General Motors Company’s industry position is a result of efforts to address opportunities and threats, such as the ones shown in this SWOT analysis. The SWOT analysis is a model or tool that managers use to identify the most significant internal strategic factors (strengths and weaknesses) and external strategic factors (opportunities and threats). The case of General Motors points to business strengths and weaknesses that determine capabilities in addressing issues and challenges in the automotive industry. For example, the company’s organizational size and network reach support strategic implementation. However, General Motors must address issues related to competition and business bureaucracy. Decision makers must consider the SWOT (strengths, weaknesses, opportunities, and threats) factors to ensure proper fit between strategies and GM’s actual business conditions. Such fit facilitates streamlining, effectiveness, and the minimization of success barriers in strategic implementation. Thus, it is essential that General Motors address the internal and external strategic factors facing its business.
A SWOT analysis of General Motors Company stresses the importance of appropriate strategies to maximize the benefits of business strengths in overcoming weaknesses, exploiting opportunities, and addressing threats. GM is in a strong position to maintain its major position in the automobile market. For example, strong brands help ensure the company’s competitive advantage despite rising competition from large automobile manufacturers like Toyota (Read: SWOT Analysis of Toyota Motor Corporation). However, considering market dynamics and changes in the industry, General Motors must optimize its position. Optimization is key in keeping the company’s position in the global industry. General Motors needs to address the strategic factors determined in this SWOT analysis of the business.
General Motors’ Strengths (Internal Strategic Factors)
This aspect of the SWOT analysis enumerates the internal strategic factors that support General Motors’ growth and development. These factors include organizational capabilities and potential in strategic implementation to address issues and opportunities in the global automotive business. General Motors Company has the following notable strengths:
- Economies of scale
- Strong brands
- Human resource expertise
Economies of scale contribute to the effective implementation of General Motors’ generic strategy and intensive growth strategies. This strength also empowers the company to maintain competitive advantage based on extent of market reach and production capacity to address market demand. On the other hand, strong brands are a strength that supports General Motors’ competitiveness in terms of customer loyalty and the attractiveness of its automobiles. For example, customers are more likely to have a positive response to GM products compared to relatively unknown new brands. General Motors also has human resource expertise based on the company’s long history of automobile development and manufacture. This strength facilitates the development of new products that can directly compete against automobiles from other large firms, such as Tesla (Read: SWOT Analysis of Tesla Motors, Inc.). In this aspect of the SWOT analysis of General Motors, business strengths sustain the company’s capabilities as a major competitor in the automotive industry.
GM’s Weaknesses (Internal Strategic Factors)
The internal strategic factors that lessen General Motors Company’s organizational growth and development are considered in this aspect of the SWOT analysis. Some of these factors are organizational characteristics that limit employee contributions to the performance of the automotive business. In this case, General Motors has the following weaknesses:
- Bureaucracy in organizational culture and structure
- Limited market presence in developing countries
- Limited business diversification
Bureaucracy is a major weakness that General Motors’ organizational culture currently aims to address. Such bureaucracy is responsible for limitations in the company’s flexibility in responding to issues in the external environment. Although this bureaucracy is also based on General Motors’ organizational structure, top managers consider culture as a primary means of addressing the matter. On the other hand, limited presence in developing countries is a weakness that affects the company’s potential growth in these markets. For example, General Motors offers only Chevrolet automobiles in India. Also, there are no Cadillac automobiles in Argentina and Brazil. Moreover, General Motors suffers from limited business diversification. The company has only two main businesses – its automotive business and GM Financial, a financial services business. Limited diversification exposes the company to greater market-based risks. This aspect of the SWOT analysis shows that General Motors’ potential global growth is hindered by its weaknesses.
Opportunities for General Motors Company (External Strategic Factors)
In this aspect of the SWOT analysis, external strategic factors that support General Motors’ business growth and development are identified. These factors can pave the way for the company to improve its profits and position in the automobile market. The following opportunities are significant in the case of General Motors:
- Reduction of bureaucracy in the organizational structure and culture
- Expansion of market presence in developing countries
- Integration of advanced computing technologies in products
General Motors has the opportunity to reduce bureaucracy in its organization. Considering that bureaucracy is one of the company’s weaknesses, exploiting this opportunity can help in enhancing GM’s organizational competencies. Another opportunity is to increase General Motors’ market presence in developing countries. For example, the company can offer products other than Chevrolet automobiles in developing countries, as a way of increasing revenues. Integration of advanced computing technologies in automobiles is an opportunity that can improve General Motors’ competitive advantage. Automobile manufacturers’ efforts for rapid innovation make this opportunity significant. Based on this aspect of the SWOT Analysis of General Motors Company, there are significant opportunities for major growth in the international market.
Threats Facing GM (External Strategic Factors)
External strategic factors that tend to diminish General Motors’ business performance are considered in this aspect of the SWOT analysis. These factors are based on industry or market conditions that have unfavorable effects on the firm. General Motors faces the following threats in the automotive industry:
- High level of competition
- Disruptive potential of new technologies
- Governmental promotion of public transport and other alternatives
The automotive industry has a high level of competitive rivalry (Read: Porter’s Five Forces Analysis of General Motors Company). This situation threatens the company’s business performance. For example, competitors impose pressure on General Motors and its market share. Another threat against GM is the disruptive potential of new and emerging technologies. Apple, Google and other firms are developing technologies that can disrupt the industry. General Motors also faces governmental promotion of public transport and other alternatives. This factor counteracts the growth of automotive companies. The threats in this aspect of the SWOT analysis point to the importance of developing competitive advantage to protect General Motors’ business and its long-term development.
Summary & Recommendations – SWOT Analysis of General Motors Company
This SWOT analysis indicates the capabilities of General Motors. The company is in a strong position in the automotive industry. For example, economies of scale, strong brands, and human resource expertise are major strengths that empower the company and its competitive advantage. General Motors can use these strengths to ensure positive business performance despite organizational weaknesses. These strengths can also address some of the threats and opportunities, such as competitive rivalry and expansion of market presence, respectively.
General Motors, however, needs to implement strategic reform for business resilience. Such reform must address the company’s weaknesses and threats, and exploit the opportunities available in the automotive industry. For example, an aggressive GM dealership strategy can expand the company’s global market presence. Based on the most significant internal and external strategic factors in this SWOT Analysis of General Motors, the following recommendations are appropriate:
- Continue reforming the organizational culture to address the issue of bureaucracy
- Grow the dealership network to expand GM’s market presence in developing countries
- Increase GM’s rate of innovation to improve competitiveness and protect the business from potential disruption in the automotive
References
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