Gm Business Environment

2953 Words Dec 24th, 2011 12 Pages
1. INTRODUCTION OF GENERAL MOTORS

1.1 Brief introduction
General Motors Company or better known as GM is an American multinational auto manufacturing corporation traded as NYSE:GM, TSX: GMM. Its headquarter is in America.

The company was found first in 1908. In 2008, the major recession and global credit crisis drove car sales to near depression levels and dried up private sources of capital. GM, critically short of operating cash, received a bridge loan from the U.S. Treasury, under conditions that the company further accelerate a tough restructuring of its operations that had been underway for several years [1]. General Motors Corporation then filed for bankruptcy on June 1, 2009. In June, 2009, with a support from the U.S. Government,
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2. GENERAL MOTORS’ BUSINESS ENVIRONMENT ANALYSIS

2.1 External environment - PESTLE
To analyze the impacts of external environment on GM’s business, the framework PESTLE will be used. “The PESTEL framework categories environmental influences into six main types: political, economic, social, technological, environmental and legal.” (Johnson et al., 2010; p55).

- Political factors: More laws and regulations are applied in different countries due to the economic downturn, import policy, fuel policy and consumers’ concern for environment and safety. For example in tax policy for importing cars in Vietnam is very high 100% - 200%. In some poor countries where GM has office or branches, politics problems also affect auto industry.

- Economic factors: the economic downturn, inflation and unstable exchange rate have reduced the spending power of consumers. The credit crisis in Europe and economic problems in many other countries.

- Social factors: many people are jobless and reduce their spends or change the demand of vehicle. The gap between the rich and the poor is bigger and bigger in the world. Owning and driving a car shows the owner’s wealth and social status. Moreover, more people like environmental friendly vehicle.

- Technological factors: Technology is changing everyday and it requires the company to be updated and be more eco-friendly due to the trend of consumers. Many people have habit of using internet to look for a car before going