Introduction
General Motors Corporation normally known as GM was established in 1908. It is the world biggest and a leading multinational auto mobile manufacturing corporation. GM Corporation has the biggest number of employees in the world. The corporation has different brands of vehicles in the market that include Chevrolet, Daewoo, Hummer, Wuling and others. It is the ninth publicly traded corporation in the world. (Laura, 2008)
Mission and vision
GM is one of the respected auto companies in the world. It has a variety of products that ensure that the company is fairing well in the market. The company�s head quarters is located in New York, United States and looks forward to establishing an outlet in every country of the world.
Product analyses
The planning strategy is looking on how the GM products are fairing in the world auto market. The existence of the company in the market is based on an extensive research that was carried out in the European market which shows that there is still large untapped market potential in the auto industry in Europe and other parts of the world.
The GM Company specializes in Designing and making of automobiles, trucks, locomotives, and related parts such as chassis, interiors, drivetrains, and electronics. (Brandi, 2007)
SITUATION ANALYSIS
GM SWOT Analysis
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General Motors is the market leader in the world auto makers� market. In Europe and America, it has the largest share of the market with more than 30 percent of the market share. The following is the SWOT analysis for the company in the world market:
� Strengths
a) The GM Corporation has an already large established business in the auto market. Since 1930, the corporation has established itself as a world leader in the auto market. It has operated in United States since 1908. In line with its vision, the corporation has been striving to be the world leader in the auto industry. Through innovation and strategic marketing, the GM has acquired about 30% of the world auto market.
b) The GM has good market reputation. With strong brands in the market, the corporation is well positioned in the market. In the US market GM has strived to build a good market reputation. This has worked positively for its brands. It is on this good reputation that the market can embark on introducing new brands in the market.
c) The target market is also quite large. The auto market has been recording growth in the recent past and there are future prospects of growth. Therefore the target market is quickly expanding.
� Weakness
a) The target market is quiet large and there are fears the demand for the GM brands may outdo the capacity of the corporation to satisfy the demands of the market. It is still not clearly established the rate of growth of the GM�s brands in the market but there are expectation that the product will record a high growth rate. This means that the restaurant will need to increase its production capacity in order to match the rate of growth of the market.
b) The corporation has been able to establish a distribution network of its brands in the world that matches the demands of the market. In this case the GM Corporation has managed established a distribution network to the interior due to infrastructural development.
c) Banking on the success of the other auto makers in the market may have negative effects on the introduction of the GM hybrid brands in the market since they will be targeting different markets.
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� Opportunities
a) The GM Corporation is marketing its products in a growing market. This is a unique opportunity for the corporation. A stagnant market becomes difficult to introduce new products because there are already other companies which are likely to bring in competition.
b) The GM Corporation can introduce its products in the market in unique way. With the growing importance of classic motor shows, the corporation has of late been sponsoring motor rallies that are also used to market the company�s brands. This will help in introduce the brand in the market in unique way. The corporation can also sponsor other events like sports or engage in corporate social responsibility activities like girl child education to help the target market identify with its product more.
c) The corporation can use a wide range of marketing strategies which will lead to the overall growth of its product in the market. The US advertising market has been growing at a rapid rate which means there will be an array of opportunities for the growth of the market. There are many advertising strategies for the company in the US market.
� Threats
a) There are threats of entry of other brands in the market. In this case there are threats of entry of new and existing companies in the market which will increase the level of competition in the market. There are other companies which are likely to introduce the same model in the market once there is success of the initial brand.
b) There is a threat of change of the current external environment which is likely to alter the nature of the market. For example change in the taxing regime, government laws regulating the industry, and other factors which are likely to impact negatively on the industry. (General Motors, 2007)
Company analysis
(i) Strengths
GM Corporation is among the market leaders in the auto market. For more than seven decades, the corporation has established a market portfolio that has positioned it well in the auto industry. Currently the GM Corporation has a market share of more than 30 percent of the auto market.
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The Corporation has a worldwide operation. This gives the corporation a chance to transfer products which have been successful in one market to the other emerging market. The corporation is able to build special cars upon request with specific directions given by the customer.
GM Corporation has good human resource policies which have ensured the growth of the corporation in a recent 2006 survey GM corporation was ranked the 1st overall greatest place to work. The corporation has been improving its ranking in the recent past for the last 30 years. All over the world the corporation employs more than 300,000 employees operating in the corporation world wide. (David, 2004)
One of the most important factors in the overall growth of the corporation has been heavy investment in technology. Through innovation the corporation has placed new brands in the market which ensures reduced cost of production. Investment in the new technology has ensured the growth of the corporation in the market.
The corporation has a strong management team with a strong centralized management structure. This ensures that there is standardization of operations procedures in all its departments. The corporation also has put in place effective corporate management structures which ensure timely disclosure of information on the performance of the corporation. This is important for the overall financial management of the GM Corporation.
The company�s share has been fairing well in the market that has enabled the company to have a lead and call more investors to invest in the company. GM, unlike other major companies and groups in the industry, its known for high dividends compared to its major competitors. Since the introduction of the company�s share in the stock market, the share prices have been shooting up and this have been contributing to the improved profits to the company. (Vincent, 2004)
(ii) Weakness
The corporation has not been able to standardize its operation in all the departments. For example while the Toyota and Ford auto makers have strong market share in Africa and other emerging market, its market share in the established market seems to decline. Its American market share is strong enough to guarantee its market leadership.
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The GM�s corporation new model are associated with high prices as compared to Toyota Prado, Lexus and Nissan Xtrail, this has contributed to reduction in sales as most people would go for most executive and cheap cars. This has contributed to the company�s falling on loss in the year 2007. (People’s Daily Online, 2008),
Internal and external analyses
In the internal environment of the company, the company has several structures that help the company to have a smooth running of its businesses. The leadership structure is one of the cornerstones of the company�s success; the good leadership in the company has been a result of the company�s success. The company has also involved itself in the use of technology that has on the other hand has propelled the company to greater heights as a result of high quality and more products produced by the company.
GM has well laid policies that enable workers leaders� interrelation and this helps the company to have smooth running and motivated workers. The use of IT has on the other hand helped the company to have a good consumer producer relation and also communication in the company.
In the external environment, the company more major threats that are likely to arise besides the currently existing, there are threats of entrance of new companies in the market that are likely to add competition on the currently existing. In this regard, there likelihood that customers are going to increase their bargaining powers as there is variety of products in the market to choose from. This will walk hand in hand with the increase of substitute products in the market thus posing a problem to the pricing of the product. As there would be high demand of low materials, there is likelihood that suppliers would increase the prices of their supplies thus increasing the cost of production that will in turn reducing the company�s revenues. This will all be added to the existing competition among the rivalry companies in the market. (John, 1995),
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Major competitors
There are three major competitors in the auto industry that GM is competing with. GM is a market leader in the industry. The other competitors are also well established and there fore the level of competition is very high (Leslie, 1983)
GM TOYOTA
NISSAN
Core Strength Wide established operation and good reputation Wide established market with reputation of low live vehicles Reputation of low life span vehicles
Secondary Strength Wide distribution network Links with big retail markets globally Not well established distribution net work especially in US
Biggest Weakness Weak distribution system Weak market appeal Low quality products
Technology competency
As the technology competency has been listed one of the most important growth factor behind the corporation�s success in the emerging market has been the use of modern technology which gives it an upper hand compared to other auto makers group. The corporation has been testing new technology in the established or in its main market and then transferring the most appropriate technology to the emerging market. This has been an important growth factor in the overall performance of the corporation. In line with the growth of e-commerce, the corporation has built its site from which customer can access all the needed information about the operation of the corporation. The corporation site is the main communication centre between the corporation and other stakeholders.
Macro level market (Industry) analysis
The auto industry in the whole world is in its mature stage. This marketing research data from the industry shows that the industry has been making impressive growth in the US economy.
The total auto market is valued at about $1Trillion. This is a huge overall turnover which is equal to that of established markets.
Most the new and modern auto brands are used mostly in the urban areas. The urban market constitutes about 73 percent of the total market. This is a skewed market share compared to the rural market which accounts for about 27% of the total market. This market data shows that the rural market has not been well tapped into. With more than 30 percent of the Americans living in the rural areas, it means that there is a high potential in the urban market
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However the GM corporation brands have recorded the highest market growth rate recording about 23 percent growth rate. This is a higher growth rate compared to other markets in the world. (General Motors, 2007)
Conclusion
The GM Company has a considerable market share in the auto manufacturing industry. It has high potential of growth by far if the planned strategies are implemented and are put in to great consideration. The company has strong reputation in the consumers that the products produced by the GM are of high quality and affordable.
The competition in the market would only be won by the company with customers� satisfaction strategies that will boost the company�s sale therefore increasing their profits. GM is facing stiff competition from other competitors who are well established in the market and have low priced vehicles like Toyota and Nissan.
Reference:
Brandi, C.(2007), Leaders of tomorrow, Retrieved from www.gm.com/corporate on 3rd Nov 2008
David, L. (2004): Strategic marketing in a new market. Harvard Business Review
General Motors (2007) Annual Report | Page 2 of 4 Retrieved from www.gm.com on 3rd Nov 2008
John, B. (1995), The American Automobile: A Brief History. University of Chicago Press,
Laura, H. (2008): General motors. New York Times, June 2007
Leslie, W. (1983) Wizard of General Motors, Columbia University Press
Vincent, P. (2004) Surviving Transformation: Lessons from GM’s Surprising Turnaround
People’s Daily Online, (2008), GM reports record $38.7 bln annual loss in 2007 – Retrieved from http://english.peopledaily.com.cn on 3rd Nov 2008
