Table of Contents
A. Introduction
B. Identification of Organization
C. Strengths, Weakness, Opportunities, and Threats (SWOT) Analysis
D. Organizational Strategy
E. Recommendations
F. References
A. Introduction:
General Motors Company, commonly referred to as General Motors (GM), is an American multinational corporation headquartered in Detroit that designs, manufactures, markets, and distributes vehicles and vehicle parts, and sells financial services, with global headquarters in Detroit\'s Renaissance Center. It was originally founded by William C. Durant on September 16, 1908 as a holding company.
The company is the largest American automobile manufacturer. In 2016 it was the fourth largest automobile manufacturer in the world, behind Toyota, Volkswagen, and Hyundai/Kia. General Motors manufactures vehicles in 37 countries; its core automobile brands include Chevrolet, Buick, GMC, and Cadillac. It also owns or holds controlling interest in foreign brands such as Holden, Wuling, Baojun, and Jiefang.
Annual worldwide sales volume reached a milestone of 10 million vehicles in 2016. General Motors employs over 180,000 people and serves in five continents. General Motors main competitor are: Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG, Ford Motor Co., Honda Motor Company, Nissan Motor, Tata Motors, Ltd., Toyota Motor Corporation, Volkswagen AG and many other automotive companies. General Motors primary market is the United States and China.
B. Identification of the Organization:
General Motors Company is a major automobile manufacturer and it is engaged in the design, manufacture, assembly, and sale of passenger cars, minivans, compact cars, SUVs, trucks, and related parts and accessories throughout the world. General Motors Company envisions a future of zero crashes, zero emissions and zero congestions, and they have committed themselves to leading the way toward this future.
“At General Motors, innovation is our north star. As the first automotive company to mass-produce an affordable electric car, and the first to develop an electric starter and air bags, GM has always pushed the limits of engineering”. General Motors it’s changing with the current vision of eliminating emissions and developing vehicles that do not use natural resources. In recent days, General Motors announced the closure of several locations and restructure of the workforce which includes lay-offs in many areas.
In 2017, General Motors had the following financial figures:
• Total Revenue: $145,588,000
• Cost Revenue: $125,997,000
• Gross Profit: $19,591,000
General Motors’ organization structure has the following regional segments:
• GM North America
• GM Europe
• GM International Operations
• GM South America
General Motors serves in five continents and their structure should be based on having a regional operation for each of those continents. There are several differences that each market has and General Motors must understand the dynamics in order to introduce their vehicles to those markets. For example, a SUV might be attractive in markets that gas prices are low in comparison to markets with high gas prices. In addition to gas prices, safety features should be the same across of markets. General Motors sells a high number of vehicles in South America that do not meet the U.S. Standards for safety and it’s a factor that has negative consequences in such high competitive automaker market.
C. SWOT ANALYSIS
Internal External
Strengths
• What does the organization do well?
• What unique resources can the organization draw on?
• What do others see as the organization’s strengths? Opportunities
• What opportunities are open to the organization?
• What trends could the organization take advantage of?
• How can you turn the organization’s strengths into opportunities?
1. Global Operations
2. Strategic Alliances
3. Affordable Prices
4. Adaptation 1. Growing Latin American industry
2. Alternative fuel vehicles in current markets
3. Reputation
4. Autonomous vehicles
Weaknesses
• What could the organization improve?
• Where does the organization have fewer resources than its competitors?
• What are others likely to see as weaknesses? Threats
• What threats could harm you?
• What is your competition doing?
• What threats do your weaknesses expose you to?
1. Depending on trucks and SUVs for sale growth
2. Recalls
3. Negative image in some markets
4. Model competition 1. Competitors
2. Safety and equipment standards
3. Price of materials
4. Government regulations
Strengths:
Global Operations: General Motors is in five continents which provide a strong international presence. They manufacture vehicles that foes from sedans to SUVs and in many countries also heavy trucks.
Strategic Alliances: General Motors joint ventures with Chinese automakers allowed them to overcome the entry barrier that exits while entering a new market. These strategic alliances helped General Motors introduce their brand in a market that many competitors have not been able to do so.
Affordable Prices: General Motors marks their vehicles at a very affordable price tag in different markets, making these offers attractive to the consumer. In addition to the affordable prices, the low cost for replacement parts are also an incentive.
Adaptation: General Motors understands that a new culture is evolving for the need of alternative vehicles that do not depend of natural resources. Adapting to this new market it’s not easy but it’s important in order to continue to be competitive with several competitors that are also in the process of introducing new vehicles with alternative fuels.
Weaknesses:
Depending on trucks and SUVs for sale growth: General Motors offers different vehicles across their different brands, but relies on sales of trucks and SUVS to generate a high margin of profits. While the demand for these types of vehicles is high in the United States, but there are several markets that due to high fuel prices cannot afford the price tag of these vehicles.
Recalls: Recalls hurt their finances. There were several recalls that affected millions of vehicles for different reasons that go from power-steering to ignitions switches. The cost of recalling these vehicles are high and also created a negative imagine for the brand. In addition to covering the costs for repairs, General Motors must also spend money to settle lawsuits due to the different recalls that affected consumers directly and resulted sometimes in deaths. General Motors has recalled 1.62 million vehicles globally (Edmondson, 2014).
Negative image in some markets: General Motor fabricates and sells their vehicles in markets outside the United States, but many safety and equipment standards are not the same. Many consumers in Latin America countries feel that General Motors is all about profit and not the safety of their consumers. For example in Ecuador, General Motors vehicle only have two airbags in the majority of their vehicles, they are not equipped with the same features that a U.S. version of that vehicle will have.
Most of the vehicles do not have A/C and is an added feature by the consumer at an extra cost. All of these tactics for profit margin has created a negative image that needs to be changed in order to compete with others automakers that offer the same type of vehicle with upgraded standards for a similar cost.
Model competition: General Motors offers several types of vehicles but are their models are staying behind other automakers. Consumers see that they can purchase a more attractive vehicle for the same price tag. In several countries outside the United States, General Motors continues to offer additional equipment at an extra cost while other automakers are making the additional equipment as a standard feature in their vehicles.
Opportunities:
Growing Latin America Industry: General Motors has several vehicles models that are in several markets within Latin America countries. The need to offer a better image of their brand is important in order to gain a growing consumer portfolio in these countries. The financial stability in Latin American continues to increase and with it the financial power. General Motors could introduce several vehicles that are sold only in the United States to this market in order to gain more customers.
Alternative fuel vehicles in current markets: General Motors is focusing in introducing new alternative fuel vehicles in the United States and larger countries but it’s not focusing in small markets. The number of General Motors vehicles with alternative fuels in many countries outside the United States is low compare to their competitors.
Reputation: General Motors can improve their reputation in several markets by implementing the same standards on their vehicles regardless of the market. This will allow them to compete with other automakers in a market that a simple additional feature could be the decisive factor for a consumer.
Autonomous vehicles: General Motors is seeing the need to introduce autonomous vehicles and as we can see in recent days, General Motors in restructuring their operation in several areas which includes eliminating thousands of jobs but at the same time they continue to hire new employees that are able to design and work on these types of vehicles. The need to enter this market is important in such high demanded industry and having the edge over competitors is going to be the key for their growth.
Treats:
Competitors: Like in other industry, the auto-industry has their player fighting to gain the edge over their competitors. There are several automakers that are gaining markets in several countries due to their partnerships with surfacing automakers in those countries. This is allowing them to gain access and introduce their vehicles easier. Automakers from China a growing their presence in several countries and General Motors could make an alliance with them in other to compete with the top automakers of the world.
Safety and equipment standards: Consumers want a vehicle that is not only safe but also comes with several equipment features such as navigation system, assisted parking, etc. All of these extras as some people would call it represent a cost for the company. Finding the correct balance between not only these standards but how their competitors are implementing them in their vehicles is important in order to compete in this though market.
Price of materials: Along with safety standards, the increase in material’s prices is a concern for many industries. The consumer will be paying more due to the increasing prices or profits could be cut which many shareholders would not like it. The other factors are the operating costs in some countries. There are several costs in different regions and automakers such as General Motors have operations outside the United States in order to reduce the manpower cost and be able to have a larger profit margin but many countries are having a better economy and this is impacting their financial obligations as well.
Government regulations: The involvement of many governments around the globe to reduce the emissions and finding alternative fuel vehicles places a risk for any automaker since places restrictions on the type of vehicle that can enter that market. General Motors relies on truck and SUVs that have higher emission that smaller vehicles and this could be treat for the company if governments place higher taxes on these vehicles.
General Motors is conducting a reorganization of their operations worldwide in order to focus demand on a growing industry for alternative fuel-vehicles. General Motors is also closing several plants that currently build vehicles that do not do well in the market. The elimination of models that do not sell will allow General Motors to focus on their strongest selling models and attack new markets with model that consumer feel strong about them.
There are several factors that General Motors took into consideration to make the recent changes, operating costs is one of the most important things in an industry and eliminating models that do not provide the necessary profit margin is important. Eliminating models come with the human factor of reduction in personnel, but for General Motors is important to reduce their manpower while increasing their talented employees in areas for their future vehicles. It’s early to analyze to see if these changes will be successful or the factors that will impede it.
D. Organizational Strategy:
General Motors is currently going through reorganization in order to improve on its operations. Between 2009 and 2014, General Motors had three different CEOs which can be chaotic for an organization. Since 2014, Mary Barra has been leading General Motors. Under Barra’s leadership, GM envisions a world with zero crashes, to save lives; zero emissions, so future generations can inherit a healthier planet; and zero congestion, so customers get back a precious commodity – time.
In recent days, General Motors announced that it will cut up to 14,000 workers across North America and close possible five plans. The need to take these actions comes from changes in consumer needs and low sales in some models. Ms. Barra mentioned that the need for change came from needed actions in order to stay in front of their competitors in a fast changing market (Boudette, 2018).
General Motors will focus their efforts on self-driving and electric vehicles which are gaining market across the globe. The types of changes General Motors is making are not unique in the auto industry. In April, Ford announced it would end all production of sedans in North America. Newer companies such as Alphabet, Apple, Tesla, and Uber are also in the race, trying to build the cars of the future (Shrikant, 2018).
The organization’s leaders evaluated the needs of the company and they are taking actions to implement their plan. These changes had several negative impacts across several sectors of the United States including several high government officials but they lack to understand that an industry needs changes even though if those changes affect people.
A company needs to make those changes in order to survive and in the end it has the responsibility to provide to several more thousand people working for them. General Motors is transforming its global workforce to ensure it has the right skill sets for today and the future, while driving efficiencies through the utilization of best-in-class tools. Actions are being taken to reduce salaried and salaried contract staff by 15 percent, which includes 25 percent fewer executives to streamline decision making.
E. Recommendations:
General Motors is taking the right approach to focus on vehicles for the future. My recommendations will be to invest in their current employees in order to continue their operations and do not have many lay-offs. General Motors needs to create a plan to educate and identify highly motivated employees to learn about the new designs and implementation of new features for future vehicles.
Implement the same safety standards across the five continents, making a culture to provide the best safety standards will increase their customer loyalty and increase acceptance in many countries that do not feel that they are getting the same type of features as larger markets.
Continue to identify low selling vehicles and eliminate them from production. Partnerships with growing automakers in other to enter new markets that will allow them increase their sales worldwide bringing them higher revenue.
We will see in the near future if the currently implementation were the best for General Motors but most important if Ms. Barra was an effective leader in a large organization - that affect so many people.