General Motors Company (GM) addresses issues enumerated in this PESTEL/PESTLE analysis to sustain global business growth. The PESTLE/PESTEL analysis tool provides information regarding external factors affecting the company’s remote or macro-environment. In General Motors’ case, this external analysis reveals opportunities and threats in the automotive industry environment. For example, the company has opportunities to expand its market presence and operations. This PESTLE analysis shows that General Motors must remain keen on exploiting opportunities for further growth and expansion in the global automobile market. Strategies must address threats to GM’s global business. Stronger competitive advantages and corresponding efforts must align with General Motors’ generic competitive strategy and intensive growth strategies. Competitive advantages support the company’s position as one of the biggest automakers. This PESTEL analysis of General Motors Company identifies business concerns and guides endeavors for organizational development.
Strategic decisions account for issues in the remote or macro-environment of the automotive business. This PESTLE analysis of General Motors enumerates some of the most significant of these issues or external factors in the industry. The PESTEL 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 mobility products.
Political Factors Affecting General Motors
This aspect of the PESTEL/PESTLE analysis enumerates political trends and conditions that affect the business performance of General Motors. The impact of governments and governmental programs and actions on automotive firms are of interest. The following political factors are relevant to General Motors Company:
- 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. 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, this PESTEL analysis points to aggressive tax policies threatening 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 factors in this aspect of the PESTLE analysis reveal notable threats that General Motors must include in its strategies.
Economic Factors Important to GM
General Motors’ business depends on economic conditions in automobile markets. This aspect of the PESTLE/PESTEL analysis identifies issues based on economic trends and conditions relevant to the automotive business. In General Motors’ case, the following economic 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 the high growth rate of developing markets creates opportunities for General Motors to grow and expand in these areas. For example, the GM dealership network can grow in developing markets. Also, in this PESTEL analysis context, General Motors can expect minimal economic issues in major markets, based on their relative economic stability. However, with growth opportunities in developing markets, the company must ensure competence to address rising competition with other automotive firms, like Tesla, Toyota, and Ford. The conditions of the remote or macro-environment in this aspect of the PESTLE analysis indicate that General Motors can expect growth if it ensures its competitive advantages.
Social/Sociocultural Factors Influencing GM’s Business Environment
The effects of social trends and conditions are considered in this aspect of the PESTEL/PESTLE analysis of General Motors Company. Sociocultural situations determine how buyers and employees influence the automotive industry. In this external analysis, the following sociocultural factors influence 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 involves increasing demand for electric vehicles. In the PESTEL analysis context, this external factor creates growth opportunities for General Motors through the development, manufacture, and sale of electric vehicles under GM brands. Similarly, the increasing demand for self-driving cars promotes sales growth. On the other hand, the increasing demand for vehicle-sharing and ride-hailing programs is a threat to General Motors. Ride-hailing programs improve people’s access to convenient transportation, corresponding to a potential decline in target customers’ likelihood of purchasing GM automobiles. This aspect of the 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 (corporate culture).
Technological Factors in General Motors’ Business
General Motors implements technologies for its operations to develop competitive advantages in the automobile market. This aspect of the PESTLE/PESTEL analysis outlines technological trends and conditions that affect automakers. The following technological 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 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. For example, the increasing implementation of self-driving vehicle technology creates opportunities for GM to provide competitive self-driving cars. General Motors can also benefit from the trend of rising fuel efficiency relevant to this PESTEL analysis. This external factor prompts the company to develop advanced automobiles with competitive fuel-efficiency ratings. The business strength of economies of scale shown in the SWOT analysis of General Motors can support such an endeavor. Furthermore, the remote or macro-environment presents opportunities for firms to develop electric vehicles, based on increasing market demand. Thus, this 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 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. General Motors must address the following ecological 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 an 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 an opportunity to enhance its electric or hybrid automobiles to address rising concerns on the air quality effects of automotive industry emissions. Also, in this PESTEL analysis context, the company can improve its sustainability standing, corporate image, and brand image, based on the rising interest in business sustainability. Sustainability improvement agrees with General Motors’ corporate social responsibility strategy and satisfies stakeholders’ interests and expectations. Based on this aspect of the 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 PESTLE/PESTEL 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 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. Also, this external analysis points to stricter emissions regulations as an opportunity for the company to improve its products. For example, integrating new and emerging safety regulations into product design ensures compliance and boosts the value of General Motors’ brands. Moreover, this PESTEL analysis points to the company’s opportunity to improve its business through compliance with 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. 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 PESTLE analysis.
Summary & Recommendations – PESTLE/PESTEL Analysis of General Motors Company
The external factors in General Motors’ remote or macro-environment identify many opportunities to grow the automotive business. 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. These strategies should address the opportunities linked to the rapid growth rate of developing countries.
This PESTEL 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 PESTLE analysis 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 the 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
- General Motors Company – Form 10-K.
- General Motors Company – Path to Autonomous.
- General Motors Company Sustainability – Governance.
- Lampón, J. F., & Muñoz-Dueñas, P. (2023). Are sustainable mobility firms reshaping the traditional relationships in the automotive industry value chain? Journal of Cleaner Production, 413, 137522.
- Phan, S. (2021). The effect of PESTLE factors on development of e-commerce. International Journal of Data and Network Science, 5(1), 37-42.
- U.S. Department of Commerce – International Trade Administration – Automotive Industry.