General Motors Industry
Analysis
Team 4: Sofia Paredes, Haylee Berner, Dylan Hawkins, Linna Wu
General Motors History
● Founded in 1908 by William C. Durant
● Originally acting as a holding company for Buick
● GM dominated the U.S. auto market throughout the 20th
century
● In the 1960s, GM held 48.3% of the overall U.S. market
share
● Began to lose market share in the 1970s
General Motors Company
General Motors Company (GM) is an American multinational corporation founded in 1908 by William C. Durant
● Headquarters reside in Detroit, Michigan.
● GM is one of the “Big Three” automakers of the world
○ GM, Ford, Chrysler
General Motors has made it their goal to produce cars that portray modesty and class for a wide variety of consumers.
● Popular brands include: Buick, Cadillac, Chevrolet, and GMC.
General Motors Past and Present
GM STOCKS 2009 vs. GM STOCKS 2019
“Surviving on Federal loans” “Holding 17-18% of the U.S. market share”
PEST Analysis
The PEST analysis is a strategic tool to analyze the macro environment of an organization.
PEST stands for political, economic,social and technological that impact the macro
environment of a company.
1. Political factors that impact General Motors Company
2. Economic factors that impact General Motor Company
3. Social factors that impact General Motors Company
4. Technological factors that impact General Motors Company
The Industry
● Competition between companies to develop, manufacture, market, and sell motorized
vehicles
● One of the biggest economic markets related to revenue
● Very competitive with companies from all around the world to bring the best vehicles
to the market
● Safety, luxury, fuel efficiency are all examples of advantages companies are trying to
achieve
● Companies aim to connect with markets worldwide, but work to deliver vehicles to
big populations
Demand and Competition
● General Motors aims to hit populous countries where motorized vehicles are needed
● Factors that put GM over their competitors are low-cost, accessibility, and their well-
known brand
● In the US, Ford and Toyota are GM’s biggest rivals
● Production and cost of vehicles in the US are very high
● Smaller markets would be ideal for automotive companies, but since everyone needs
vehicles large markets are sufficient
● GM’s competition is in the same market, so GM will do anything they can to gain an
advantage.
Applying Porter’s Five Forces
● Substitutes
○ Ford, Toyota, Uber, etc.
● Threat of entry
○ Government and legal barriers, product differentiation, costs of producing
● Rivalry between Competitors
○ Diversity, product differentiation, technology
● Buyer Power
○ What is the buyer willing to pay? Will GM make money?
● Supplier Power
○ Is GM getting the best quality material for the lowest cost? Raw materials are very important in this
force.
Identify industry structure
General Motors Company has a regional divisional organizational structure. This type of
organizational structure involves grouping business activities according to geographical
segments or areas of operations. The following characteristics are notable in General
Motors’ organizational structure:
1. Regional segments
2. Business type divisions
3. Corporate functional groups
Developing Strategy
● General Motors has a simple development strategy
○ Low Cost strategy
○ Low vehicle cost
○ Ex. BMW or Volkswagen
● Opening more and more dealerships
○ More accessibility to customers
○ Multiple dealerships across a small region
○ Ex. Range Rover
● Focus on brand recognition
○ GM markets their brand and image
○ Features on their vehicles are appealing
Key Success Factors
● Key Success Factors are the strategy elements, product and service attributes, operational approaches,
resources, and competitive capabilities that are essential to surviving and thriving in the industry.
● Factors for the success of General Motors moving forward will be their ability to stay ahead of the curve and
produce more and newer electric only vehicles along with getting more customers to use their financing with
GMAC.
SWOT ANALYSIS: General Motors
Strengths: Weaknesses:
● Global presence ● Brand dilution
● New vision and strategy ● Bureaucratic culture
● Strong brand portfolio ● Car recalls
● Strong presence in China
● Knowledge of home market
● Well performing brands
SWOT ANALYSIS: General Motors
Opportunities: Threats:
● Increased competition
● Positive attitude towards
● The rising U.S. dollar
“green” vehicles exchange rate
● Increasing fuel prices ● Increasing government
regulations may raise the costs
● Changing customer needs ● U.S. automotive market is
● Growth through acquisitions poised to slow down or even
● Growing global automotive decline
industry
Resources and Capabilities
Tangible Resources: Human Resources:
● Financial ● Changed from a tactical to a strategic role
● Plant and Equipment ● GM is hiring about 200 people a year out of elite
schools such as the University of California at
Intangible Resources: Berkeley, Stanford University, and Massachusetts
Institute of Technology.
● Innovational ● The company also has attracted more women
● Reputational (Brand)
Recommendations
Since their troubles after the last recession General Motors has been able restructure
their core brands and provide for the needs of their customers. I would recommend
General Motors must continue in this direction to save; keeping up-to-date with the latest
technologies, listening to consumer demands, and producing cars which meet the needs of
today’s driver. I would also recommend they continue to stay in the global market, this
keeps the company very diverse and helps them stay one step ahead of the competition.
References
● Dockalikova,I., & Klozikova, J.(2014, November). MCDM methods in practice: Determining the significant of PEST Analysis Criteria. In
European Conference on Management, Leadership & Governance.
● Gaba, V.,& Joseph,J. (2003). Corporate structure and performance feedback: Aspirations and adaptation in M-form firms. Organization
Science, 24(4), 1102-1119.
● Grant, R. M., & Jordan, J. (2015). Foundations of strategy. Hoboken: Wiley.
