Continuation for previous week

SWOTT ANALYSIS OF GENERAL MOTORS NEW DIVISION 1

SWOTT Analysis of General Motors New Division

Brandon Lee

BUS/475

Professor Dariush Ershadi

May 24, 2017

SWOTT Analysis of General Motors New Division

Factor	Strengths	Weaknesses	Opportunities	Threats	Trends
External forces and trends considerations
Industry Changes			Increased Fuel Prices	Decline in demand	The company is boosting innovation to cater for the industry changes.
Global			Has global automotive production capacity	Global market downfall and recessions	Global Experience
Economic			Huge market share	Competitors’ philosophy	Variety of Brand names
Legal and regulatory			Existence of many legal barriers and regulations	Various legal and regulatory framework affect GM operations	Meeting legal need set by international markets
Technological			Technology is affecting how companies produce their goods	Old and outdated technologies	Internet had played a significant role in automotive industry
Social			International knowledge	People are currently concern about their society and status judges by what type of car one drives.	Manufacture takes advantage of this thought and targets the market.
Innovation			Innovative ideas and advanced technology	Demands for hybrid automobiles	Hybrid technologies and innovations are helping to compete with the new trend.
Environmental			The company’s operations should be safe to the environment	Risks of environment pollution	Companies moving to environmentally friendly and sustainable technology
Competitive analysis			Growing markets	There is increased competition in the automotive industries.	The company is diversifying to boost its competitive market advantage
Internal forces and trends considerations
Strategy	The company has a strategy	Poor strategies and lack of Foresight			The company is expanding its strategies in global market
Structures	Its organizational structure seems to be too vertically integrated	Poor Organizational Structure			Enhancing communication between top level management
Processes and systems	Customer Satisfaction	Behind on Alternative Energy Movement			Plants and processes are designed around providing support for the production
Resources	Joint ventures with local Chinese automotive companies hence expanding its resources	Decline in finances			The company is expanding its resources capabilities by acquiring other companies
Strategic capabilities	Strategic Alliance with Honda Motors	Dependence on U.S. to generate most of the revenue			There is more focus on Global Market
Technologies	Have robust technological capabilities	Frequency and timing of the new model releases			The company is expanding its technology capabilities by acquiring other companies
Innovations	Incorporate energy efficient vehicles.	Slow moves to substitute Energy Progress			There are progress Substitute Energy
Intellectual property	Its products are subjected to copyright and intellectual property	Chances of copied styles.			GM to push back against consumer modifications of vehicle software
Leadership	Worldwide availability	Weakened Employee-Employer Relationship			Company trying to increase the employee-employer relationship

Following the changes in the economy and dynamics of the market, because of financial and economic crises, the trends in the economics of the world is changing gradually in the Western countries. A fast rate of economic growth is evident in the developing economies such as India and China. To get a share of the growing economies, multinationals companies are venturing in these developing economies. The developing economies do not only offer grounds for boosting their productivities but also are sources of cheap labor and new markets. For instance, China’s economy is growing at a rate of 7.5% while the economy U.S.A. is growing at a rate of 3%.

Another economic trend in the world today is the change in demographics. In most countries, the rate at which the aged population is growing has reached 200% and above per year. The young generation is developing at a slower rate compared to the aged population. This difference is the change in demography is evident in the developed markets. These changes in the demographics are forcing companies to come up with diversified lines of products and services to cater to the needs of the aged population as well as the young generation. The companies are also trying to hire and recruit new workers into their organizations.

In addition to changes in the rate at which the economy is growing and the changes in demographics, information technology is becoming easier to acquire in the developed markets. Information technology is enabling people to acquire services and goods at any time and from anywhere in the world. The information technology has provided companies with a new channel to sell their goods and services. To achieve competitive market advantages, companies need to adopt the practice of selling their goods and services via the internet, to serve all of their customers.

Most countries have tightened their regulations and legal frameworks. Most governments are introducing legal frameworks to protect the interest of their people in different markets from foreign competition from multinational corporations. The rules and regulations are aimed at protecting the rights of employees as they ensure that they not only earn decent wages but also work in safe working environments. In ensuring that the employees are protected, the regulatory forces ensure that workers enjoy benefits such as work injuries and health care insurances. An example of a regulatory system is where the government struggles to make sure no company monopolizes the economy as it will encourage unfair competition.

In an organization, change is inevitable. The change can be demanding. It may constitute a risk factor for the wellbeing and health of employees. An organization that has just established a new division need to set up mechanisms that will allow it to adapt to the change smoothly. According to van den Heuvel, Demerouti, Bakker, and Schaufeli (2013), the pace at which the change occurs transforms the organization into continuous changing tribute system; hence, the organization needs to have employees who can adapt to the change on ongoing basis. The organization needs to do more work on the micro-level drivers for the successful change adjustment for the employed.

General Motors has been able to adapt to the change in the past, and it will continue to adopt change with the new division. The company was forced to change following competition from other auto-making companies such as Toyota, which captured the markets that GM had dominated for years. The company had been pushed almost to bankruptcy due to their slow adoption to change. The company has closed most of its several brands and sold out to China-based companies. After adapting to change, the company gained its position as well as its main brands.

Currently, GM adapts to organizational changes using various strategies. The first way in which General motor adapts to change is through the use of technology. Technology can be a force that drives change in an organization. Once the company embraces technology, they can adapt to change. Going global and diversification is another way in which General Motors adapt to organizational change. Selling its diversified services and products in foreign markets helps the company to increase its client base; therefore, boosting its competitive advantage in the market. Establishing new divisions also helps the company to adapt to change.

The supply chain is simply the sequence of the process that a company employs in the production and distribution of its products and services. The new division in General Motors needs to have a strong chain supply plan. General Motors have integrated supply chain for all of its business including the new division. The supply chain in General Motors, like in any other company includes aspects from inventory procurement, manufacturing of products, department of logistics and customer fulfillment and relations. To ensure efficiency in the new division and the whole company, General Motors conduct inventory management within the same supply chain.

General Motors need to carry out stakeholders’ training. The training makes a positive impact on the new division and the company as a whole. The training should also include the suppliers. Training the suppliers ensures that they have the complete understanding of the need to provide quality products to the company. Training improves communication skills between various entities in the company. For instance, properly if properly trained, employees, employers, stakeholders, and suppliers will have necessary skills to interact with their customers and understand the needs of their target market. Effective supply chain management in the new division creates value to the General Motors and lead to increased revenues (Ludwig, 2016).

In the effective supply chain management, the company should include an aggressive frame in their supply chain and improve client relationship. The positive relationship between the clients and the company is a valuable asset. The company needs to cater to the need of their clients with the products and services they offer. They should ensure they provide the best services and quality products than any other automobile company. This means that the company will need to include effective inventory management to organize and administer its inventory and supply chain at the most favorable level. The new division will have to employ new strategies and tools such as the supply chain planning systems, as well as supply chain implementation and demand planning (Türkay, Saraçoğlu, & Arslan, 2016).

Strategic plans are sets of strategies for development that top-level managers develop to achieve specific strategic goals. The internal environment of General Motors includes factors such as controllable variables as the structure of the management, development of the workforce, and operational layout processes. The GM external environment consists if uncontrollable variables that come from outside the company such as the legal environment, competitors’ actions, and consumer preferences. A comprehensive strategic plan should look into both external and internal environment to come up with an innovative strategy that can leverage internal strengths and take advantages of the external opportunities.

While General Media is facing issues in the automobile market, a lot of opportunities are open for the company. The major issues facing General Motors include competition. With many active multinational corporations offering vehicles at an affordable price, General Motors is facing fierce completion that threatens its business. Some of the GM competitors include Toyota Motor Corporation from Japan Ford Motor Company, Tesla Motor Company, and FCA US LLC. The other issue facing General Motors business is government regulations in the countries that it offers its products and services. In some markets, the company faces tough government regulations that affect its services in those countries.

Despite the issues, General Motors still have opportunities in the new markets in the developing and some developed economies. Communication has been made easier by globalization, and now the company can communicate with its branches worldwide making business efficient. This has made advertising easier where the company can reach to prospective customers all over the world.

References

Ludwig, C. (2016). General Motors: The new law of supply & demand - Automotive Logistics. Automotive Logistics. Retrieved 23 May 2017, from http://automotivelogistics.media/intelligence/general-motors

Türkay, M., Saraçoğlu, Ö., & Arslan, M. (2016). Sustainability in Supply Chain Management: Aggregate Planning from Sustainability Perspective. PLOS ONE, 11(1), e0147502. http://dx.doi.org/10.1371/journal.pone.0147502

van den Heuvel, M., Demerouti, E., Bakker, A., & Schaufeli, W. (2013). Adapting to change: The value of change information and meaning-making. Journal Of Vocational Behavior, 83(1), 11-21. http://dx.doi.org/10.1016/j.jvb.2013.02.004