General Motors Facing Strategic Challenges

Table of Contents

Problem identification1

Strategic analysis2

SWOT2

Strengths2

Weaknesses2

Opportunities2

Threats2

Porter's Five Forces3

Threat of New Entrants3

Bargaining power of customer3

Threat of Substitute3

Bargaining power of Suppliers4

Solutions and Recommendations4

References5

General Motors Facing Strategic Challenges

Problem identification

General Motors is a United States based multinational automotive firm. The company has recently gained back the title of world's largest automobile maker from the Toyota Company (Hirsch, 2012). The analysts in the industry make comments on the GM position that, being largest is not always an enviable position. Thilo Koslowski from Gartner Inc. remarks that, being healthiest is important not being the largest (Hirsch, 2012). There was a time when GM was globally dominating automobile production but the company was selling at loss just to keep the production line running and fulfilling the contracts with employees. GM is presently facing difficulty in developing products that are competitive in the US market. Moreover, GM shares have lost 49% of its value relative to Dow. GM is facing problems, however, its large customer base and strong government support is keeping the company on its feet.

An example of how the company is losing this war, is the Malibu from GM as a car for D-Segment market. Toyota Camry, Volkswagen Passat and Honda Accord give tough competition in this segment. US are the GM's home market and the D-Segment represents the largest volume single vehicle class in that market. The completion in this segment is vital for health of automobile companies (Woodhill, 2012).

The worst case is that, Malibu replaced Chevy Malibu, and is proving to be performing inferior to the later. The Volkswagen Passat is superior to Malibu. Malibu is clearly missing the customer focus in its strategy. All the companies are trying to create longer cars so that, passengers find room to stretch legs, Passat has roomiest back seats in D-Segment, while the Malibu has shorten its length of car by 4 to 5 inches (Woodhill, 2012).

Strategic analysis

SWOT

Strengths

Global recognition and presence of brand and manufacturing plants. The company carries more than 200,000 employees and distribution network in 50 countries with running business in approximately 15 countries. Also, GM diversifies its business portfolio by investing in Bonds, and market securities.

Weaknesses

Lacking concentration on processes to increase or even stabilize their market share. Dull lineup of company's products is making difficult to complete the lead sales. Company is constantly losing market share. Moreover, the intense promotion strategy of its low mileage SUVs is creating marketing expenses to ...