Q2) : What information is provided and how can this be useful in understanding your chosen company’s strategic situation?
The profile covers many different areas that pertain to the strategy of the General Motors ranging from history to a swot anaylsis.
History- the history of the firm will allow us to study how General Motors has acted to fulfill its mission in the past and thus give us clues to their future decisions. The history section of the profile basically lists all of the investments and divestment of GM since its inception in 1909. The list is too long to put into this case, but the lists shows that GM is not by any means strictly a car company. The list also shows that General Motors has been an international company for over 90 years. So strategically speaking GM is mildly protected from some shocks, but as we saw in 2009, they are not protected from very large global shocks to the automobile industry.
Products and Services- The report also lists the car types of cars (12) and brands (11) they produce. Along with the finished automobiles they are actively involved in the inputs that are necessary for the production of the automobiles. They also provide a financial service for the automobiles. Revenue analysis- The revenue analysis section states the revenue figures for the company from the last two years also showing the percent increase. The section also breaks down these figures into different business segments such as GM North American and GM Asia. These more detailed figures can be used in conjunction with market share and growth of entire market to form a strategy plan for the company. For example if South America’s market is largely made up of local brands and growing at a very fast rate, it would be more beneficial for GM to concentrate their production and capital there instead of a saturated market like that of the United States. SWOT- This section included the most information from a strategic stand point. It includes strengths and weaknesses as well as opportunities and threats. An example of the firms strengths would be “strong market position and brand portfolio”. A weakness would be “underfunded pension funds”. Strengths and weaknesses are characteristics of the firm as opposed to opportunities and threats which are characteristics of the firm’s environment. One of GM’s opportunities is “increased demand for cars in BRIC nations”, and one of their threats is “intense competition”. The SWOT framework is used ideally to strategically take advantage of a firms opportunity with their strengths. For example, GM should use their strong brand image and profits from strong market positions around the world to fund a stronger entrance into Brazil, Russia, India, and China. Also the converse of that strategy would be to avoid weaknesses and threats to the firm.
Q3): Based on the information provided, what are the three most important things you can say
about your company’s industry?
1) The effect of the financial crisis on the American Automobile market. Obviously the crisis had a major effect on the automotive market, but the effect is underestimated in the news. According to the industry report in the business source complete database the amount of passenger vehicle decreased by six million units from 2006 to 2009, so even if the saturation level of the market is at the 2006 level which is very unlikely since the population has grown since then, the U.S. market has not reached the pre-crisis levels saturation. These levels paired with renewed customer confidence and the ease of attaining credit will fuel an increase in the U.S. automobile market. Although the increase may be gradual, it is still a realistic goal for an established brand such as GM.
2) The emergence of China as the largest automobile market in the world. As a result of increasing incomes paired with sales incentive and decreased tariffs caused by China joining the WTO has resulted in a booming...
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