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External Analysis Module 2 SLP [Pick the date]
General Motors is one of the most prestigious names in the history of automobiles. Founded in 1908, it was basically known for catering the taste of American manufacturers. Once GM was considered to be a vital cell of U.S. economy. Infact, it was said; "where GM goes, so goes the nation." The notion doesn't stand true anymore as GM was bankrupted in 2009 which was later on bailed out because of Government aide. GM is gigantic organization which has a potential of being a market leader if it exploits the opportunities available to it and mitigates the threats caused to it because of changing global scenario.
General Motors has various opportunities in hand which if exploited properly may turn out to be beneficial for this company. As of now, India, China, Russia and Brazil are the fertile regions for GM. Its demand in BRIC nations is increasing exponentially and a deliberate effort can do miracles for it in this region. Now that Toyota is losing its grip over this main sales region due to compromised product quality, GM can make the most of this situation by product differentiation. It needs to produce products which can satisfy the customers and get out of the shadow of "Car made for Americans." Secondly, the market for hybrid and plug-in cars is still vast although GM has introduced six models already but there is a lot of room for more models which can be cost effective as well as design-efficient. Thirdly, a global market for trucks is increasing by leaps and bounds and is further expected to show tremendous growth till 2015. Now that GM has a major market share in global truck manufacturing market, an elaborated effort in this segment especially in BRIC region can increase its sales heavily.
As GM has various opportunities in hand, it is also facing various threats which might put its existence in danger. Global automotive industry has a highly competitive nature. GM does enjoy customer loyalty but global market has gone through a huge market crunch during recession. This also has impacted GM to a greater deal. Due to its huge structure, GM bears heavy fixed and in order to combat these costs, it has to either charge heavy prices or sell greater number of vehicles with thin margins by providing lower interest rates. Either way, this competition demands attention of GM. Furthermore, in past few years, environment protection agencies such as EPA and DOT, have been quite active in coming up with regulations which ensure production of environment friendly cars. GM is forced to make vehicles which provide environment protection, user friendliness and fuel economy. All these attributes in a vehicles obviously demands increase in production costs and if the regulations are not followed, it may have to face heavy penalties. Recently almost key players have sustained low profit margins due to increased prices of raw materials and rocketing fuel prices. The earlier has increased the production cost which is reflected in the prices later and the later affects the vehicles demand directly.
Considering the above mentioned facts, General Motors is a reputable name and a key player in global automotive industry. Although it has suffered heavy losses in past few years and due to its huge structure, it cannot curtail the costs that it is bearing however by investing duly in new breed of hybrid cars, investing more in new markets, satisfying customers with product differentiation and addressing environmental issues, GM has a potential of being a market leader, following its own legacy.
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