Market Analysis of General Motors

MANAGEMENT
ECONOMICS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Overview of Company, with its products/services description, along with historical data1
2. Market Analysis of General Motors...................................................................................2
3. Characteristics of past and current market structure of General Motors............................5
4. a) Critical analysis on different market structure to identify optimal structure for General
Motors in automotive industry...............................................................................................5
4. b) Find impact of lesser or greater government interventions in terms of societal benefits6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Managerial economics refers to a concept of management of business capital, resource,
income and expenditure in a profitable way. In order to resolve any business related issue, this
concept deals with various economical concepts, theories and methodologies (Khot and
Thiagarajan, 2019). For this purpose, to take any financial decision, managers of a firm can use
economic theories with past data, that helps in estimating current and future progress as well. In
order to understand, how different tools and theories of economics can be applied to manage
business, a report is presented below where, automotive industry is targeted. For this purpose,
General Motors Company is chosen, which is considered as one of the largest automobile firm,
that offers a range of commercial vehicles and automobile parts. To analyse its market condition
and structure, in which this company operates, an in-depth investigation is done, that helps in
exploring its historical data. This data is used to analyse market structure in the form of
monopolistic and oligopoly is critically examined. Along with this, suggestions for greater or
lesser government intervention upon production of this firm are made for beneficial of society.
MAIN BODY
1. Overview of Company, with its products/services description, along with historical data
The automotive industry is one of the major industrial sector, where changes has done
more rigorously and forces economic worldwide (do Carmo, Neto and Donadone, 2019). This
industry contributes a large revenue in developing economy of a nation, by producing and
distributing millions of cars, trucks and other transportations in a year (Mason, 2019). Despite
the fact about larger organisations who have struggled with a number of business issues with
overcapacity as well as low profitability, organisations that deal in automotive industry always
retains strong influence over marketplace (Chuang and Zhao, 2019). Moreover, it has also heavy
linkages with various supplier industries in manufacturing vehicles. Along with this, having a
strong political influence, automobile industry is also responsible for giving employment to
millions of people, either directly or indirectly that also contributes for society development
(Severino and Godinho Filho, 2019). In context with General Motors (GM), this multinational
corporation of America is headquartered in Detroit in the year 1908. It operates business in more
than 37 countries, where its core branded vehicles include GMC, Chevrolet, Buick and Cadillac
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(Hong-jie, 2019). In terms of sales, volume of cars of this firm has been reached to a milestone
of approx. million vehicles annually.
At initial period, automobile industry that is commercial and both private vehicles were
dominated by steam-powered vehicles (Jin and McKelvey, 2019). Therefore, they were much
expensive as well as difficult to maintain so, only people of upper classes can afford to buy such
product. But with development of technology, now, vehicles are available in a wide range and
within range of people budget. Along with this, when GM has started its business then
competition also not high, because manufacturing such product requires large amount of capital
and labours with high technology (Khot and Thiagarajan, 2019). Till 1960s to now in 21st
century, there was a rapid development in manufacturing process and production, that adds more
features in vehicles and provide more safety to people during their journey. A milestone in
context with history of automobile industry, the innovations can be defined in terms of efficiency
in fuel injection processes, with independent suspensions and turbochargers (Hanley, Shogren
and White, 2019). Along with this, with Computer Aided Design (CAD), autonomous
technology, laser sensors, Artificial intelligence and more, has made it possible to run vehicles
cars with fuel efficiency and driverless as well (Thampapillai and Ruth, 2019).
2. Market Analysis of General Motors
General Motors is a global automobile company which makes and sells a number of
commercial and private vehicles including cars, trucks and other automobile parts in various
companies (Khot and Thiagarajan, 2019). Apart from automotive products, this firm also
provides financing services in terms of automotive via GM financing company. This company
sells its products directly to end customers by wide network of dealers that helps in generating
high revenue as well. The global wholesale market in terms of sales, in 2016, revenue of GM
has reached from 5.9 million to 6.25 million as compared to previous year (do Carmo, Neto and
Donadone, 2019). Along with this, it has evaluated that within wholesale market, the share of
respective firm in the area of US has touched to 17% in 2016 while, in other area i.e. North
America it covers 16.6% (Chuang and Zhao, 2019). But with increasing competition, due to
presence of large brands like Volkswagen and others, there was a small decline of sales has also
observed. Another main market, where global presence of GM has seen in terms of revenue is
China, where it has grabbed 13.8% of total sales revenue (Strategic Analysis of GM, 2018).
Despite of other markets like UK, China, Asian countries and more, the area where GM has
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