Gm Swot Analysis

Only available on StudyMode
  • Download(s) : 493
  • Published : April 27, 2013
Open Document
Text Preview
GM SWOT Analysis:

1. Large Market Share
Although GM's market share in the US has dropped it is still very much competitive at 26 percent. They also have an increasing share in the Chinese market. With the right decisions there is no reason for GM to not become the automotive leader it once was.

2. Global Experience
As explained above even with GM's recent decline they still have the market share and the experience to bounce back. They have been a worldwide company for nearly a century now and have established themselves as the global leader for most of them. If you recall I mentioned above that a current opportunity for GM is to expand globally and as we can see they already have the experience to do so.

3. Variety of Brand Names
GM as I mentioned has been the automotive leader for the majority of the last century. A large reason for that is the wide variety of quality brand names that appeal to all target markets. The current GM brands include: Chevrolet, GMC, Cadillac, Buick, Pontiac, Saturn, Hummer, Saab, Daewoo, Opel, and Holden.

4. GMAC Customer Financing Program
Since its establishment in 1919
it has proven to be GM's most reliable source of revenue.

5. OnStar Satellite Technology
Developed in 1996 OnStar currently has over 3 million subscribers and is standard on all GM vehicles. This technology allows the vehicles to be tracked in the event of an emergency or theft. It also allows the driver and or passengers the ability to communicate with OnStar personnel at the click of a button.

1. Behind on Alternative Energy Movement
This is GM's biggest weakness. The alternative energy/hybrid trend has begun to take place in the automotive industry and GM has been one step behind the competition in terms of alternative energy vehicles. This has led to many problems including loss of market share and a decrease in company profit. In order for any automotive company to be successful from this point forward they must be Hybrid friendly and fuel efficient.

2. Poor Organizational Structure
As we can see in exhibit 1 of the case GM's organizational structure seems to be too vertically integrated. This causes a lack of communication between employees from top to bottom and may have played a part in GM falling behind on the alternative energy movement.

3. Stagnant Profitability
Looking at GM's profit we see that they are certainly struggling with respect to the size of their company. Their profit margin was about 1.5% and the ROE has dramatically decreased over the recent years dropping to 10% in 2004. This is a situation that shareholders will not be pleased with.

4. Overly Dependent on US market
GM has become too dependent on the US market and must take advantage of the opportunity to expand globally. The competition is becoming too strong to focus on just one country.

5. Overly Dependent on General Motors Acceptance Corporation (GMAC) Financing GM has become too dependent on its financing program. Granted it is a great strength for GM, however they once again cannot rely solely on financing in order to turn profit, especially if they want to compete with Honda and Toyota who are rapidly growing.

6. Poor Credit Status
GM's credit status has like everything else has been steadily declining. Their current ratio is just barely above 1 and their acid test is even lower. Although, I don't see them getting denied based on their credit at this point, the seriousness of the matter is certainly apparent.

1. Alternative Energy Movement
It is obvious that GM was behind its competition with regards to the research and development of hybrid vehicles. However hybrid technology is still very much new giving GM the opportunity to once again become the automotive industry's leader in innovation and technology.

2. Continuing to Expand Globally.
Recently GM saw an increase in the Chinese automotive market, which proves their needs to be more emphasis put on...
tracking img