General Motors Essay Example for Free

world(a) Motors EssayA car for every purse and purpose Alfred P Sloan Jr, former(prenominal) President CEO General Motors. General Motors, one of the worlds outstandingst automakers, traces its roots back to 1908. With its world(prenominal) headquarters in Detroit, GM employs 205,000 people in every major region of the world and does business in some 157 countries.GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles by the following brands Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Jiefang, Opel, Vauxh totally and Wuling. GMs largest national market is the United States, followed by China, Brazil, Germany, the United Kingdom, Canada, and Italy. Company History General Motors was founded on Wednesday, September 16, 1908, in Flint, Michigan, as a holding company for Buick by William C. Durant. Durant started acquiring many companies like Oldsmobile, Cadillac, Cartercar, Elmore, Ewing, Pontiac etc.Durant lost contro l of GM in 1910 to a bankers trust, due to the large amount of debt (around $1 million) namen on in its acquisitions. Durant left the firm and co-founded the Chevrolet Motor Company in 1911 with Louis Chevrolet. After a brilliant stock deprave back campaign, he returned to head GM in 1916. GM surpassed Ford Motor Company in sales in the late 1920s give thanks to the leadership of Alfred P. Sloan. Sloan was inventing new ways of managing a complex worldwide organization, while paying special attention to consumer demands.Car buyers no longer wanted the cheapest and near basic model they wanted style, power, and prestige, which GM offered them. During the 1920s and 1930s, General Motors assumed control of the Yellow Coach bus company, and helped pee Greyhound bus lines. They replaced intercity train raptus with buses. GM involve a sense of urgency regarding revising a strategic plan that incorporates the next generation of vehicles. In todays world-wide economy and highly com petitive auto effort GM has no time to procrastinate. As stated,GM has just too much at take chances in not becoming an exertion leader in alternate fuel technology. discharge-economy legislation is sparking the race. This is a critical time in auto industry with many nemesiss, but opportunities as well. The next several years will redefine GM. Vision Statement The GM vision is as follows GMs vision is to be the world leader in transportation products and related services. GM will earn our customers enthusiasm by means of continuous improvement determined by the integrity, teamwork, and innovation of GM people.The proposed new vision for GM is as follows For GM to perish the automotive industry leader in alternative provide vehicles and providing superior quality products that global consumers call to mind when they think of quality and innovation. My vision for GM is to be the industry leader in innovation, and where all another(prenominal) industry contestation strives to imitate. Mission Statement The current GM mission statements are as follows Drive improvements in market share, revenue, brands, people, responsiveness, and cost effectiveness through the implementation of global common metrics and best practice sharing.The new proposed mission statement will be as follows GM will become an industry leader, not a follower. To regain lost market share that was lost to foreign competition, and erstwhile over once again be the auto industry leader in sales and market share in todays global market. Values Statement The auto industry just like the global economy is going through tremendous change, due to rising fuel prices, and environmental worries, such as global warming. GM must(prenominal) use these threats as opportunities, and take advantage of changing consumer buying habits.GM needs to change consumer perception of the company, from a dull, poor quality, vehicles to innovative, quality, and environmentally friendly company. To do this GM must portray an image that states that GM values what the consumer wants and what the environment needs. Listen to what consumers are saying directly and indirectly approximately GMs current products, and create innovative, green, vehicles that turn consumers into customers. At the same time provide GM stakeholders pride and financial incentives to remain with GM. Environmental Analysis GM and the broad(a) auto industry are currently challenged with the perfect storm.The auto industry is being hit by a weak US and global economy, rising fuel prices, and social and political environmental concerns and issues. In order to overcome these potential threat, GM should consider mass producing a range of alternative fueled vehicles, i. e. fuel cell, electric, and hybrid. grind away Analysis Strengths 1. Large Market Share Although GMs market share in the US has dropped it is still very much competitive at 26 percent. They besides have an increasing share in the Chinese market. With the right decisions there is no reason for GM to not become the automotive leader it once was. . Global Experience As explained to a higher place even with GMs recent decline they still have the market share and the experience to bounce back. They have been a worldwide company for nearly a century at once and have established themselves as the global leader for most of them. If you recall I mentioned above that a current opportunity for GM is to expand globally and as we can con they already have the experience to do so. It is just a matter of the correct planning and proper implementation of those plans that will decided whether or not GMs goals are achieved. 3. Variety of Brand NamesGM as I mentioned has been the automotive leader for the majority of the last century. A large reason for that is the wide variety of quality brand names that appeal to all target markets. The current GM brands include Chevrolet, GMC, Cadillac, Buick, Pontiac, Saturn, Hummer, Saab, Daewoo, Opel, and Hol den. 4. GMAC Customer Financing Program Since its establishment in 1919 it has proven to be GMs most reliable source of revenue. 5. OnStar orbiter Technology Developed in 1996 OnStar currently has over 3 million subscribers and is standard on all GM vehicles.This technology allows the vehicles to be tracked in the event of an emergency or thievery. It also allows the driver and or passengers the ability to communicate with OnStar personnel at the click of a button. Weaknesses 1. Behind on alternate(a) Energy Movement This is GMs biggest weakness. The alternative energy/hybrid trend has begun to take place in the automotive industry and GM has been one step piece of tail the competition in terms of alternative energy vehicles. This has led to many problems including loss of market share and a decrease in company profit.In order for any automotive company to be successful from this point forward they must be Hybrid friendly and fuel efficient. 2. Poor organizational Structure As w e can see in exhibit 1 of the case GMs organizational structure seems to be too vertically integrated. This causes a wishing of communication between employees from top to bottom and may have played a part in GM falling behind on the alternative energy movement. 3. Stagnant Profitability Looking at GMs profit we see that they are certainly struggling with respect to the size of their company.Their profit margin was about 1. 5% and the ROE has dramatically decreased over the recent years dropping to 10% in 2004. This is a situation that shareholders will not be pleased with. 4. Overly Dependent on US market GM has become too dependent on the US market and must take advantage of the opportunity to expand globally. The competition is becoming too strong to focus on just one country. 5. Overly Dependent on General Motors Acceptance Corporation(GMAC) Financing GM has become too dependent on its financing program.Granted it is a great strength for GM, however they once again cannot rely solely on financing in order to turn profit, especially if they want to compete with Honda and Toyota who are rapidly growing. 6. Poor Credit locating GMs credit status has like everything else has been steadily declining. Their current ratio is just barely above 1 and their acid test is even lower. Although, I dont see them getting denied based on their credit at this point, the seriousness of the matter is certainly apparent. Opportunities 1. Alternative Energy movementIt is obvious that GM was behind its competition with regards to the research and development of hybrid vehicles. However hybrid technology is still very much new giving GM the opportunity to once again become the automotive industrys leader in innovation and technology. 2. Continuing to Expand Globally. Recently GM saw an increase in the Chinese automotive market, which proves their needs to be more emphasis put on foreign markets. If GM can infiltrate these markets and successfully grow along with their continuing focus on the US market they will be headed in a positive direction. . Low Interest Rates With the right marketing strategy the low pastime rates have the potential to generate an immediate increase in sales. 4. Develop New Vehicle Styles and Models This is an opportunity that will never be satisfied, import that GM should always be attempting to develop the automotive worlds most popular vehicles, and as we know, what is in today will be out tomorrow. Threats 1. Rising Fuel Prices With GM being a large producer in both trucks and SUVs, sales have drastically decreased due to the lack of fuel efficiency.The burn down in fuel prices has played a significant role in creating the opportunity for development of both hybrid and more fuel efficient vehicles. As you will find with most threats, an equal opportunity will usually emerge as is the case here with GMs opportunity mentioned above. 2. Growth of Competitors GM no longer has the luxury of being the known leader in the automotive industry and faces the reality that they are in serious trouble. As I mentioned rather Toyota took the first step in the direction of hybrid echnology and has since drastically grown and become the questionable automotive frontrunner to start the 21st century. 3. Pension Payouts. Part of this threat is their own doing and the other is simply unavoidable. GM is responsible for providing generous pension benefits to its employees, which at the time seemed like a great idea, however they are now experiencing problems as more and more people begin to collect. 4. Increased Health Care Costs GM, like many large companies with quality employee health apprehension benefits, is experiencing a large financial hit that only gets worse as time continues. . Rising Supply Costs, i. e. Steel Once again this threat affects the entire automotive industry and forces each company to cut manufacturing and production costs as much as possible, without taking away from the quality of the product. Core competency The core competence of General Motors is innovation. This is the driving force behind its $190 above turnover. General Motors has been utilizing innovation in service ad technology to capture itself a dominant position in the automobile industry, since 1908.In 1911, it conceptualized, engineered and commercialized the self-starter engine for the first time. Then in 1926, its product Cadillac was the pioneer in create mentally a nationwide service strategy. In 1996 General Motors introduced OnStar satellite technology which allows equipped vehicles to be tracked in case of an emergency or theft and allows the passengers to communicate with OnStar personnel. Other new car concepts include minicars such as Chevy Aveo. However in the case of hybrid vehicles, General Motors was unable to economize up to the pace of the market demand.