Swot Analysis- General Motors (K) Essay
SWOT analysis basically entails identifying and outlining the organization’s strong attributes that are helpful to achieving the objectives(strengths); weak attributes of the organization that are harmful to achieving its objectives (weaknesses); external opportune conditions that are helpful to achieving the organization’s objectives (Opportunities); external conditions that are harmful to achieving the organizations objectives(threats).
Basically the organization identifies and strategizes on how to use each strength, stop each weakness, exploit each opportunity and defend itself against each threat in order to maximally achieve their objectives. General Motors Corporation is a global manufacturer, marketer, and distributor of cars, trucks, and parts. The company also engages in the provision of loans and other financial services, including consumer vehicle financing, dealership financing, residential mortgage services, personal and commercial insurance coverage, and more.
With regard to the current case study General Motors (K) has various strengths, weaknesses, opportunities and threats as outlined below:- Strengths • Large market share control- the vehicle manufacturing plant in Nairobi assembles a wide range of Isuzu trucks and buses. It is the largest manufacturer of commercial vehicles in the Eastern African region with more than fifteen models. General Motors Corp. (NYSE:GM), the world’s largest vehicle manufacturer, employs about 325,000 people globally.
GM has been the global automotive sales dealer since 1931 and today has manufacturing operations in 32 countries and its vehicles are sold in 192 countries. In 2003 it sold nearly 8. 6 million cars and trucks, about 15% of the global vehicle market • Quality certification and control- General Motors (K) is certified to ISO 9001:2008 (quality management system) and ISO 1400:2004(environment management system), the best known testimonials to world class quality and environmental standards respectively.
GM East Africa also meets Isuzu Japan Manufacturing System Quality Certification and complies with GM Corporation (USA) Corporate Audit requirements. • Branding – General motors has over 30years’ experience in local assembly and service. The manufacturing plant in Nairobi assembles a wide range of Isuzu trucks and buses and is the largest manufacturer of commercial vehicles in the Eastern African region. Vehicles are engineered to suit local operating conditions with up to 50% local content on some models.
As such, the General Motors Brand is well rooted not only in Africa but throughout the world with its largest vehicle manufacturer headquarters bases in the USA. • Worldwide Presence – General Motors in general truly has an international presence with factories in Poland, Russia, South Africa, Ecuador, Egypt, Germany, Argentina, Australia, Belgium, Brazil, China, Colombia, South Korea, Spain, Sweden, and Thailand. The company is even in Viet Nam.
In addition, it also has assembly, manufacturing, distribution, office and warehousing operations in 55 other countries. • Skilled Personnel – An ultra- modern service Centre with state of the art equipment and skilled personnel provides its customers with additional after-sales service and support. Filed service support is available in the entire Eastern Africa region from GM East Africa and its dealer network. • Technology collaborations- GM has technology collaborations with BMW AG of Germany and Toyota Motor Corp. f Japan, and Vehicle manufacturing ventureswith several automakers around the world, including Toyota Suzuki , shanghai Automotive Industry Corp. of China, AVTOVAZ of Russia and Renault SA of France.
• Huge work force and securities of scale- General Motors Corp. (NYSE:GM), the world’s largest vehicle manufacturer, employs about 325,000 people globally. GM has been the global automotive sales dealer since 1931 and today has manufacturing operations in 32 countries and its vehicles are sold in 192 countries. In 2003 it sold nearly 8. million cars and trucks, about 15% of the global vehicle market. • Management Policy- GM (K) uses the open door policy to encourage its workers to present their ideas and give their opinions on work related issues. Weaknesses • Underutilized production capacity- the Nairobi plant was operating with only one shift yet it has a three shift potential and forecast production at 2,300 units- approximately 60% of the capacity of one shift which was reportedly a 50% increase over the previous year’s level of production.
Utilizing a greater proportions of the production capacity would help GM (K) fulfill a national goal of providing more jobs • Level of quality and safety of its products- GM (K) has a responsibility according their managing director, to continually improve the quality and safety of its products to meet both strict international and GMC parent company standards, and to maintain high levels of service since as he stated service and quality is what really sells products. Opportunities Financial Service Company- GM operates one of the world’s leading financial service companies GMAC Financial Services which offers automotive and commercial financing along with an array of mortgage and insurance products. • Increased production capacity- the Nairobi plant was operating with only one shift yet it has a three shift potential and forecast production at 2,300 units- approximately 60% of the capacity of one shift which was reportedly a 50% increase over the previous year’s level of production.
Utilizing a greater proportions of the production capacity would help GM(K) fulfill a national goal of providing more jobs • Rising Demand for locally assembles passenger Vehicles – the new uhuru model that was endorsed during the Moi government was the first locally assembled passenger car which was powered by an 1800cc engine and had a high content of locally made components and parts.
Tires, batteries , paint and windscreens that were all to come from local manufacturing and production of such locally manufactured cares may increase both profits an(and therefore dividends to shareholders) and save the government foreign exchange bow spent on imports of passenger cars which in turn would boost the demand for GM’s products. • Exporting of assembly tools made by GM in local plants- for example in 1985 April, GM is reported to have sent one of its engineers to Egypt to install and commission vehicle assembly equipment made in Kenya and exported to Egypt.
The tools exported to Egypt were reportedly designed in Kenya and were designed as labour intensive. Other exports of assembly tools have been made to Nigeria, Zambia, Tunisia and Latin America. And Egypt has even placed a 3 million Kenya Shilling order for future delivery. Many local engineers feel that the Kenya’s ability to manufacture for export is only in the infancy stage and has considerable future regional market potential. • Increased Regional
Markets- the local market is the stated primary focus of GM (K): however, with the advent of Preferential Trade Area (PTA) and common Market for Eastern and Southern Africa(COMESA), regional areas in Tanzania , Uganda, Sudan (North and South Sudan), AND Zanzibar, have become potential markets for automotive vehicles assembled in Kenya. In total GM (K) has reported exporting 10% of its local production during each of the past two years, but with volume increasing.
This is a new front that needs to be exploited. Threats • Severe Foreign Exchange Shortages – most regional countries such as Uganda, Tanzania and other African nations have severe foreign exchange shortages themselves. In order to counter this, GM (K) is considering barter trade arrangements as a strategy. • PTA Trade Restrictions- the PTA restricts its most favourable trade terms to locally owned firms in its member countries. GM (K) is 49% owned by GMC of the United States. Weakness in implementation of the PTA – to date, PTA is having trouble getting started, and communication, rail, air and road transportation links between member nations are themselves a major obstacle to interregional trade. For example, Kenya has nearly completed its share of the Trans-Africa Highway across Kenya from Tanzanian border to the Sudan to the north, but it has had to pick up the cost of a portion of the road construction that was to be paid by neighbouring nations. And meanwhile efforts to reunite and/or reopen Kenyan and Tanzanian rail connections have been anything but fruitful
Q. 2 Discuss how GM can use Ansoff’s matrix as a tool on developing new marketing strategies Ansoff’s matrix refers to a strategic marketing planning tool that links a firm’s marketing strategy with its general strategic direction and presents four alternative growth strategies as a table (matrix). It suggests how firms can grow their business by adopting one of four strategies based on products and target markets. These strategies are seeking growth: 1. Market penetration: by pushing existing products in their current market segments. This involves increasing market share within existing arket segments. This can be achieved by selling more products/services to established customers or by finding new customers within existing markets both locally and regionally. 2. Market development: by developing new markets for the existing products. This strategy would entail GM (K) finding new markets for existing products within the region and beyond. Market research and further segmentation of markets helps to identify new groups of customers. 3. Product development: by developing new products for the existing markets. This involves developing new products for existing markets.
Product development involves thinking about how new products can meet customer needs more closely and outperform the products of competitors for example GM (K) could increase the production of locally manufactured passenger cars. 4. Diversification: by developing new products for new markets. This involves moving new products into new markets at the same time. It is the most risky strategy of them all. The more an organization moves away from what it has done in the past the more uncertainties are created. However, if existing activities are threatened, diversification helps to spread risk. pic] General Motors is primarily engaged in automotive production and marketing and financing and insurance operations. GM designs, manufactures, and markets vehicles worldwide. The core competence of General Motors is innovation. This is the driving force behind its high turnover amounting to 15% of the global vehicle market. General Motors has been utilizing innovation in service ad technology to secure itself a dominant position in the automobile industry, since 1908 the ,same should be capitalized on to enhance its products and target markets. Q3.
What marketing philosophy was GM practicing with use of examples from the case? Firms and businesses approach and conduct business in different ways in order to achieve their organizational goals. There are five competing concepts by which firms and business are guided in their marketing effort. The first three concepts production, product and selling, focus all on the product. The last two concepts marketing and societal marketing, focus on the customer. However, the commonality in all five philosophies is that they all have the same goal which is organizational profit.
The choice as to which concept or philosophy to adopt depends on the circumstances of the situation 1. THE PRODUCTION CONCEPT-the philosophy that consumers will favor products that are available and highly affordable, that management should therefore focus on improving production and distribution efficiency. This can be clearly seen through GM’s locally produced passenger cars which were engineered to suit local operating conditions with up to 50% local content on dome models. This helped customers and even the, government save on foreign exchange spent on imports of passenger cars . THE PRODUCT CONCEPT: the idea that consumers favor products that offer the most quality, performance and features, and that the organization should therefore devote its energy into making continuous product improvements; a detailed version of the new product idea. As the GM Managing director stated, GM had a responsibility to its customers and to the public to continually improve the quality and safety of its products to meet both strict international and GMC parent company standards and to maintain high levels of service 3.
THE SELLING CONCEPT: the idea that consumers won’t buy enough of the organizations products unless the organization undertakes a large-scale selling and promotion effort. GM is the world’s largest vehicle manufacturer with operations in 32 countries and its vehicles sold in 192 countries. In 2003 it sold nearly 8. 6. Million cars and trucks about 15% of the global vehicle market. 4. THE MARKETING CONCEPT: achieving organizational goals depends on determining the needs and wants of its target market and delivering the desired satisfaction more effectively and efficiently than competitors.
GM (K) prides itself in manufacturing and providing vehicles that are engineered to suit local operating conditions with up to 50% local content on some models. GM East Africa continues to develop and modify designs to customer requirements 5. THE SOCIETAL MARKETING CONCEPT: the idea that the organization should determine the needs, wants and interests of target markets and deliver the desired satisfaction more effectively and efficiently than competitors in a way that maintains or improves the consumers and society’s well being.
GM (K) prides itself in manufacturing and providing vehicles that are engineered to suit local operating conditions with up to 50% local content on some models. GM East Africa continues to develop and modify designs to customer requirements. They have even gone further to considering barter trade arrangements to accommodate countries that have severe foreign exchange shortages in the region.