General Motors Organizational Change: SWOT Analysis

General Motors, a company based in the United States, was pioneered in 1908 in Michigan State. Since its inception, General Motors has gained overwhelming influence to vehicle owners in the United States and around the globe. Over the years, its influence has been evidenced by high sales of their products in addition to market dominance in the motor vehicle industry over other companies. Since 1908, General Motors has reached a level where its work has spread to foreign countries. Moreover, its employee population has been on a constant increase since its onset. In turn, this analysis shows that the company has been extensively successful in this field. However, as much as the company has its strengths in various ways, it also has its weaknesses, opportunities and threats.

Strengths

One of the key strengths that General Motors possesses is having a vast market share. Its greatest advantage was setting up work within the United States at a time when production of vehicles in the country was minimal. Since its outset until 2007, General Motors Company had been the prevailing company in selling vehicles in the United States. However, competition has been growing within the region following the establishment of other vehicle production companies. This has seen its market share drop in the United States, but it is still leading in terms of selling most vehicles. The company has also obtained a lion’s share within the world market. Although the competition is high, both locally and on an international platform, it has been able to stay afloat among the leading companies in the world of selling vehicles.

Having different brands is yet another strength that the company owns over its counterparts. General Motors Company boasts of having different popular vehicle brands that many prefer over other companies’ vehicles. These brands are inclusive of Chevrolet, Cadillac, Saturn, Hummer, GMC, and Opel among others. The popularity of these brands has extremely grown within the local and international markets. Consequently, this popularity has led to an increased sale of vehicles from the company. Such incredible sales have put General Motors ahead of its competitors in terms of success (Jurevicius, 2013).

General Motors has also gained international recognition, which is another vital strength that the company displays. This has exposed the company to many customers and increased their revenue. Pioneering the company during the early years gave the company an opportunity to exploit the market and learn the trade early enough before its competitors could take such a step. Hence, General Motors gained adequate knowledge of the home and international markets ahead of their competitors (Jurevicius, 2013). The Asian market has always been a spectacular field where they readily accept General Motors’ products. Therefore, General Motors bears this additional strength over other companies in the same field of business.

Weaknesses

Since the year 2007, General Motors Company has faced challenging moments, such as an increased number of competitors. One of the leading challenges the company faced included running low on liquidity value. Low sales at the company are to blame for the decrement in liquidity following the accretion of competitors. The company started facing losses that affected the research and development sector negatively. In turn, production of outstanding vehicles became a slow process. This gave competitors an opportunity to catch up on the progress that General Motors had made over the years (Jurevicius, 2013).

Unfortunately, General Motors has always neglected alternative sources of energy for their vehicles. Other leading companies have taken the initiative to implement hybrid technology capabilities on their vehicles. Ignoring the change in alternative energy sources negatively affects General Motors in various ways. For example, the market share has reduced with the competitors taking up customers who prefer using alternative energy other than conventional sources. Losing customers has led to another negative impact, which is profit reduction within General Motors Company (Jurevicius, 2013).

General Motors has also been forced to make vehicle recalls. For instance, in 1998, they recalled several vehicles because the finished products were missing vital parts. Indeed, this is a good gesture and a proper aftersales service, but it was harming the company’s profitability (Jurevicius, 2013). Recalls are a great expense to the company but they have to be done. Such immense expenses are a weakness that General Motors displayed in its work.

Opportunities

In the mid-2000s, General Motors Company started becoming a favorite source of vehicles for several Asian citizens. Vehicle demand within China and India has grown tremendously. This has turned out to be an excellent chance for General Motors to sell their vehicles to people who prefer their products to other companies’ vehicles. The truck market is on an increasing trend and General Motors has seized this chance since their products are inclusive of trucks. General Motors has the tendency to produce new models, which many people prefer purchasing. Thus, they are able to cater to the different customers’ tastes in the market (Jurevicius, 2013).

Threats

China and India are among the General Motors’ largest markets in the East. However, fluctuation of exchange rate between the US dollar and these countries’ currencies may threaten the company’s profitability. The overdependence of General Motors on the American market is also a threat to the success of the company. Competition in the vehicle market within the United States is becoming tighter. General Motors faces the threat of low sales because of overdependence in the American market (Jurevicius, 2013).

General Motors Internal Change

In 1999, General Motors made an abrupt change in the management sector within the company’s American region. A new board of directors was put in place to oversee better decision-making on behalf of the company’s stakeholders. Their main task was to replace the CEO with a suitable one who could facilitate the company’s output and profitability. The change was radical and at the same time influential to the company’s main office. The new CEOs in the company’s major office were young and one of them was a female. Since the inception of the company in the early 1900s, there was never a female CEO. Evidently, this decision was for the best of the company since after that, the company started doing well financially.

The company also took additional measures in terms of internal financial reporting. This action included advancing initiatives that had been pioneered a while back with an aim of addressing material weakness within the company. General Motors Company also made drastic changes within its research and development section. The main point of having an efficient research and development division is to keep abreast with technological changes with the rest of the world. Hence, General Motors leverages the internal research and development group and GM ventures. The leading purpose of the company is to enhance their products and come up with unique vehicles. The developments gained by the company include automotive clean-tech, having advanced materials, encompassing processors, memory and sensors in vehicles. Consequently, the changes led to manufacturing of vehicles that met the customer’s demands.

General Motors External Change

General Motors looks out to reduce legacy cost by having talks with United Auto Workers. Thus, the company made this change with the aim of maximizing their profits. Forecasts are crucial in all business settings and may be inaccurate or close to the real measures. General Motors Company involves itself in making predictions related to the economic GDP and oil prices. These forecasts are inclusive of external changes that the company faces in its operations. These forecasts are not precise and may differ or agree with real measures (General Motors, 2013).
General Motors Company experienced tough financial moments during the 2009 financial year. By the end of that year, it was bankrupt for various reasons. One of the leading reasons behind its bankruptcy was poor designs of its vehicles in comparison to the competitors’ products.

Lack of focus on the main issue that was causing profit reduction was yet another cause of the company’s failure. The key problem facing the company was focusing on the financial gains rather than coming up with better vehicles. It was during that time that President Barrack Obama decided to salvage the company. General Motor’s failure affected several people, including its employees. Thus, the president saw it fit to come to its aid since the fall of the company would also have a negative impact on the country’s economy (General Motors, 2013). Consequently, he channeled huge loans towards the company. This provided the company with adequate working capital, which led to hefty profit gains in the following years. In addition, the company also increased its worker’s population and consequently, improved the country’s economy.

References

General Motors, (2013). About GM. Retrieved on 10 August, 2013 from http://www.gm.com/company/aboutGM.html
Jurevicius, O., (2013). SWOT analysis of General Motors. Strategic Management Insight. Retrieved on 10 August, 2013 from http://www.strategicmanagementinsight.com/swot-analyses/general-motors-swot-analysis.html