GM MOTORS

GM Motors

GM Motors

Introduction

General Motors (GM) is one of the largest automobile organizations that have an existence in more than seventy countries around the world. General Motors is a leading global automotive group, and historically is among the top U.S. companies by revenue. General Motors Company was born as a group of companies in the year 1908 through the initiatives of C. Williams Durant. General Motors (GM) is primarily engaged in the design, development, manufacturing, and marketing of automotive products worldwide. In FY2010, GM produced 8,714,000 vehicles under the brands, including Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling. GM's operates in more than 120 countries worldwide. Substantially all of GM's cars, trucks and parts are marketed through retail dealers in North America, and through dealers and distributors outside of North America, the substantial majority of which are independently owned. The company also has 15,048 distribution outlets throughout the rest of the world, which include distributors, dealers and authorized sales, service and parts outlets. This paper discusses the forces that impact the performance of General Motors and its adaptability to the respective force or trend (Richard, 2008).

Core Competence

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 secure 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 devising a nationwide service strategy.

Forces and Trends of GM

General Motors's Cost of Goods is Highly Affected by the Commodity Prices

Steel

Steel is a major component for making cars. Therefore, an increase in the price of steel has a direct impact on the production cost of GM as well as the profit margins. The increase in the prices of steel increase the cost whereas reduces the profit margins. It is difficult for GM to substitute steel for any other material in order to minimize the cost of production. Aluminum is another important material that is used in the production of the automobile; it also has an impact on the profit margins of the organization (William and Billy, 2006).

Oil Price

An increase in the prices, due to inflation increases the cost of ownership. Since cars are luxury items, the consumers do not buy cars frequently. Therefore, the rising oil prices only have a limited impact on the sales of General Motors. As the economy is in the recovery phase, it is expected to remain stagnant in the future. GM has always focused on the fuel efficiency of it cars. It also pays attention to the external problems, for example, a constant increase in the prices of gasoline has diverted the attention of many consumers to the cars that are fuel efficient (Richard, 2008).

International Presence Plays a Vital Role in the Strategy of General Motors

General Motor's has a global presence and is considered as a point ...