SWOT Analysis and Porter's Five Forces

This assignment involves conducting a SWOT analysis of General Motors (GM), identifying its internal strengths and weaknesses, as well as external opportunities and threats. Additionally, it requires analyzing GM's business environment using Porter's five forces model to understand the level of influence of external factors on the company. The report also emphasizes the importance of interrelating with external factors to ensure the company's survival in a rapidly changing business environment.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Different types of organisations and their purposes:..............................................................3
P2 Size and scope of different organisation................................................................................5
LO 2.................................................................................................................................................6
P3 Inter-relation between different organisational functions and how they help in achieving
GM's objectives...........................................................................................................................6
LO 3.................................................................................................................................................7
P4 Macro factors' positive and negative impact on GM..............................................................7
LO 4.................................................................................................................................................9
P5 Identifying strengths and weakness and external analysis of GM.........................................9
P6 Interrelation of GM's strengths and weakness with the external factors:.............................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment consist of macro external factors like political, technological,
legal, economic, and internal factors within the business organisation like employees,
management, customers financial resources which affects the company's operations. The present
report focuses on General Motor, a company originated in America and its headquarter is in
Detroit, Michigan U.S. It is a public company and is engaged in designing and manufacturing
auto mobiles and also deals in financial services. The current report will include different types
of organisations, their size and scope, how the different organisation functions co related with
each other, how external factors affects the General Motor and its SWOT analysis.
LO 1
P1 Different types of organisations and their purposes:
There are different types of business organisations which differs according to their size,
scope, organisation structure and legal structure. They are discussed below:
Public Limited company: Public limited organisations are those which allow its ownership to
the public simply by selling its shares. It is called limited company because the liability of the
shareholders are restricted to the amount they invested in case of winding up of the company.
 These companies are listed on the one or more stock exchanges.
 The company has to have minimum of £50000 allotted shares.
 Receive certificate from the company registering authority.
 Have to use word plc at the end of their authorised name.
 It must have minimum of two directors and a company secretary.
 The shares of plc are freely transferable by trading on stock exchanges.

 It must have Memorandum of Articles and Association which states it bye-laws and
clauses within which it has to work.
Purpose: The primary objective of a plc is to increase the shareholders value and to raise more
capital by issuing IPOs. The secondary objectives include all the goals and targets for which it is
formed.
General Motor is a public company and is listed on NYSE, S&P 100 and 500 component.
Private companies: Private organisation are those whose ownership is not in the hand of the
public and can not issue IPOs for raising its capital but rather arranges it through private
placement of shares, or through the amount contributed by its members(Soniewicki and
Wawrowski, 2017).
 These companies must have at least one natural person acting as a Director.
 Company secretary is optional for private companies.
 No restriction on minimum capital requirements.
 May or may not listed on the stock exchanges.
 Shares of the private company are not transferable.
 Registration with respective companies' registering authority.
 Memorandum of articles and association are compulsory.
 Small business company are given ease in filing accounts.
Purpose: The primary objective is to survive and increase the profits margins and enlarge its
market share.
Voluntary organisation: These are the companies that are formed to serve the social needs
which are not met by the other two types. It is bunch of people who comes together to
voluntarily form an organisation which will work to achieve its objective.
These companies file a declaration to the appropriate authority that the company will
solely and purely work towards the purpose for which it is formed which is a social cause. For
example charity, trust.
Purpose : The basic purpose is to serve society and work for social benefits.

Not Government Organisation: Often called as NGO which works for the betterment of the
society and is not owned and controlled by the government however, receives its large finance
from the government.
Not for profit organisation: These companies does not have the objective of making profits and
whatever the earning are there, are headed towards the charity or for a cause it has undertaken. In
simpler words, no profits of the company are distributed to the members or investors.
P2 Size and scope of different organisation
The size and scope of the public, private and voluntary organization are compared by
taking an organisation from each sector.
Size of Public Limited company : General Motors corporation is a public company and
currently have more than 170000 employees in the world. It had a total revenue of $146.365
billion in the year ending September 2018.The value of the assets of the General Motor
corporation was $212.482 billions in 2017.
Size of Private company: John lewis Partnerships is a private in U.K. which has an employee
strength 86700 in the year 2017.It had a revenue of 11 billion pounds a total assets value in the
September 2017 were 6286 million pounds.
Voluntary organisation size: Oxfam is a British Voluntary organisation and is made up of 20
independent associations working for the cause of elimination of poverty in the world. It has
about 750 charity stores in U.K. It generates its income by selling second hand books and uses it
for the cause of eradicating poverty. It largely raises its funds from government, contribution
from people. The income in the year 2017 was 408.6 million pounds and have around 5000
employees and utilised 23000 volunteers.
By looking at three types of organisations above, it has emerged that public companies
are the largest whether it is the number of people it has employed or the revenue it generates or
the value of assets it maintains(Belás and et.al., 2014). General Motor Corporation is large
organisation as it is public company, meaning more capital is invested in it by large number of
people by purchasing company's shares on stock exchanges. On the other hand, John Lewis
Partnerships being a private organisation is not as big as General Motors in relation to the
overseas operations, its capacity to expand more internationally is also less than latter. Lastly the

voluntary organisation Oxfam is smallest of all. The number of employees is very less than
public and private company. Also, it does not work for the profit motive, the revenue of the
Oxfam is not even comparable with the other two.
Scope of public, private and voluntary organisations:The scope of General Motor
Corporation is wide in terms of its international presence in every continent. It is either
collaborated with other companies or has its subsidiarity operating worldwide. It provides wide
range of vehicles and is also active in providing financial services.
John Lewis Partnerships have 51 stores in the U.K. along with online business have
relatively narrower scope in terms of international operations.
Voluntary organisation Oxfam operates its business only in UK but uses its earning
worldwide for the social cause. So this way it has wider scope in serving people in the world, but
narrowest scope when compared to other two regarding the international business.
LO 2
P3 Inter-relation between different organisational functions and how they help in achieving
GM's objectives
Every department in the General Motor Corporations works together to achieve its goals.
Every division coordinates and cooperate with other to ensure harmony and efficiency in the
company. The different functions are given below:
 Production and Purchasing :Production department is concerned with the
manufacturing of the products and services of GM and purchasing is concerned with
procurement of raw materials, management of inventory, management of supply chain.
For example purchasing department keeps inventory of raw material so to ensure that
production process doe not get hamper in case of lack of raw materials at right time.
 Marketing and Accounting: Marketing and accounting is very closely related to each
other in General Motors as the funds requires by the marketing department for effective
promotional and advertising campaigns are approved by the finance and accounting
department after proper scrutiny of the available funds and if the funds are approved then
how much the company will be able to recover against the approved funds and

accounting of the same is done by the managers as the advertisement expenses are very
huge and it has its effect on the company's future profits.
 IT and Operations:Operation department is largely dependent on IT department of GM
as being cost effective is one of the main objectives of the company. IT department
makes the functioning of day to day activities very smooth and makes the other
department more efficient and effective(Istrat and et.al.,2016). Bringing new technology
in the daily operations helps the operation department to deliver its best to the customers
according to their requirements at the right time which increases the overall performance
of the General Motors.
 Research and development and finance :R&D is one of the most important department
of GM as this department is responsible for conducting research and innovation which
can be brought into the company and this involves huge expenditures. R&D can be
carried out only if the company have sufficient amount to provide the department with
adequate infrastructure, skilled personnel and other necessities. Finance department is
responsible for arranging the enough funds so that R&D department works seamlessly.
All the departments are dependent on each other. They cannot operate individually on their own
without the help from other departments and this coordination between them ensures the success
of the auto mobile giant General Motors in achieving its goals and objectives.
LO 3
P4 Macro factors' positive and negative impact on GM
There are different macro factors that affects the business operations of GM that are given
below:
 Political factors: Political conditions of the countries in which GM is operating affects
greatly its business operations as the stable political conditions positively impacts the
company(Wetherly,2014.). If the political conditions are not stable, high level of
corruption is existing in the operating countries, globalisation opposed political parties
will negatively impact its operations worldwide.
 Technological Factors: Auto mobile industry is confronts the problem of technology
obsolescence very often. Belonging to this industry GM's business is affected by the

technological factor significantly. Excessive automation in the company will lead
retrenchment of employees which will directly harm its image and brand value. Likewise,
installation of new technology in its products will increase the interests of the customers
and it will impact the profitability of GM in a positive way(Botha, Kourie, and Snyman,
2014. ).
 Economic factors: There are various economic factors that affects the GM's business
operations like purchasing power of the customers, GDP of the country, economic
growth, interesting rates prevailing in the country, inflation rate, exchange rates. As GM
operates in many countries, the exchange rates largely affects the daily operation of the
organisation. Profitability ratio also differs due to change in exchange rates on daily
basis. This have a negative impact as it disturb the stability in profitability of the
company.
A country in which GM has its business, if consumer's purchasing power is more it will
positively impact the functioning of GM and hence it will be shown in its financial results.
 Legal factors: Rules and regulations related to auto mobile industry greatly influence the
GM business. If there are very rigid laws relating to consumers which unnecessarily force
big companies to serve its products and services, it will increase their cost of operation
and this will negatively impact the business of the company.
If a country has healthy competition laws, which prevents big firms to play dirty politics has an
overall positive influence on all the companies in the industry and also on consumers as the
healthy competition will control the prices of vehicles in the market.
 Environmental factors: Climatic conditions, pollution, convenience of getting
biodegradable raw materials affects the GM in its operations. Strategies regarding waste
disposal, weather conditions will be formulated by critically analysing these
factors(Belás, , Bartoš, Habánik and Novák, P., 2014).
 Socio-cultural factors: In the country where consumer preference, social beliefs,
education level are all good, it will have positive impact on the sales of the GM's
products as compared to the places where people are uneducated or have disputed
societies, or high wealth disparities.

LO 4
P5 Identifying strengths and weakness and external analysis of GM
SWOT analysis will determine the internal strengths and weakness of the company.
Strengths
 The Biggest auto mobile giant in the
world.
 GM has tremendous brand image.
 Operating on large scale therefore cost
effective operations.
 Pool of expertise and skilled workforce.
Weaknesses
 Lack of diversity in the operations
 Centralisation in decision making.
 Unable to grab the markets in
emerging nations.
Opportunities
 Making organisational structure
decentralised to encourage creativity.
 Market expansion in developing
nations.
 More technology.
Threats
 Cut throat competition in international
markets.
 Government's unfavourable rules and
regulations
 High frequency of technology
obsolescence.
GM's external analysis can be done by using Porter's five forces model:
1. Competition: GM faces intense level of competition in the automotive industry because
of the large numbers of firms in the market and their tendency of following cost
leadership strategy (Otache and Mahmood, 2015)
2. Bargaining power of GM customers: Customers have fair level of force in shifting
from one brand to other.
3. Bargaining power of GM suppliers: Sufficient amount of supplier has kept the force at
moderate level.

4. Substitutes: Not many options as substitutes has medium force for the GM.
5. Threat of new entrants: High entry costs and barrier has made this force low for GM.
P6 Interrelation of GM's strengths and weakness with the external factors:
 Brand Image: GM enjoys very good reputation in the global markets. But when the
political factors in any of its operational countries changes it has a critical impact on its
bran image(Tolba,2015.). Like very recently GM withdrew its operations from Indian
market and this incident had an advert impact on the brand image and also the stock value
of the company was affected.
 Large scale economies: General Motors Corporation is the largest company in the
industry which is why it has an advantage of economies of sales which in turn lowers
their operating cost and also the per unit cost is lowered. However, if any country
economic factors like slow economic growth or high inflation rate will make the raw
materials expensive in general. This can convert GM's strength into a matter of threat.
 Lack of diversification in products and services:GM mainly relies on its auto mobile
business for its survival in the industry. This is one of the weakness of the company. If in
any country technology barrier occurs and the company is unable to incorporate more
advanced technology due lack of funds or due to some government's rigid rules, it might
become difficult to operate its business in the country and backing out means heavy
losses for GM. So GM should carefully analysis its weakness in relation to technological
factors in the business environment(Fleisher and Bensoussa., 2015.).
CONCLUSION
From the above report, it has been summarised that GM being a public traded company
has a very vast size in its operations. It was seen that the company works in a very dynamic
business environment. The internal factors like customers, management and external factors like
political, legal affects the company's operations. GM's internal strengths and weakness are found
out by the SWOT analysis model. The level of forces it has upon it was determined by Porter's
five forces method which identified its external factors level of influence on it. Interrelation with
external factors also gave an insight that GM should work on its weaknesses and how they
should not take their strengths for granted.

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