GM SWOT Analysis

Founded in 1910, General Motors is one of the largest and highly valued cars, trucks and automobile manufactures in the United States with a vision to design, build, and sell the world’s best vehicles. General Motors is a company that has significant impact on our U.S. economy. As I do a SWOT analysis on General Motors I will evaluate the company’s strengths, weaknesses, opportunities, and threats, to gain perspective on GM and there future as a company.

STRENGTHS: Product Branding. First and foremost, General Motors has produced and branded a variety of automobiles both international and region specific such as Chevrolet, Buick, GMC, Cadillac, Baojun, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling which for some have become household names. From electric and mini-cars to heavy-duty full-size trucks, monocabs, and convertibles, General Motor’s dynamic brands offer a comprehensive range of vehicles in more than 120 countries around the world (About GM).

Global Presence. Another strength GM shares, is their global presence, with factories in Brazil, Russia, India, and China (collectively BRIC) along with having assembly, manufacturing, distribution, office, and warehousing operations in 55 other countries. Of those BRIC factories, GM has the strongest presence in China due to their emerging economy that continues to grow gradually.

China also has the largest automotive market, Brazil coming in fifth and 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 (Jurevicius).

WEAKNESSES: Vehicle recalls. This year alone, General Motors has recalled 3.1 million cars and trucks. That’s more cars and trucks recalled in the U.S. this year than GM has sold in America in the five years since it’s filed for bankruptcy in 2009 (CNN). 2.6 million alone are due to faulty ignition switches which have been linked to many reportable accidents and 13 deaths.

Other recalls include battery problems, the separation of safety lap belt cables, and partial air bag deployment. These recalls are not only expensive but can damage GM’s brand reputation and make them vulnerable to competition.

High Cost Structure. According to Dan Akerson, retired chief executive officer of General Motors. GM has the strength to succeed, but needs to maintain certain changes such as competitive labor cost structures. When comparing GM to their competitive manufacturers GM currently has the highest cost structure.

OPPORTUNITES: Growth Potential in the BRIC Markets. The emerging BRIC markets are projected to grow by nearly 12 million vehicles from 2010 to 2015 as robust economies and increased personal wealth drive demand (GM’s Annual Report). New Focus and Strategy. General motors have appointed a new Chief Executive Officer Mary Barra, the first women ever to become CEO of a car company. In her first weeks as CEO, she is facing this recall crisis head on. Allowing the grieving families who had lost loved ones to be heard wanted to make it known that GM is listening and cares.

This painful crisis will allow for new opportunities and culture changes at GM. But, to restore the company’s reputation will take time. Since GM continues to do well in China and the U.S, Barra’s plan is to take profits from those markets to restructure investments necessary to grow successfully in other parts of the world. Rather than try to compete with irrelevant products, executive vice president Stefan Jacoby will work on tailoring GMs products by country to meet consumer demand.

Quality over Quantity. GM has an opportunity to match their competition. If only they invest more time in research and development instead of quantity over quality. By cutting out brands that don’t sell well and embrace the new trends will put General Motors at a higher advantage over their competitors.

THREATS: Fluctuating Fuel Prices. Due to global recessions and fluctuating fuel prices less fuel efficient cars, trucks, and sport utility vehicles are being sold to cost conscious consumers. By putting more focus on building eco-friendly vehicles such as hybrids or plug in electric cars, demand for GMs products will rise and boost sales.

In conclusion, when comparing GMs strengths, weaknesses, opportunities, and threats, the good weights out the bad. As I stated earlier, GM is one of the largest and highly valued automobile manufactures in the U.S. Losing them would be a detriment to our economy. They will rise over the recalls and come out on top.