Essay on General Motors

8332 Words Jan 9th, 2016 34 Pages
General Motors and the Auto Industry: A Strategic Analysis

Drexel University
Management 450
5/21/2009
Helena Boe, Diane Ketler, Nicole O’Keefe, Andrew Rubenstein, James Siverio

Table of Contents

Executive Summary 3
A Snapshot of General Motors Today 4
The Strategic Issue Facing GM: Avoiding Bankruptcy 5
The Economy Today 6
History of the recession 6
Economic Climate 7
Stimulus Package 7
Gross Domestic product 8
Inflation Rate 8
Unemployment Rate 8
The Auto Industry Today 9
GM’s Strategy 11
Threats Affecting GM 12
Threat of Rivalry 12
Threat of suppliers 14
Economic Threats 16
Threat of Substitutes 17
Threat of Buyers 18
Threat of Entry 20
Weakness of Internal Cost Structures 21
Government Intervention and
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The fact that GM has such a large portfolio is working directly against their success because of the fact that they are spread completely too thin; by being unable to focus on the core products vital to the company’s success, GM is forced to spread money it does not have around to failing brands which are only driving the company further into debt. Even with initial governmental funding, GM is still unable to find a remedy for its failing success.
GM has historically built brands around the assumption that they will be consumed whether or not they are built around consumer tastes. This lack of versatility and inability to explore long term consumer consumption has created a number of threats with which the company is now faced. Rising gas prices has shifted the majority of consumer tastes to energy and fuel efficient options which GM has not sufficiently adopted, rather just the opposite since they focus more on their pick up and SUV products which are extremely wasteful and fuel inefficient. In light of this, GM is losing business to competitors who have extensively explored and who have begun to master the production of fuel efficient vehicles.
President Obama is unwilling to serve the option of governmental aid to GM without a serious and foreseeable restructuring; lending money without this strict restructuring plan is seen as undeserved and wasteful. GM is faced with mass

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