General Motors Company (GM) must address issues marked in this PESTEL/PESTLE analysis to sustain global business growth. The PESTEL/PESTLE Analysis tool provides information regarding the most significant external factors affecting the company’s remote or macro-environment. In General Motors’ case, such external analysis reveals a variety of opportunities and threats relevant in the automotive industry environment. For example, the company has opportunity to expand its market presence and operations in developing countries. General Motors must remain keen in exploiting opportunities for further growth and expansion in the global automobile market. Strategies must also address threats against GM’s global business performance. Moreover, stronger competitive advantages are essential, and corresponding efforts must align with General Motors’ generic strategy and intensive growth strategies. Such competitive advantage should support the company’s position as one of the biggest firms in the industry. This PESTEL/PESTLE analysis of General Motors Company helps identify business concerns and guide such endeavors for organizational development.
Strategic decision makers need to determine the most relevant issues in the remote or macro-environment of the business. A PESTEL/PESTLE analysis of General Motors enumerates some of the most significant of these issues or external factors in the various dimensions or aspects of the automotive industry. For example, the external analysis identifies political, economic, sociocultural, technological, ecological and legal (PESTEL/PESTLE) external factors that affect GM. Appropriate strategic action should facilitate General Motors’ competence and resilience in the global market for automobiles and related products.
Political Factors Affecting General Motors Company
This aspect of the PESTEL/PESTLE analysis enumerates the effects of political trends and conditions on the business performance of General Motors. In particular, the impact of governments and governmental programs and actions on automotive firms are of interest in this aspect. The following political external factors are relevant in the case of General Motors Company and its remote or macro-environment:
- Governmental promotion of public transport and other alternatives (threat)
- Aggressive tax policies on combustion-type automobiles (threat)
- Political stability in major markets (opportunity)
General Motors faces the threat of governmental promotion of public transport and other alternatives. For example, this external factor encourages people to use shared transportation, such as buses, trains, and vehicle-sharing programs, potentially reducing GM customers’ likelihood of purchasing automobiles. In addition, aggressive tax policies threaten General Motors through potential increases in taxes that reduce profits. Nonetheless, political stability in major markets presents growth opportunities in the remote or macro-environment. The political external factors in this aspect of the PESTEL/PESTLE analysis reveal notable threats that General Motors must include in its strategies.
Economic Factors Important to GM
General Motors’ business performance depends on economic conditions in the automobile markets where it operates. This aspect of the PESTEL/PESTLE analysis identifies the issues based on economic trends and the condition of economies relevant to the automotive firm’s remote or macro-environment. In General Motors’ case, the following economic external factors are significant in the automotive industry:
- High growth rate of developing markets (opportunity)
- Economic stability of major markets (opportunity)
- Rising competition in developing markets (threat)
The external factor of high growth rate of developing markets creates opportunities for General Motors to grow and expand in these areas. For example, the company can expand the GM dealership network in developing markets like India and Indonesia. Also, General Motors can expect minimal economic issues in major markets, based on their relative stability. However, despite growth opportunities in developing markets, the company must ensure competence to address rising competition with regional and local or domestic automotive firms. The conditions of the remote or macro-environment in this aspect of the PESTEL/PESTLE analysis indicate that General Motors can expect growth if it ensures competitive advantage.
Social/Sociocultural Factors Influencing GM’s Business Environment
The effects of social trends and conditions on the remote or macro-environment are considered in this aspect of the PESTEL/PESTLE analysis of General Motors Company. Sociocultural situations determine how consumers and employees influence the automotive industry. In this external analysis, the following sociocultural external factors significantly impact General Motors:
- Increasing demand for electric vehicles (opportunity)
- Increasing demand for self-driving vehicles (opportunity)
- Increasing demand for vehicle-sharing and ride-hailing programs (threat)
The automobile market is marked with increasing demand for electric vehicles. This external factor creates growth opportunities for General Motors through the development, manufacture and sale of electric vehicles under any of the GM brands. Similarly, the increasing demand for self-driving cars can promote growth through the sale of such cars from the company. On the other hand, the increasing demand for vehicle-sharing and ride-hailing programs is a threat against firms like General Motors. For example, ride-hailing programs improve people’s access to convenient transportation, corresponding to a potential decline in target customers’ likelihood of purchasing new automobiles from GM. This aspect of the PESTEL/PESTLE analysis emphasizes the importance of exploiting opportunities in the remote or macro-environment through innovation, which can be supported through General Motors’ organizational culture.
Technological Factors in General Motors’ Business
General Motors implements technologies for its operations and to develop competitive advantage in the automobile market. This aspect of the PESTEL/PESTLE analysis outlines how technological trends and conditions affect firms and the remote or macro-environment. The following technological external factors are notable in this external analysis of General Motors Company:
- Increasing implementation of self-driving vehicle technology (opportunity)
- Rising fuel efficiency in automobiles (opportunity)
- Increasing development of electric vehicles (opportunity)
There are considerable opportunities in this aspect of the external analysis, stressing the importance of value and technological breakthrough, which are included in General Motors’ vision statement and mission statement, respectively. For example, increasing implementation of self-driving vehicle technology creates opportunities for the company to provide competitive GM automobiles with such technology. General Motors can also benefit from the trend of rising fuel efficiency in automobiles. This external factor should prompt the company to develop advanced automobiles with competitive fuel-efficiency ratings. The strength of economies of scale shown in the SWOT analysis of General Motors can help support such endeavor. In relation, the remote or macro-environment presents opportunities for firms to develop electric vehicles, based on increasing demand in the market. Thus, this PESTEL/PESTLE analysis of General Motors points to opportunities through innovation and corresponding research and development (R&D) investment.
Ecological/Environmental Factors
The natural environment’s effects on firms’ remote or macro-environment are evaluated in this aspect of the PESTEL/PESTLE analysis of General Motors. Ecological trends and changes can affect supply chains, product usage and the availability of resources. In this regard, General Motors must address the following ecological external factors in the automotive industry:
- Changes in climate patterns (opportunity)
- Rising concerns on the air quality effects of automotive emissions (opportunity)
- Rising interest in business sustainability (opportunity)
General Motors has opportunity to develop automotive solutions that solve people’s transportation problems linked to the external factor of the changes in climate patterns. In a similar way, GM has opportunity to enhance its electric or hybrid automobiles to address rising concerns on the air quality effects of automotive emissions. Also, the company can further improve its sustainability standing, corporate image and brand image, based on the rising interest in business sustainability. For example, sustainability improvement agrees with General Motors’ corporate social responsibility strategy and satisfies stakeholders’ interests and expectations. Based on this aspect of the PESTEL/PESTLE analysis, the remote or macro-environment presents opportunities for General Motors to improve its performance in addressing ecological concerns.
Legal Factors Relevant to General Motors
This aspect of the PESTEL/PESTLE analysis determines how legal systems influence General Motors and the automotive industry. Laws and regulations impose requirements and limits on businesses, thereby defining the opportunities and threats in the remote or macro-environment. The following legal external factors are remarkable in this external analysis of General Motors Company:
- Expanding regulations on automobile safety (opportunity)
- Stricter emissions regulations (opportunity)
- Expanding environmental regulations (opportunity)
Expanding regulations on automobile safety is an opportunity for General Motors’ product development. In relation, this external analysis points to stricter emissions regulations as opportunity for the company to improve its products. For example, integrating new and emerging safety regulations in product design ensures compliance and boosts the value of General Motors’ brands. Moreover, the company should see opportunity in expanding environmental regulations. Based on this external factor, General Motors can intensify its efforts for business sustainability, supply chain sustainability, and end-of-life considerations in product design, among other factors. Such efforts can boost GM’s corporate image amid issues in its remote or macro-environment. Thus, General Motors has major regulations-based growth opportunities, as determined in this aspect of the PESTEL/PESTLE analysis.
Summary & Recommendations – PESTEL/PESTLE Analysis of General Motors Company
The external factors in General Motors’ remote or macro-environment identify many opportunities to grow the automotive business. For example, the company can grow based on product development and innovation. This PESTEL/PESTLE analysis also indicates the importance of reform in General Motors’ growth and expansion strategies in the global market. Such strategies should address the opportunities linked to the rapid growth rate of developing countries.
In addition, the external analysis shows the variety of issues that General Motors deals with. For example, the company faces the threat of regulations and consumer concerns regarding automobile emissions. However, the external factor of rising competition in developing markets stands as one of the most significant threats in GM’s remote or macro-environment. Based on the results of this PESTEL/PESTLE of General Motors, the following are the applicable recommendations for the business:
- Increase R&D investment to support product development and enhancement, especially to address demand for electric and hybrid vehicles.
- Expand the dealership network in developing countries to exploit high growth potential in these markets.
- Improve sustainability programs to address environmental concerns and related issues, and to strengthen General Motors’ corporate image and brand image.
References
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