Management Assignment: PESTLE Analysis On General Motors

Question

Task:
You are required to write an article in this management assignment presenting a PESTLE analysis on a business organization of your choice.

Answer

PESTLE Analysis

The world's automobile market has been under great pressure from the drop in oil prices. In order to maintain market share, General Motors needs to focus on positioning itself as a leader in technology and alternative energy cars. This article on management assignment will examine the major forces that affect the global automotive market and how it is impacting General Motors. The article will conclude with recommendations for General Motors.

Political/legal: 

• In order to stay competitive in the global market, General Motors must abide by the changing regulations in each country. For example, new emissions regulations are being put into place in China, and General Motors needs to keep up with these new changes.

• General Motors also has a responsibility to practice good corporate governance in its business operations by abiding to rules and regulations set forth by the United States Securities and Exchange Commission (SEC). 
• In terms of international trade, some countries have been imposing higher tariffs on imported automobiles, which reduces demand for General Motors' products.

Economic: 

• The global automotive market has been impacted by the global recession. In North America, there has been a shift from passenger cars to light trucks and SUVs. This has led to a decline in demand for General Motors' cars.
• In Europe, the industry is facing a slow down due to increasing competition from Asian automakers.
• General Motors also faces a tough economic climate in Asia, particularly China due to trade barriers that are being imposed by the Chinese government. 
• Labor costs are on the rise for General Motors. To remain competitive, General Motors has had to increase wages in order to attract more skilled workers. 
• Economic growth is important to General Motors because it impacts the demand for cars. If there is no economic growth, car sales decline and General Motors' revenues will decline as well.

Social: 

• Changes in consumer habits are affecting the automotive market. For example, more consumers are living in urban areas where public transportation is readily available. Many younger workers prefer to use public transportation and would rather purchase a car as a second vehicle.

Technological: 

• The advancement in technology has led to the development of driverless cars, which General Motors is focusing on researching and developing. More consumers would be willing to purchase such cars as an alternative to their everyday commute if they felt safe using such a product. The development of driverless cars would give General Motors a competitive advantage in the automotive market.
• Elsewhere, the advancement in technology is leading to an increase in demand for SUVs and light trucks. For example, many consumers are purchasing electric vehicles because they do not have to fill up their car with gas as often as they would need to fill up their car with a traditional engine.

Environmental: 

• The automotive market is facing pressure to reduce emissions in order to combat climate change. General Motors has been working on developing electric vehicles as well as cars that run on alternative fuels.
• In order to increase its market share, General Motors needs to continue developing environmentally friendly cars that appeal to a wider range of consumers.

General Motors: 

The company's operating model will need to continuously evolve in order for it to remain competitive and sustainable in the future. For example, General Motors needs to continue investing in research and development but should focus on projects that have a high return on investment and can be completed within a short time frame. The company should also focus on improving its manufacturing efficiency in order to reduce costs.

General Motors is also facing increasing competition from the electric vehicle market. In order to remain competitive, General Motors needs to continue investing in this area and developing new technologies for electric vehicles.

Lastly, General Motors should focus on expanding its business operations into new markets, such as India and China. These markets have a large population and present a significant opportunity for the company to increase its market share.

Challenges:

General Motors faces several challenges that could impact its revenues in the future. However, the company also has several opportunities that it can capitalize on in order to remain competitive and grow its business. It is important for General Motors to continue investing in research and development, manufacturing efficiency, and new markets.

General Motors faces a number of challenges that could affect its business operations. Although automobile sales have been strong in recent years, the automotive industry is subject to external factors such as economic growth and technological change which can impact demand for cars. In Europe, the economic crisis has led to decreased demand for cars. For example, car sales in Italy declined by 13.75% in February 2016.

Conversely, Canada experienced an increase of 9% in the number of new vehicles sold between 2015 and 2016 because of economic growth and favorable weather conditions during the winter months that boosted demand for SUVs and light trucks.

General Motors will need to focus on the development of efficient distribution channels in order to keep its market share high versus competition with other automotive companies. The increase in demand for SUVs and light trucks is likely due to the fact that they are less expensive than cars because they are larger and thus require more materials. This has pushed up costs for General Motors.

Electric vehicles are becoming more prevalent in the automotive market, which is increasingly putting pressure on companies such as General Motors to invest in research and development for electric cars. 

While General Motors currently has a large share of the electric vehicle market, it will need to continue investing in this area if it wants to remain competitive versus other companies, such as Tesla.

For example, the company has been working on improving its electric car battery technology in order to improve its range and allow it to charge faster. General Motors is also testing a new type of electric motor that could increase the speed of its cars.

Recommendation: 

• General Motors must focus on producing smaller vehicles that are more fuel efficient and also offer affordable cars in markets such as India and China.
• In order to be more cost effective, GM should also establish manufacturing facilities in these countries to produce them locally. 
• General Motors needs to focus on improving its quality in order to remain competitive. 
• The company should also invest in research and development to create new, more fuel efficient vehicles. 
• General Motors Corporation should focus on establishing manufacturing facilities in low-cost countries to produce affordable cars that are also fuel efficient. 
• The company should also offer incentives to its employees and improve the quality of its products. Unionized workers should be offered incentives such as profit sharing and other fringe benefits. 

References:

Young, J. (2017). General Motors PESTEL/PESTLE Analysis & Recommendations - Panmore Institute. [online] Panmore Institute. Available at: http://panmore.com/general-motors-pestel-pestle-analysis-recommendations.

myassignmenthelp.com. (n.d.). General Motors Case Study: SWOT and PESTEL Analysis of General Motors. Management assignment [Online] Available at: https://myassignmenthelp.com/case-study/general-motors-swot-and-pestel-analysis.html.

‌ Team, M.S. (n.d.). General Motors PESTLE Analysis | PESTEL Analysis of General Motors. [online] MBA Skool-Study.Learn.Share. Available at: https://www.mbaskool.com/pestle-analysis/companies/17985-general-motors.html.

‌UKEssays.com. (n.d.). Evaluation of pest analysis of the general motors company. [online] Available at: https://www.ukessays.com/essays/business/pest-analysis-of-the-general-motors-company-business-essay.php.