General Motors Essay

A car for every purse and mean Alfred P Sloan Jr, Former President & CEO command aims. oecumenical Motors, mavin of the realitys grandst automakers, traces its roots back to 1908. With its world(a) headquarters in Detroit, GM employs 205,000 people in every major region of the world and does business in some 157 countries.GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GMs largest national market is the United States, followed by China, Brazil, Germany, the United Kingdom, Canada, and Italy. Company tarradiddle General Motors was founded on Wednesday, September 16, 1908, in Flint, Michigan, as a retentiveness company for Buick by William C. Durant. Durant started acquiring many companies like Oldsmobile, Cadillac, Cartercar, El more(prenominal), Ewing, Pontiac etc.Durant doomed control of GM in 1910 to a bankers trust, due to the large nub of debt (around $1 million) taken on in its acquisitions. Durant left the firm and co-founded the Chevrolet Motor Company in 1911 with Louis Chevrolet. After a brilliant stock vitiate back campaign, he returned to head GM in 1916. GM surpassed crossbreeding Motor Company in sales in the late twenties thanks to the attractorship of Alfred P. Sloan. Sloan was inventing new ways of managing a complex oecumenic organization, while paying special attention to consumer demands.Car buyers no long-dated wanted the cheapest and most basic model they wanted style, power, and prestige, which GM offered them. During the twenties and 1930s, General Motors assumed control of the Yellow Coach bus company, and helped gain Greyhound bus lines. They replaced intercity train transport with b employs. GM inescapably a adept of urgency regarding revising a strategic plan that incorporates the next geneproportionn of vehicles. In todays ball-shaped economy and highly agonistical auto persistence GM has no sentence to procrastinate. As stated,GM has vindicatory too untold at risk in not becoming an industry attracter in alternative can technology. Fuel-economy legislation is sparking the race. This is a critical time in auto industry with many threats, but opportunities as well. The next several years provide delineate GM. Vision disputation The GM vision is as follows GMs vision is to be the world leader in transportation products and related to services. GM allow earn our customers enthusiasm through continuous good driven by the integrity, teamwork, and innovation of GM people.The proposed new vision for GM is as follows For GM to produce the automotive industry leader in alternative fueled vehicles and providing superior quality products that global consumers call to take heed when they think of quality and innovation. My vision for GM is to be the industry leader in innovation, and w present all other industry con tention strives to imitate. Mission Statement The current GM mission statements are as follows Drive improvements in market tract, r pointue, brands, people, responsiveness, and cost effectiveness through the implementation of global coarse metrics and best practice sharing.The new proposed mission statement lead be as follows GM will constrain an industry leader, not a follower. To regain lost market share that was lost to unknown disputation, and once again be the auto industry leader in sales and market share in todays global market. Values Statement The auto industry just like the global economy is going through tremendous change, due to rising fuel prices, and surroundingsal worries, such(prenominal) as global warming. GM must use these threats as opportunities, and take advantage of changing consumer buying habits.GM needs to change consumer perception of the company, from a dull, poor quality, vehicles to innovative, quality, and environmentally friendly company. To d o this GM must portray an image that states that GM values what the consumer wants and what the environment needs. Listen to what consumers are saying directly and indirectly about GMs current products, and create innovative, green, vehicles that turn consumers into customers. At the same time provide GM stakeholders pride and financial incentives to remain with GM. Environmental analytic thinking GM and the entire auto industry are currently challenged with the completed storm.The auto industry is being dissipate by a promiscuous US and global economy, rising fuel prices, and social and political environmental concerns and issues. In order to overcome these electromotive force threat, GM should consider chaw producing a range of alternative fueled vehicles, i. e. fuel cell, electric, and hybrid. SWOT depth psychology Strengths 1. Large Market Share Although GMs market share in the US has dropped it is still very much competitive at 26 percent. They also strike an increasing share in the Chinese market. With the sound decisions there is no reason for GM to not become the automotive leader it once was. . Global Experience As explained in a higher place even with GMs youthful decline they still have the market share and the experience to bounce back. They have been a intercontinental company for nearly a century now and have schematic themselves as the global leader for most of them. If you recall I menti atomic number 53d preceding(prenominal) that a current opportunity for GM is to expand globally and as we can intoxicate they already have the experience to do so. It is just a matter of the correct planning and proper implementation of those plans that will decided whether or not GMs goals are achieved. 3. change of Brand NamesGM as I mentioned has been the automotive leader for the majority of the last century. A large reason for that is the wide miscellanea of quality brand names that appeal to all target markets. The current GM brands includ e 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 GMs most reliable character reference 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. Weaknesses 1. Behind on Alternative aught Movement This is GMs 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 passing play of market share and a decrease in company profit.In order for any automotive company to be successful from this c harge up forward they must be Hybrid friendly and fuel efficient. 2. uncatch Organizational Structure As we can see in show 1 of the case GMs organizational structure seems to be too vertically integrated. This causes a omit of communication between employees from lapse to bottom and may have played a part in GM falling behind on the alternative energy movement. 3. dead(a) Profitability Looking at GMs profit we see that they are certainly struggling with respect to the size of their company.Their profit bound 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 depen dent on its financing program.Granted it is a great strength for GM, but they once again cannot rely totally 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 GMs 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 dont see them getting denied based on their credit at this point, the seriousness of the matter is certainly apparent. Opportunities 1. Alternative Energy movementIt is obvious that GM was behind its competition with regards to the research and victimisation of hybrid vehicles. However hybrid technology is still very much new giving GM the opportunity to once again become the automotive industrys leader in innovation and technology. 2. move to Expand Globally. Recently GM saw an increase in the Chinese automotive market, which proves their needs to be more emphasis put on f oreign markets. If GM can infiltrate these markets and successfully grow along with their continuing focus on the US market they will be headed in a positive direction. . Low Interest Rates With the right marketing strategy the low interest rates have the potential to generate an immediate increase in sales. 4. Develop New fomite Styles and Models This is an opportunity that will never be satisfied, meaning that GM should of all time be attempting to develop the automotive worlds most best-selling(predicate) vehicles, and as we know, what is in today will be out tomorrow. Threats 1. salary increase Fuel Prices With GM being a large producer in both trucks and SUVs, sales have drastically decreased due to the lack of fuel efficiency.The rise in fuel prices has played a monumental role in creating the opportunity for development of both hybrid and more fuel efficient vehicles. As you will find with most threats, an equal opportunity will usually emerge as is the case here with GMs opportunity mentioned above. 2. Growth of Competitors GM no yearner has the luxury of being the known leader in the automotive industry and faces the reality that they are in serious trouble. As I mentioned foregoing Toyota took the first step in the direction of hybrid echnology and has since drastically big(p) and become the questionable automotive frontrunner to start the 21st century. 3. Pension Payouts. carve up of this threat is their own doing and the other is simply unavoidable. GM is responsible for providing too-generous pension benefits to its employees, which at the time seemed like a great idea, however they are now experiencing problems as more and more people start to collect. 4. Increased Health Care Costs GM, like many large companies with quality employee health care benefits, is experiencing a large financial hit that only gets worse as time continues. . Rising Supply Costs, i. e. brace Once again this threat affects the entire automotive industry and forces each company to cut manufacturing and production costs as much as possible, without taking away from the quality of the product. Core Competence The core competence of General Motors is innovation. This is the driving force behind its $190 above turnover. General Motors has been utilizing innovation in service ad technology to secure itself a dominant position in the automobile industry, since 1908.In 1911, it conceptualized, locomotiveered and commercialized the self-starter engine for the first time. Then in 1926, its product Cadillac was the pioneer in fashioning a nationwide service strategy. In 1996 General Motors introduced OnStar satellite technology which allows equipped vehicles to be tracked in case of an emergency or theft and allows the passengers to communicate with OnStar personnel. Other new car concepts include minicars such as Chevy Aveo. However in the case of hybrid vehicles, General Motors was unable to keep up to the pace of the market demand.