GENERAL MOTORS

Environmental Analysis on General Motors

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Environmental Analysis on General Motors

Introduction

Environmental scanning is a collection of problems from the external environment for information management, organizations and use of the method of strategic decision-making process. Apart from the current issues, environmental scanning strategic intelligence can also help quantify the problems foreseen. In environmental scanning, the internal analysis is considered to be the first step. Because of the fact that an organization should fully understand its internal atmosphere before considering the external surroundings, will help the organization to quantify and justice. The environmental scanning or monitoring seems to have originated in the field of business management. In addition to testing the organization's threats and opportunities, environmental scanning is also encouraged for the potential alliance and dominant ideology. Environmental scanning is significant because for the dynamic management of public relations professionals, the success of the organization will be based on the senior leaders having the aptitude to adapt to hastily changing outer atmosphere (William & Billy, 2006).

The business environment can be described by a number of variables such as dynamism, change, turbulence and complexity. Every organization must possess the ability to improve itself. These improvements include optimal effectiveness, re-engineering the major processes and functions that can be the source of competitive advantage for the organization. The purpose of the organization is to regenerate, adapt and survive in the business environment.

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. General motors have its operations in more than 120 different geographic locations. This paper discusses the forces that impact the performance of General Motors and its adaptability to the respective force or trend.

Forces and Trends of GM

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

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 ...