Changing Strategy of General Motors

Topics: Automotive industry, General Motors, Opel Pages: 2 (530 words) Published: February 27, 2013
INTERNATIONAL BUSINESS CASE STUDY
THE CHANGING STRATEGY OF GENERAL MOTORS

General Motors Company, commonly known as GM (listed General Motors Corporation before 2009), is an American multinational automotive corporation headquartered in Detroit, Michigan, and the world's largest automaker, by vehicle unit sales, in 2011.Earlier GM used to dump their old and unsold models into developing countries and they used to neglect markets in developing nations thinking that they are not profitable, and also they don’t have any R&D centres outside Detroit, US. So there is no way of new innovative models entering into developing markets. But now they slowly started penetrating developing nation markets by introducing their new models in those markets as there are huge untapped potential customers.

Automotive Industry Analysis using porter’s five forces model: 1) Threat of New Entrants:
The threat of new entrants is very low in the automobile industry. The industry is very mature and it has successfully reached economies of scale. In order to compete in this industry a manufacturer must be able to achieve economies of scale. 2) Threat of Substitute Products:

There are no direct substitutes for automobiles.
3) Bargaining Power of Suppliers:
The bargaining power of suppliers is very low in the automobile industry. There are so many parts that are used to produce an automobile, that it takes many suppliers to accomplish this. When there are many suppliers in an industry, they do not have much power. 4) Bargaining Power of Buyers:

The bargaining power of the buyers is moderately high. The buyers being consumers purchase almost all of the industries output. The manufacturers depend on them to stay in business. The buyers also are a significant portion of the industries revenue. If they cannot keep their buyers happy then they risk losing them to their competitors. 5) Competition among rivalries:

Rivalry among the competitors is very strong in...
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