Nonetheless, results to increase in company’s core brand dilution.

Nonetheless, in comparison to key competitors, like
Ford’s, its’ revenue was 55.5% in the US market while Toyota received 41.9%
from Japan. The fact is that majority of GM revenues is generated from the US,
however, economic change, demand and reputation may pose a weakness to GM. 

 

Chart 1: GM’s country by country revenue (Jurevicius, 2016)

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

 

2. Brand Awareness

Research argue that, huge brand portfolio results to
increase in company’s core brand dilution. In addition, GM uses other brands
names and not its own company name. Consequently, Toyota, Mercedes-Benz, BMW,
Honda, Ford, Hyundai, Volkswagen, Nissan, Porsche, Kia, Land Rover, Mini, and
Tesla, out rank GM in brand recognition, despite being the 2nd the largest auto
manufacturer in the world (Interbrand, 2016).

 

3. Reliance on Pickup
trucks and SUV’s for Profits

Research shows that GM heavily rely on SUVs and pickups as
their main source of profits. Despite a balanced brand portfolio e.g. the
small, mid-size and large cars, crossovers, SUVs and trucks, the US market is
largely influenced by only two brands. The GMs success of high profits margins
is attributed to the popularity of SUVs and Trucks. As-a-result, related
studies indicate the popularity in the US of these two segments have caused a
growing segments of GM brand in the whole of the automotive market. Therefore,
due to the consumers’ preference in these vehicles, which is due to low petrol
prices.  Consequently, the dependency on
these two factors are always bound to change (General Motors, 2016). 

Opportunities

Low
fuel prices are increasing the demand for pickup trucks and SUVs

Related studies imply that for the last decade the trend
in fuel prices are likely to remain low, as a result, encouraging customers to
buy big fuel-efficient vehicles such as the SUVs and pickup trucks. Moreover,
an opportunity that GM can maximise in this growing market for these vehicles
translating this growth to profits (Jurevicius, 2016). 

 

2. Timing and
Frequency of the new Model releases

Related studies in the history of automobile industry,
upgrading of car brand and new model car release is normally done every 4 or 5
years. Therefore, timing and frequency of new models is significant. However,
the in-car technology and competitiveness of the automotive industry, has
increased pressure due to raising of customers’ expectations have urged the car
manufacturers to upgrade the auto models frequently. Interestingly, GM is
capable to produce and exceed these expectations due to its’ position (Jurevicius,
2016).

 

3. An
increase in the demand for autonomous vehicles

Related studies imply, that the current trend is towards
autonomous vehicles. In fact, GM has been busy purchasing and acquiring
self-driving technology start-ups and patents, so that it works and plan to
introduces autonomous vehicles launch by 2020. Moreover, the sophisticated
technology of GM acquired through, the OnStar assistance has established a
transitioning path to driverless cars.

 

Threats

1. Increased
competition

Researchers argue that GM competitors have been on the
rise in home markets, new players with innovative products like google, and
Tesla as well as the traditional automotive companies. More competition in
Chinese market has been increasing of the local Chinese manufacturers who have
alternative lower price with similar standards quality build vehicles.

Additionally, electric and autonomous driving technology are innovations that
compete directly against GM and a threat to traditional automotive industry.

Moreover, research emphasised that, in 2015 there was production of vehicles of
31 million in excess, which was as a result of, competition, increased global
automotive production capacity far exceeded demand (Jurevicius, 2016).

 

2. Cases of
Fluctuation of US currency due to the rising dollar exchange rate

Researchers argue that currencies can be volatile and
international companies like GM, are predisposed to it. Therefore, company’s
profits and revenue are highly depended on the fluctuation of exchange rates.

This implies that any changes in the currency in this case US dollar, GM
profits and revenues will be significantly influenced, for examples, in cases
of US dollar exchange rate rise.  In
fact, 37% of GM revenue is from global market, thus, during dollar conversion
and fluctuation of the dollars there would be an impact on the GM’ profits and
revenues (Jurevicius,
2016).

 

3. Increasing
government regulations may raise the costs

Related studies argue that, there has been increase in the
sensitivity and commitment to reducing of greenhouses gas emission and finding
alternatives to fuel efficiency initiatives. The downside aspect of such
initiatives may increase production costs in automobile production.

Consequently, such cost are high posing challenges such as high competition and
price-sensitive marker to recoup (Jurevicius, 2016).

 

4. U.S. automotive
market is poised to slow down or even decline

Researchers argue that, due to the saturated markets, the
automotive market growth in the US is declining. In addition, an emphasis
through a research done by Ford and GM indicate for a fact, that the sale of
new cars in the US market is declining continually. Despite the good
performance of the automotive industry in the 2015 and 2016 whereby new car
sales increased on average of 6% in each these two past years, since the worst
case scenarios since 2007 (Pugliano, 2016).