The SWOT Analysis of General Motors Corporation will be discussed in this post.
General Motors, also recognized as GM, is an American multinational corporation. It conducts the business of designing, manufacturing, and selling of trucks, cars, and automobile parts. It has worldwide operations. The company was founded on September 16, 1908 by William C. Durant. The headquarter of General Motors is in Detroit, MI. After it went bankrupt, it has been restructured to General Motors Company LLC (the New GM) from General Motors Corporation in the year 2009. The new company purchased the name and most of the old GM’s assets.
General Motors SWOT Analysis
- World Wide Availability: General Motors dominated the global market for 77 long years  from 1931 through 2007 in term of sales. In 2008, 2009 and 2010, General Motors was ranked as the second largest global automaker by sales. General motors again gained its first position as the largest automaker in the world, in term of sales.
- Large Market Share: Though the market of USA fell low in recent years, it has gained more than 25.4 percent market share in Europe.
- Strong Presence in China: The emerging market China grows rapidly. It’s a large automotive market. General Motors is the second largest automotive seller in China automotive market.
- Strong Portfolio of Brands: General Motors has 18 brands in its portfolio which includes Buick, Cadillac, GMC and Chevrolet that are very much popular in USA and China.
- Large Market Share in the Home market: General Motors holds 18% share in the home country which is a pretty big size.
- Robust technological capabilities: General Motors possess strong product designing and development capabilities. It spent $7.4 billion on R&D activities in the year 2012. It focused on designing and developing new products, improving existing products, improving fuel economy and the safety of customers.
- Strategic Alliance with Honda Motors: Strategic alliance helps to develop new strengths when two or more companies come together to combine their operations. General Motors and Honda recently announced the first joint venture in the world. They together will produce cell system of hydrogen fuel. The new venture wil be called Fuel Cell System Manufacturing Plant. The two companies are investing equal amount and the plant is expected to start its production by 2020.
- Expensive Cost Structure: General Motors’ cost structure is very high and its driven by employee compensations and benefits.
- Poor Relation between Employee and Management: One of the biggest weakness of any company is the internal relationship. The relation between employee and management is very poor. It results in poor communication which lessens the productivity of General Motors.
- Focus on Home Country: General Motors focuses more on its local market. It works as a barrier to expanding globally.
- Energy Efficiency: unlike other automotive companies, General Motors does not focus on energy efficient vehicles.
- Potential Growth in India: India is another large market of automotive. General motors can easily make entry to the Indian market.
- Positive Operations Towards Environment-Friendly Vehicles: people are more concerned about the environment today. If General Motors work on this, they will be able to grab larger market shares.
- Growth through Acquisitions: General Motors successfully did acquire many automotive companies in the past. If they do it continuously, they will be able to expand more in future.
- Focus on Global Market: if they concentrate on expanding globally more, they can grab more market shares globally.
- Employee-Management Relationship: they must improve this internal relationship which could introduce strong communication network inside the organization.
- High Raw Material Cost: the raw material cost is increasing. This will result to in increase in the product price that may work as a constraint in expanding.
- Increasing Fuel Price: As GM does not provide fuel efficient vehicles, sales may fall if fuel price increases.
- Financial Crisis: For last few years, most of the US companies facing financial crisis. As General Motor is an American company, it has been facing the same financial crisis as well.
- Volatility of Currency Exchange Rate: the fluctuating dollar rate may bring negative effect in the financial statements.
- Fuel Price: the sales of the vehicles and the price of fuel are negatively correlated. If there is a hike in oil price, the sale of vehicles will go down. This is working a major threat for General Motors.
The Environmental analysis or SWOT analysis of General Motors clarified the strength & weakness of, and the opportunities & threats for General Motors. GM offers diversified models of vehicles. Also, it has a huge reputation of dominating the market in sales. And the largest opportunities waiting for General Motors is global expansion.
Other SWOT Analysis:
- Ford Motors SWOT Analysis
- Mazda SWOT
- Toyota SWOT Analysis
- SWOT Analysis of Tesla Motors
- SWOT Analysis of volkswagen
- SWOT Nissan Motors
- SWOT Analysis of Lenovo
- Financial Statements of General Motors
- GM official Site