General Motors External Environment

Describe how current economic, legal, and regulatory factors affect the firm’s marketing performance. Economic: To commence with the economic factors, the whole continent was going through recession in the year 2008 and everybody, right from customers to the raw material suppliers were curtailing there expenses which just made the condition more suffering. This also left a deep impact on the macro-environment which resulted in unemployment. As an automobile industry, besides being a merchandiser, GM group is also a major consumer of various metals, textile, rubber, plastic, vinyl and computer chips.

When the business cycle is at the stage of recession known as recovery, it becomes even difficult for the potential customers to keep up with the routine purchasing habits. This means that the customers purchase only the things which are economical and are of absolute importance. The new protocols imposed by the Fiscal Policy Institute (FPI) resulted in a hike on the organization by the government which resulted in the increase of selling prices, thus making the vehicle out of reach of purchase.

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Inflation as well as deflation marks a straight blow to the cost of products and the services. For instance, if more tax is levied on customers, it implies diminished income which finally results in lower expenditure. All these circumstances directly affect the potential customers to turn away from GM and chose more affordable and economic automotive products. Furthermore, for international markets, the inconsistency in the exchange rate gave others an added advantage. An increase in gas prices An increase in a health care trend rate

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