Swot analysis of General Motors. General Motors Company is an automobile manufacturing US multinational company. Alfred P. Sloan, Charles Stewart Mott, and William C. Durant were the founders of General Motors, and they laid the foundation of the company on September 16, 1908. The headquarter of the company is in Detroit, Michigan, USA.
General is one of the world’s largest automobile manufacturing companies and it’s the largest company in the US. However, General Motors’s main products and services are automotive financing services, automotive spare parts, commercial vehicles, and automobiles.
According to an estimate, the annual revenue of General Motors in 2020 was 122.49 billion dollars. Out of which, the net income of the automobile company was 6.247 billion dollars. However, the company has employed more than 155,000 employees to manage its worldwide operations.
Today, we’ll discuss the swot analysis of General Motors. It’s going to analyze the internal and external factors impacting the world’s largest automobile manufacturing company. Here’s the swot analysis of General Motors as follows;
Strengths of General Motors
GM follows the simple formula of increasing the total sales volume and it increases the revenue and profitability. The company’s sales have declined during the pandemic of covid-19. However, GM was the 41st globally and 12th in the US most selling company before the pandemic.
GM’s portfolio comprises a wide range of brands and products. It ranges from GMC, Chevrolet, Cadillac, and Buick to Opel and many others. They all are unique and operate under the umbrella of General Motors. They provide the parent brand a unique competitive edge.
General Motors is selling its automotive products and services in six continents worldwide. The main continental divisions of the company are GM China, GM North America, and GM International deals with Latin America, Africa, Middle East, and Europe.
General Motors is one of the few companies that have received the 5 Stars Safety awards. It falls under the category of the world’s safest vehicles. The advanced safety features attract customers towards the brand and influence their decision-making process.
Alliances & Partnership
GM knows its strengths and weaknesses. The company makes alliances with strong partners to overcome its weaknesses. That’s why GM has partnered up with various brands like GM-CATL, SAIC-GM, and others over the years to strengthen the brand’s position.
Whether it’s designing the navigation system of the Apollo Moon Project, manufacturing of the combustion engine, or the electric vehicle; GM has established the reputation of the world’s most innovative companies. Now the company plans to take on another impossible project of the million-mile electric vehicle battery.
The global market share of GM in is 2020 was 17.3% in the automobile industry. The automotive brand is the largest manufacturer in the US. The high market share of the automobile company both locally and globally makes the company a market leader.
According to an estimate by Forbes, the market capitalization of GM in 2021 is 84.45 billion dollars. The automotive company ranked at the 89th position of the Global 2000 companies.
Weaknesses of General Motors
The focus of GM is completely on the automobile design and manufacturing industry. In other words, the company has put all its risks in one basket. If the automobile industry falls just like it did in 2020 due to the worldwide lockdown, then it would have a severe impact on the company’s profitability.
Safety and quality are the two major concerns of automobile customers; a slight defect in the vehicle could cost a person’s life. The same thing happened in 2015 when a defective ignition switch caused 124 casualties and 275 injuries. That incident raised many questions about the company’s quality and safety features.
Reliance on the US Market
It’s not doubting GM is the global automobile company. But the US remains its main market for sales and revenue. The over-reliance of the company on the US market as its main income source is very risky. Changing market trends or economic recession would greatly impact the company’s growth.
GM truck cheated the carbon emission test for five years from 2011 to 2015. When the story broke out in 2015, many tech critics questioned the company’s trust and credibility.
Dependence on Trucks & SUVs
GM trucks and SUVs are very popular among customers. In fact, they both are the main selling products of the company than cars. The dependence on trucks and SUVs and their decreasing sale isn’t good for the company.
Opportunities available to General Motors
GM should expand its product portfolio by adding more relevant products like electric bikes and others. It would help the company to diversify its product portfolio and increase its growth rate.
Self Driving Vehicles
The trend of driverless vehicles and autonomous technology is growing. GM has recently launched a self-driving cruise vehicle in Jan 2020. It was a great achievement of the company to make its mark in the autonomous vehicle industry. Now, the brand should keep working on autonomous technology and make it more efficient.
GM is already running its business in the Asian developing countries. But the company’s market share is very low. The automotive company should now further expand its market share in the emerging economies that are full of growth potential.
The environmental trends have shifted the attention of the vehicle towards electric vehicles. The demand for electric vehicles is increasing among eco-conscious customers. Now GM’s vehicles comprising of high capacity batteries are exploiting the growing trends.
Threats General Motors have to face
Carbon emission tests and other environmental regulations are making it difficult for the automotive companies GM to conduct their business. More regulation would tighter the company’s profitability.
The pandemic of covid-19 has dropped the company’s annual revenue and net income to a great extent. The lock, shutdown of businesses, and the unemployment rate decreased the purchasing power of ordinary people. The lower spending decreases the company’s sales and impacts revenue ultimately.
Toyota, Honda, Tesla, Volkswagen, BMW, and Ford are some of the main competitors of GM in various categories. It’s not easy to compete with many competitors at once. Their growth and profitability pose a great threat to the company’s market share.
Approximately 48,000 workers from 34 manufacturers strike against GM in 2019. The protest cost the automobile company more than 2 billion dollars. If it happens again in the future, it would be a major blow to the company’s profit.
Conclusion: General Motors Swot Analysis
After an in-depth study of the swat analysis of General Motors, we’ve concluded that General Motors is indeed one of the world’s largest automobile companies. The labor issues, economic recession, lawsuits, competitors, scandals, and bad publicity are some of the main challenges. General Motors should expand its products and business portfolio and avoid conflict with employees.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.