SWOT analysis of General Motors

This is a General Motors Company SWOT analysis for 2013. The original analysis can

be found at General Motors SWOT analysis. For more information on how to do SWOT

analysis, please refer to our article.

Company background

General Motors Company (GM) is a corporate that designs, builds and sells cars and trucks. GM owns 18 brands,

including Chevrolet, GMC, Cadillac, Buick, Opel and many others. The company operates in about 160 countries and is

one of the largest vehicle manufacturers.

You can find more information about the company in its official website or Wikipedia’s article.

SWOT

Name General Motors Company

Industries served Automotive

Geographic areas served Worldwide

Headquarters U.S.

Current CEO Daniel Akerson

Revenue $ 152.3 billion (2012)

Profit $ 4.9 billion (2012)

Employees 202,000 (2012)

Main Competitors 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 SWOT analysis 2013

Strengths Weaknesses 1. Global presence

2. New vision and strategy

3. Strong brand portfolio

4. Strong presence in China

5. Knowledge of home market

6. 4 well performing brands

1. High cost structure

2. Brand dilution

3. Bureaucratic culture

4. Car recalls

Opportunities Threats 1. Positive attitude towards “green” vehicles

2. Increasing fuel prices

3. Changing customer needs

4. Growth through acquisitions

1. Fluctuating fuel prices

2. New emission standards

3. Rising raw material prices

4. Intense competition

5. Exchange rates

Strengths

1. Global presence. GM was the leading auto manufacturer in terms of sales for 77 years until 2007. The company has

greatly grown its presence in the world and is now operating in 157 countries, while its Chevrolet brand reached world

record sales (4.95 million units).

2. New vision and strategy. After 2008 bailout, GM has experienced major changes and reorganized the way it does

business. New members were appointed to the firm’s management team with Daniel Akerson as the CEO. He shook

GM’s bureaucratic organizational culture and introduced new strategy and visions to the company. GM became smaller

but leaner and is becoming more cost competitive.

3. Strong brand portfolio. GM currently sells 18 automobile brands to satisfy as many customer needs as possible. The

most popular brands are Cadillac, Buick, GMC and Chevrolet that sell very well in USA and China. Chevrolet reached a

global sales record and sold 4.95 million units in 2012.

4. Strong presence in China. China is the largest automotive market and is an emerging economy that grows steadily. It

is also the second largest market for GM in terms of vehicle units sold. An early entrance into China, well performing

partnerships and local Buick brand are the main reasons why GM has a strong position in China’s automotive market.

5. Knowledge of home market. GM is the largest car manufacturer in US and currently holds more than 18% market

share. This is mainly due to extensive knowledge of US market and its consumers.

6. 4 well performing brands. GM’s Cadillac, GMC, Chevrolet and Buick are among the best-selling brands in US and

China and brings in more than 80% of all General Motors sales.

Weaknesses

1. High cost structure. GM has one of the highest cost structures compared to all automobiles manufacturers. GM’s

costs are driven by its generous employee compensation and pension plans. Although GM has reduced its cost after

2008 it still has a lot to do to become cost competitive.

2. Brand dilution. GM controls 18 automobile brands that vary in quality and are sold in separate markets. With so many

brands in sales, customers find it hard to identify which brand belongs to GM family, as only one of 18 brands carry GM

letters. The result is lower GM brand awareness.

3. Bureaucratic culture. Before reorganization in 2008, GM was infamous for its rigid culture and structure. Since then,

the company has made some cultural and structural changes but should continue improving as it isn’t as quick as its

competitors in reacting to constantly changing environment.

4. Car recalls. Last year, General Motors recalled 119,000 pickups due to missing hood latch. The same year it had to

recall it Chevrolet Volt and fix battery problems. Recalls are expensive and damages brand reputation, especially when

the company announces them so often.

Opportunities

1. Positive attitude towards “green” vehicles. Today consumers are more aware of the negative effects (air pollution)

caused by cars fueled by petrol and diesel. Large quantities of CO2 emissions intensify greenhouse effect and negatively

impact the life on earth. Thus, consumers are more likely to buy new hybrid and electric cars that emit less CO2.

2. Increasing fuel prices. Increasing fuel prices open up large markets for GM’s hybrid and electric cars as consumers

shift towards cheaper fuel types.

3. Changing customer needs. By introducing new car models, General Motors would be able to meet changing

customer needs for smaller and more fuel-efficient cars.

4. Growth through acquisitions. GM has successfully acquired many car companies in the past and should continue

doing so to gain new skills, assets and access to new markets.

Threats

1. Fluctuating fuel prices. Due to increasing extraction of shale gas, future fuel prices should drop and make electric

and hybrid cars less attractive. GM would treat the projects of hybrid and electric cars as losses, rather than perspective

future cars. On the other hand, steeping fuel prices would make current GM models less attractive to cost conscious

consumers, as they demand smaller cars that consume lower amounts of fuel.

2. New emission standards. A new wave for stricter regulations on vehicle emission standards may negatively affect

GM’s finances. The corporate would have to invest large amount of money to comply with these new standards.

3. Rising raw material prices. Rising prices for raw metals will lift the costs for auto manufacturers and result in

squeezed profits for the companies.

4. Intense competition. For 77 years from 1931 to 2007, GM led global sales of vehicles, but lost its position in 2008 due

to increased competition of cheaper and better quality cars, especially from Japan and South Korea.

5. Exchange rates. China is GM’s second largest market and the company earns huge profits there. Exchange rate

fluctuations threaten GM’s profits if the dollar would appreciate against Chinese renminbi.

Sources

1. New York Times (2013). General Motors. Available at:

http://topics.nytimes.com/top/news/business/companies/general_motors_corporation/index.html

2. The Economist (2013). Now it’s time to step on the gas. Available at: http://www.economist.com/news/business/21569712-gm-

has-emerged-stronger-crisis-it-not-yet-fast-lane-now-its-time-step

3. General Motors (2013). Investors: Corporate Strategy. Available at:

http://www.gm.com/company/investors/corporate-strategy.html

4. General Motors (2013). About GM. Available at: http://www.gm.com/company/investors.html

5. Wikipedia (2013). General Motors. Available at: http://en.wikipedia.org/wiki/General_Motors