Case 34

General Motors

What are key forces in the general and industry environments that affect the U.S. auto industry, and General Motors?

General Motors (GM) has suffered different threats and difficulties that have put in risk the continuity of its production. Before the year 2000, GM has been going through different production, financial, and development problems. Wagoner has tried in different ways to address each problem in order to make GM more successful. Unfortunately GM had high losses that have made it very difficult to solve those problems. All this is due to a very competitive environment in each there were different forces that affect the development of the firm. According to Porter’s Five-Forces Model of …show more content…
This may tarnish the brand image of the company which in turn leads to customers to look elsewhere for a similar product that offers a fresher image and more benefits. The switching cost in the auto industry is low with several manufactures who offer vehicles that have similar benefits and comparative body style and image.

Finally, unfortunately for GM the intense of rivalry among competitors is very high. The automobile market is highly competitive and the product mix offered by the whole industry is very diverse with many different options. Due to this threat, GM is in need to change the product mix by a product differentiation and reducing costs.

What internal resources and assets does General Motors have to help counter the external forces? What remains to be done?

The great recession has caused trouble for automobile companies across the board. However, General Motors has had more trouble in recent years than other auto companies. The company has positioned itself in such a way that the external forces have had a profound effect on its business. In general, the external forces that GM faces include increasing competition, increasing gas prices, and a technological disadvantage to other car makers. Foreign car makers have been successful at entering the U.S. market for automobiles since the 1980’s. General Motors did not change its business model since this time, so the