Introduction
General Motors (GM) is an American-based company that manufactures motor-vehicles, as the name suggests. It is an international company, meaning it has manufacturing plants in various global regions and offices in a majority of the countries (General Motors). According to O’Callaghan, the company was ranked the leading carmaker in the 20th century (133). However, in the recent past, the company’s reputation has declined, thereby affecting its productivity and profitability. The company has employed different techniques to curb the competition and the damage caused by the poor public image. In this paper, GM’s current reputation, market situation, and SWOT analysis will be presented and analyzed.
GM’s Current Reputation
Currently, General Motors does not have a positive public image. However, the management has been keen on solving some of their challenges to restore a more favorable reputation in their markets. One of the main things that led to the destruction of the company’s image was the ignition switch crisis that led to the death of 100 people. The situation was made worse by the fact that the company initially denied knowing about the faulty ignition. However, evidence showed that the company knew about the defective ignition seven years before the tragedy (Siebert 76). It can be argued that the inadequate response to the crisis at the time led to further damage to the company’s reputation.
Market Situation
In spite of the bad reputation GM has suffered over the years, the company still plays a prominent role in the automobile market for premium sedans and mid-sized models. Some General Motors models such as Buick Excelle and Cadillac have attracted loyal followers due to their prestige. Onishi argues that GM has greatly benefited from loyalty, where clients are loyal to a model rather than the company itself (95). The scholar goes further to explain that models that can be traced back to the mid-20th century still have loyal customers as compared to the newer models. Nevertheless, the company still faces stiff competition.
More people are buying other models and brands due to the poor reputation of GM vehicles (Siebert 77). O’Callaghan explains that GM has managed to remain afloat due to penetration of third world markets (133). The company has heavily invested in third-world countries but has lost many clients in first-world countries (Onishi 95).
SWOT Analysis
The following is a discussion of the strengths, weaknesses, opportunities, and threats that GM will face due to its reputation.
Strengths
Strong Brands
The company has strong vehicle brands. For example, the Buick model attracts some of the wealthiest people in the world. Looking at the American vehicle culture, it is obvious that customers prefer classics over new cars. Thus, the Buick model, which is one of the first models by GM, is a favorite to many.
Global Market Penetration
GM has an enviable global market penetration. Unlike its competitors, the company has invested in developing countries. They have managed to create a niche and, in some countries, are even considered a monopoly in the market (O’Callaghan, 133). This has positively affected their sales records.
Human Resource Expertise
GM has carefully invested in its human resource. The company has highly competent professionals in almost all departments. This is described as a strength because it ensures the quality of products and good customer service.
Weaknesses
Some of the main weaknesses that the business faces include, but are not limited to:
Fewer Brands in Developing Countries
As stated, the company has a strong presence in the developing world. However, many of the brands in the said countries are similar. According to Onishi, GM mainly provides low-cost and average performing vehicles to third world countries (96). Thus, clients who want to purchase high-performing vehicles have to rely on GM’s competitors.
Bureaucracy
The company’s organizational structure is very rigid due to issues of bureaucracy (Onishi, 96). This means that the processes are not only slow but can be very ineffective due to poor and long decision-making processes.
Opportunities
Expanding Global Markets
The third world countries have better disposable incomes than before and can afford the luxury cars that GM is famous for. This is a great opportunity for the company to make profits in the said countries.
Advanced Technologies
The automobile industry is ever-changing. The advancement of technology makes it easier for companies in the field to produce better vehicles at a cheaper and faster rate.
Threats
Increased Competition
There are many players that have penetrated GM’s strongholds. Additionally, the company continues to suffer from a negative company image.
Public Transport
More governments are advocating for the use of public transport to help ease traffic concerns. Such governments have made public transport more effective, thus, attracting many users. This affects GM as fewer people are interested in buying their vehicles as the public transport system offers better services.
Untested Technologies
It is challenging for the business to test all new technology. It is such ignorance that led to the ignition switch crisis that tainted GM’s reputation.
Conclusion
In conclusion, one can argue that GM needs to strengthen its market position by providing high-quality vehicles. It is incontestable that GM will face stiff competition from intimidating German and Japanese automakers. The additional fact that the company has a bad public image makes it more difficult to achieve its sales objectives. However, with proper crisis management techniques in place and quality and reliable products, the company can go back to being a favorite automobile brand in its markets.
Works Cited
General Motors Company: Building the Future. General Motors, 2018. Web.
O’Callaghan, Terry. Reputation Risk and Globalisation: Exploring the Idea of a Self-Regulating Corporation. Elgaronline, 2016.
Onishi, Hiroko. Well-Known Trade Marks: A Comparative Study of Japan and the EU. Routledge, 2015.
Siebert, Daniel. The Dilemma Between Quality Reputation and Risk Prevention: Warranty Provisions for Car Manufacturers. Anchor Academic Publishing, 2014.