummer and Cadillac in America. This makes it easier for it to penetrate the market; furthermore, the company has other brand and subsidiaries worldwide. GM has guaranteed its global presence by entering into partnerships with different companies such as Daewoo.

It has also enhanced the levels of cooperation with Isuzu and Suzuki. It is not forgotten that GM has manufacturing ventures with different companies, like Renault. GM also has advanced technology cooperation with Daimler, BMW and Toyota. The company has close to 200, 000 employees worldwide with manufacturing and assembly plants in 34 countries. These contribute to its penetration of the market.

Weaknesses

GM pays remarkably high additional benefits to its employees. These amounts are much higher than what their competitors pay. With all other factors constant, they spend much more than their rivals such that a weaker balance sheet is guaranteed.

Union agreements have also made GM absorb many employees thus a large workforce that may at times be redundant. Since general motors manufacture up to 70% of the spare parts used during assembly, they end up with higher unit prices since they have to recover their investment in the parts and the assembled vehicles.

Their competitors buy ready made parts from other dealers and may bargain for discounts during purchase, thus a lower vote head. GM has outdated information structure that cannot be used effectively to communicate with each other. They should embrace Internet connectivity and use it to provide a host of other products. GM should also diversify its products. Great emphasis has been placed on motor vehicle production and sale thus limiting market growth.

Opportunities

The company has a chance to improve on its current status in the market. This is because they have strong market bases in America, Germany, UK, Canada, China, Brazil and Italy. These markets have not been largely infiltrated by other automobile brands. GM should therefore, rethink and redesign its products in order to penetrate these markets.

While individual buyers may not have a lot of power against such a large manufacturer, collectively buyers have enormous influence on the market trends hence may affect line success or failure. Taking this into account, GM should make customer satisfaction a priority.

Threats

The biggest threat to GM is in the developing world, where brand loyalty is not existent, and shopping habits are determined by price. The business was out of touch with the customer wishes thus manufacturing expensive units that could not be easily sold. This was the principal contributor to the company’s failure, as the units consumed more fuel, in addition to the, high purchase and maintenance prices. Workers may use their unions to extract proceeds from the company during the procurement of spare parts, a necessity for car assembly.

As opposed to the United States, emerging markets have alternatives to car possession, like public transport, walking or biking. Purchasing vehicles is not a necessity in such settings. It is notable that vehicle purchasing is determined by complementary factors, including fuel prices, availability of space for parking, communications and insurance. Any deficiency or lack of access to the above mentioned privileges may negatively affect vehicle purchase.

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"SWOT Analysis of GM." IvyPanda, 30 Nov. 2019, ivypanda.com/essays/swot-analysis-of-gm/.

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IvyPanda. 2019. "SWOT Analysis of GM." November 30, 2019. https://ivypanda.com/essays/swot-analysis-of-gm/.

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IvyPanda. (2019) 'SWOT Analysis of GM'. 30 November.

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