WOT Analysis of General Motors
General Motors can trace it’s begins to 1908 the world largest automaker employing over 200K people in 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM’s largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. (About GM: General Motors Company, Company Profile , 2010) In this paper I will provide an analysis about General Motors (G. M. s) strengths, weaknesses, opportunities, threats (S. W. O. T) and a brief history.
General Motors was founded on September 16, 1908 in Flint, Michigan as a holding company for Buick by William C. Durant. Mr. Durant is considered as one of the leading pioneers in the American automobile industry and is credited with the creation the system of multi-brand holding companies with different lines of cars. Both Durant and Ford saw the potential in automobiles while Ford followed the course of the basic Model T, and had said “Any customer can have a car painted any color that he wants so long as it is black. (Henry Ford, 1922) Durant sought to provide vehicles for various incomes and tastes. Durant created General Motors based off the ideal of building a car for every taste and income. This made General Motors the biggest company in the automotive industry which led in global sale for “77 consecutive years (1931 to 2008), longer than any other automaker. ” (Strott, 2009) In 2008 General Motors sold 8. 35 million cars and trucks globally with 22% of sale in the United States and 12% in China.
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General Motors created a concept known as the ladder of success where all their brands did not complete with each other from lowest to highest priced Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac. Buyers could be kept in the GM family as their buying power and preferences changed as they aged. “A company’s reputation in the minds of the public can be affected, positively or negatively, by firsthand personal experiences as well as multiple sources of information, including word of mouth, newspaper/magazine articles and TV/radio news. ” (Carl H. Tong, 2006) This is true a company’s reputation is very important in the marketplace; here is an example when you think of Toyota Corolla the first thing that comes to mind is dependability, on the other hand Ford Pinto was named one of the worst ever by Forbes and Time. Knowing this which car would you want to buy? The Corolla of course, but not only the Corolla but other vehicles built by Toyota because of its reputation of its quality. Good reputations give the company two advantages, first it leads buyers to consider the product and customers are willing to pay more for its goods and services.
Going back to our example between Toyota and Ford the used entry level price for a 2002 Corolla is $6400 and Ford’s comparable car the 2002 Focus is $4485 this is based off of Kelly Blue Book. General Motors invested in building vehicles that consumers were turning away from “Its product mix in the U. S. , heavily weighted toward trucks, pickups, and SUVs, is on the wrong side of gas prices. … It is inextricably entangled in the bankruptcy of its biggest supplier, Delphi. In that imbroglio, as in countless others, it is up against a formidable and sometimes militant union …
The company is even under investigation by the SEC for accounting sins, as yet unrevealed. ” (Carl H. Tong, 2006) United Auto Workers (UAW) is the labor union that represents the workers of General Motors. United Auto Workers (UAW) “is a labor union which represents workers in the United States and Puerto Rico. Founded in order to represent workers in the automobile manufacturing industry, UAW members in the 21st century work in industries as diverse as health care, casino gaming and higher education.
Headquartered in Detroit, Michigan, the union has about 390,000 active members and more than 600,000 retired members in 750 local unions, which negotiated 2,500 contracts with some 1,700 employers. ” (Who We Are:United Auto Workers (UAW), 2010) U. A. W. has been blamed for the automotive industry crisis of 2008-2009 which led to U. S. government owning over 60% of the company. Andrew Ross Sorkin claimed that “the average UAW worker was paid $70 per hour, including health and pension costs, while Toyota workers in the US receive $10 to $20 less. ” (Sorkin, 2008) Due to the number of G. M. eaknesses one would think that the amount of opportunities available will be limited but they not. The U. S. government provided “approximately $30. 1 billion of financing to support GM through an expedited chapter 11 proceeding and transition the new GM through its restructuring plan and the U. S. government will receive approximately $8. 8 billion in debt and preferred stock in the new GM and approximately 60% of the equity of the new GM. ” (Statements & Releases: Obama Administration Auto Restructuring Initiative, 2009) Americans still want to believe in the company, General Motors cars are part of the American pop culture.
Cars are part of the American identity with vehicles like Knight Rider’s Pontiac Trans Am, Smokey and the Bandit’s 1977 Pontiac Firebird. From 1931 to 2008 General Motors led the world in auto sales after 77 years in give that title to Toyota. Although General Motors has a god foothold in China many of the local car makers are getting a lot of attention with names like Geely, Chery, and BYD. Another threat to General Motors came from the economy “the humbled auto giant that has been part of American life for more than 100 years, will file for bankruptcy protection on Monday in a deal that will give taxpayers a 60 percent ownership. (Kuhnenn, 2009) As part of this bankruptcy General Motors had the perform restructuring by dropping four of its brands and “The company plans to cut 21,000 employees, about 34 percent of its work force, and reduce the number of dealers by 2,600. ” (Kuhnenn, 2009) General Motors is a company whose beginning started in 1908 and deeply rooted in American culture with cars named Cadillac, Chevrolet, Buick, and Pontiac. The strength of G. M came from its size, and innovation that led it to lead in auto sale for 77 years.
In the last 20 years G. M. has focus on building SUV’s and trucks like Hummer while gas prices rise. Americans refuse to let this company fall with the government investment of 30. 1 billion dollars and the people wiliness to buy. In my opinion the biggest obstacle General Motors faced is not import car companies like Toyota or Honda but it is the unions that allow its members to take advantage of the companies they work for. There is no reason why someone who install tires on a $60K Cadillac be able to buy one.