Employing Strategy in a Competitive Environment

Table of Contents

Introduction1

Company- General Motors1

Environmental Scanning1

Company's Threat1

Company's Strength3

Competitor for the Company3

US Economy Declining4

Global Competition5

References6

Employing Strategy in a Competitive Environment

Introduction

Strategy is all about internal and external audit to gain insight as to what appropriate steps can be taken to relate the firm to its environment in the best possible manner. General Motors is one of the leading automobile manufacturers in the world, however, due to continuous threats from global completion and changing market scenario in U.S., the company is even struggling for its profits. This paper discusses the strategic implications for General Motors in the face of domestic and global competition.

Company- General Motors

The company is General Motors, multinational manufacturer of automobiles founded in 1908, and headquartered in United States. The company is largest automobile maker in the World (Hirsch 2012). Company has faced severe problems with managing its finances, and has operated at loss for many years just to keep the factories moving and avoid further loss (Marketline 2012). GM is still facing a number of threats from external environment and will have to develop product and devise strategies to gain success in increasingly competitive automobile industry.

Environmental Scanning

Company's Threat

The company is facing a mammoth number of external threats with severe consequences for the firm. One of the chief threats is the increasing fuel prices. The fossil fuel is limited and is causing concern to automobile manufactures. Companies are taking this threat as an opportunity to develp hybrid vehicles, and more light/efficient vehicles, however, GM is lagging in developing such products competitively.

Another threat is the growth of competitors. The Toyota Motors is giving tough time to GM and is fast in bringing innovative products with increasing level of sophistication like, Hybrid technology. The competitive position is further weakened with pension payout. GM pays very generous amounts of pension benefits to its employees bringing the cost to a very high level. The costs for company are rising also because of supply cost. The cost of steel is rising which is one of the major component in most of the vehicles that company produces, therefore it is very difficult to cut the cost without dropping quality.

The U.S. conventional car market is at its maturity, the youngster is no longer in craze of cars. It is due to many reasons, one being the internet technology (Data monitor 2011). Now, youngster likes to hang out on social media rather than on roads, which is evident with the increasing traffic and popularity of social sites like Facebook and Twitter (The New York Times Company 2012).

The company should involve in Research and Development and increase the pace of its product development and introduction phases. The company will have to develop efficient vehicle using latest technologies to counter the threat of fuel cost. The company will have to find ways to cut its cost, like making well thought commitments to employees regarding future pension benefits and bringing innovative changes in its supply chan. In this way, it will become more competitive ...