In General Motor (GM) in relations with their external environment, there are many elements in which (GM) as a company will have no control over when conducting it business. In the “Five Forces Model” , Michael Porter provide an suggestion and analysis regarding the forces which companies like (GM) will have no control over such as: 1. Who their immediate rivals will be, 2. Who the potential entrants are, 3. their customers, 4. suppliers and 5. Substitute products that will be purchased over (GM) product” (Heizer & Render, 2011).
General Motors produced cars, trucks, and leases vehicles to dealers who can sale their products. They are the producers of the brand name cars that people have grown to respect and love in an automobile, like the “( Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Opel, Isuzu, Vauxhall, Jiefang, FAW and Wuling) autos; GM market their products in China, the United States, Brazil, UK, Germany and Canada)” (Thomson One Banker, 2012).
1. Immediate Rivals
with all the cars that General Motors current has, they have rivals who compete fiercely with General Motors. Their competitors are Porsche Automobile Holding SE, the maker of foreign autos. It was quite surprising to learn that (GM) only has one (1) major competitor list in the “Thomson ONE business financial”.
2. Potential Entrants
The potential for other entrants coming into the automotive industry are highly unlikely given (GM) owns many of the pretty nice autos, along with an unstable economy and the rising costs associated with the price of gas, the market will influence business owners and consumers into not purchasing items like cars and truck due to the higher than normal costs associated with owning new vehicles.
3. Their Customers
General Motors (GM) competitors which compete against them have higher P/E than do (GM). General Motors competes against other manufacturers of vehicles in the automotive industry however; their competitor, the makers of the Porsche target market is geared toward appealing to the wealthy consumers, who have taste and finer luxury automobiles. General Motors customers will not find Porsche attractive given the price of the car is unaffordable however; the higher than normal price to pay for gasoline, (GM) we find that it will have to restructure its cars to run more fuel efficient.
4. The Suppliers
GM and other manufacturers such as (Mindset Holding Co., Zenn Motor Company Inc. and Zeons Corporation) that supply’s (GM) with supplies, and other industrial Machinery needs. These (3) companies have the ability to charge higher prices for their good being sold to (GM) and its competitors to offset their increase costs associated with producing supplies for GM and others.
5. Substitute Products
General Motor branded name is a household name, as the price of fuel increase consumers will be force to eliminate items he or she may not need and this will include (GM) bigger cars. The less fuel efficient autos will be replaced by scooters, public transit, bikes, and/ or will demand the consumers travel less often.
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Topic: General Motors
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