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General Motors is an automotive company based in United States with its headquarters in Detroit, Michigan city. The company is the world’s largest automaker. The company operates in 157 countries worldwide and it employs around 210,000 workers across the globe (Berger, 2001). It manufactures vehicles in 31 different countries across the globe. General motors on star subsidiary provide vehicle safety, security and information services (Lawrence, 2008).
The company was started in 1908, in Michigan as a holding company for Buick. Charles Stewart was General motors co founder whose carriage company was merged in Buick. During the year 1909, the company obtained two companies namely; Reliance truck and rapid vehicle motor companies of Owosso and Pontiac Michigan respectfully. General motors was ranked the best in the world in terms of sales among all motor companies during the second half of twentieth century (Bell, 1965).
However, the company sales declined in the year 2010 when it was ranked second globally. General motors sell its vehicles to motor vehicle dealers as well as to fleet customers (Graeme, 2004). Fleet customers include commercial fleet customers, automotive leasing companies and governments. The major markets of General motors include the United States, china, the United Kingdom, Brazil, Germany, Canada and Italy (Alfred, 2004).
The company provides automotive financing services through its subsidiary. General motors financial company purchases automobile finance contracts for new and used vehicles purchased customers primarily from franchised and select independent dealerships. The company operates under United States department of the treasury. General Motors Company is positioned as one of the ‘green’ companies as it tends to reduce environmental pollution.
The company supports the use of renewable energy (Beverly, 2002). Environmentally, the company has laid down strategies as well as proving a reliable website to reach the public. All the waste materials resulting from the company’s production processes is recycled. General Motors Company has worked on alternative technology vehicles and has developed ethanol flexible fuel vehicles in the motor industry.
The company initiated use of turbochargers and v6 engines. It initiated the production of an all-electric automobile. It produced the first car with zero emissions marketed in America in over thirty years. In 2010, General motors company introduced Chevrolet volt, an electric vehicle that uses generators powered by gasoline (Maynard, 2003).
General motor company competes with other firms in automobile manufacturing, transportation equipment manufacturing, automobile parts manufacturing, financial services, lending and auto lending. This is because of general motors global presence and diversity of products. The biggest threat of general motors company in terms of competition is from foreign companies (Maynard, 2003).
Foreign automobile companies such as Toyota, Honda, and Nissan dominate small, medium to a large car market due to their flexibility and cheaper prices. Cars such as the highly successful Toyota prius are a significant challenge for General Motors own Saturn hybrids. Foreign companies account for more than half of the United States automobile market (Alfred 1994).
The automobile firms compete on both pricing and non-pricing issues. The pricing competition reduces profits by increasing price cost margins while non-pricing competition drives up fixed cost and marginal cost. The high rivalry in the automobile industry is due to lack of differentiation opportunities (More, 2009).
All automobile companies produce cars, trucks or SUVs. Significant market share variations, has been witnessed in the recent days, this is another indication of rivalry that is a remarkably strong threat to profits. Below is the analysis of General Motors Company and its competitors in the automobile industry (Alfred, 2004).
General motors and competitors comparison
|Qtrly Rev Growth (yoy):||7.80%||N/A||10.60%||-4.80%||11.90%|
|Gross Margin (ttm):||12.18%||N/A||14.83%||11.31%||19.69%|
|Operating Margin (ttm):||3.92%||N/A||6.25%||0.65%||5.85%|
|Net Income (ttm):||7.62B||-652.00M1||6.79B||2.61B||N/A|
|PEG (5 yr expected):||0.42||N/A||0.79||0.93||0.52|
|Pvt1= Chrysler Group LLC(privately held)|
|F= Ford Motor Co.|
|TM= Toyota Motor Corp.|
|Industry= Auto Manufacturers – Major|
|1= As of 2010|
Automotive companies Ranked By Sales
|General Motors Company||GM||22.05||0.0%||32.93B||4.60|
|Toyota Motor Corp.||TM||65.78||0.0%||106.27B||40.73|
|Ford Motor Co.||F||11.43||0.0%||42.30B||6.68|
|Nissan Motor Co. Ltd.||NSANY.PK||17.32||0.0%||38.32B||10.01|
|Honda Motor Co., Ltd.||HMC||32.34||0.0%||56.48B||19.94|
|PSA Peugeot Citroen||PEUGY.PK||18.26||0.0%||3.92B||2.44|
Top Automotive Manufacturers
|Volkswagen AG||VKW.L||109.36||UP 0.26%||50.88B||3.11|
|Tata Motors, Ltd.||TATAMOTOR.NS||201.20||UP 3.74%||N/A||N/A|
|F-PYME NC5||F.MX||152.83||UP 2.57%||580.77B||91.68|
|Bajaj Auto Ltd.||BAJAJAUT.BO||1,426.30||Down 4.70%||412.72B||11.95|
|Mahindra & Mahindra Ltd.||MNM.BO||638.20||Down 4.25%||374.78B||12.44|
|General Motors Company||GM||21.05||Down 0.00%||32.93B||4.60|
General motors company uses various communication techniques to inform potential customers about their products and services. The company provides resources that broadcast its corporate achievement and advancements across the globe. Communications plays a vital role to both internal and external audiences, and it gives a voice to general motors’ people, products, activities, positions, and company information. Communication in general motors company consists of four main areas (Bell, 2003).
Product communications involve product publicity strategy in support of engineering, sales, marketing, advanced technology, motor sports, and auto shows. Corporate communications in general motors involve general motors news media relations; community and philanthropic relations; diversity initiatives; and financial, labor and purchasing communications.
Another form of communication adopted in general Motors Company is the internal, financial and executive communications (Church, 2003). This involves different employee groups, management of financial issues and media relations support to senior executives. The fourth form of communications is operations communications.
It involves all the logistics, such as producing press kits, coordinating program events, and communication supplier research, maintaining general motors websites and implementing the use of emerging technologies. People who have worked in the news media, auto companies and public relations agencies enhance communication growth in general motors.
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General motors enhance communication through giving employees opportunities in media relations, product communications and internal communications (Post, 2003). It uses online social media like blogs, Wikipedia, podcasts, video and other technologies. These emerging media provide dynamic new communications lines for the motor vehicle industry (Davidson, 2000).
General Motors Company is involved in social media activities through authorized corporate channels. In this case, only employees authorized by the company can address the public on these media on behalf of the company.
Some employees in this company may wish to be involved in social media on a personal basis and communicate their individual opinions regarding general motors or its products.
After returning from bankruptcy, general motors developed a multi-city road show and online road show to help the management in communicating the company’s ongoing return to profitability. It conducted executive media interviews after it resumed trading in the stock exchange (Vincent, 2004). This helped in reaching key audiences and ensured accurate message delivery.
The Company collaborated with NYSE EuroNext in conducting opening bell ceremonies. This involved conducting a parade for general motors vehicles outside NYSE. It conducted online activities to pass information about its IPO. It conducted internal communications to educate employees about the offering and improve confidence in the new company.
The company held a peculiar employee celebration at its headquarters in Detroit, involving local entertainment and executive remarks. It conducted direct communications with dealers and suppliers’.The Company launched a new website at gm.com, mysocrates. General motors put posters on all factories to advertise its products.
Sometimes car dealers are given posters to display on their windows. General motors company uses the above communications strategies to advertise its products in order to increase sales. The adverts were faced with various criticisms. For instance, the company advertised that Chevrolet Volt is an electric vehicle. This was discovered to be a false statement as the gasoline engine of the vehicle kicks in during a hard acceleration (Farber, 2001).
The company made the advert in order to show that its products are environmental friendly, but this was a form of green wash. Ralph Nader, a consumer advocate, criticized general motor products especially the Chevrolet on vehicle safety issues. The company was taken to court for attempting manipulation with Ralph and Robert Kennedy present at the trial. The company was accused of corruption, mismanagement and total irresponsibility at the top management.
The company has been criticized because of using government fund to repay government loan in order to get more money. The company announced that it had repaid millions in dollars, in government loans, but many people have questioned how it exactly did that. The company made television advertisements indicating that the automaker repaid the United States and Canada loans five years ahead of Schedule. The Company has been accused of performing an accounting trick by paying back taxpayers with taxpayer money.
General Motors Company is one of the biggest companies in the world. It is one of market leader in the automobile industry. It is the world’s largest manufacturer of cars and trucks. It faces competition from other automobile manufacturers such as Honda, Toyota, Nissan, Ford Motor Company among others (Pelfrey, 2006).
The company faces many risks in its operations such as legal risk, currency risk, and interest rate risk among others. Currently the company is trying a risky strategy of bringing to market its small car, the cruze. General Motors has been trying to develop new models to improve the performance of the company as a whole (Roe, 2002).
There is a possibility of the company merging with another company, so the company should start acting rather than waiting to act. The company has been promoting the production of flexible fuel vehicles, which are friendly to the environment. This has helped the company to increase its sales revenue and improve its public image.
Today most consumers are purchasing “green” products and General Motors has been trying to manufacture these products. The company uses renewable energy to avoid environmental pollution. It has established guidelines towards protection of the environment and has an extensive website that informs the public.
The production waste released by the company is recycled or reused in the production process in order to reduce environmental pollution. The company is also undergoing corporate restructuring, in addition to the development of, the “green” products (Blumenstein, 2007). It has implemented a three-year restructuring strategy to improve its debt position.
The restructuring strategy includes the closure of several production plants, making significant job cuts, introducing new automobile lines and redesigning general motors overall marketing strategies. The marketing strategy is crucial for the company to remain competitive in the automobile industry (Krisher, 2007). The company is a leading contributor to charity in cash contributions and kind donations.
General motors need to implement the strategy of producing hybrid vehicles in order to increase its market share. The hybrid industry is increasing in sales and other competitors in the automobile industries are capitalizing on this industry. The company should concentrate on producing fuel-efficient vehicles this will enable consumers to realize that the company is responsible towards the environment.
The company should also reduce cars and trucks, which are not environmental friendly in order to reduce environmental pollution. It should also perform extensive research about its competitors in order to improve its operation. The company should also improve on its communication strategy in order to avoid future criticism. General motors should also cut non-profitable product lines to further development of hybrid production.
It should continue manufacturing new products by adopting advanced technologies in order for it to survive in the, competitive t automobile industry (Madsen, 2001). Finally, the top management of general motors need to be reviewed occasionally in order to avoid the company becoming bankrupt again.
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