Political Factors
The political factors which are affecting the effectiveness and performance of General Motors are revealed in this analysis. This Pestle analysis encompasses the effects of political or governmental institutions and their policies on the working of GM Corporation. The automotive manufacturer is prone to these political environments acting externally on the company:
- Public transport promotion by political policies and institutions (threat)
- Imposition of taxes on non-renewable/combustion-ignition automobiles (threat)
- Stable macro-markets in Developed Polities (Opportunities)
The company is vulnerable to government policies that promote the use of public transport to reduce the burden on the environment by discouraging the use of fossil fuels. These policies promote the use of shared vehicles instead of private vehicles. The promotion of buses or trains harms the sales of GM Corporation. Furthermore, the imposition of heavy taxes on private vehicles to discourage their use aggravates the threat. However, the politically stable and rich economies are opportunities for the corporation. These mega markets have the potential to increase the revenues of the company. Therefore, GM Corporation must address the threats given in this Pestle Analysis to enhance the company’s business and revenue.
Economic Factors Significant to General Motors
The company is facing certain economic opportunities as well as threats. These prevalent economic conditions are responsible for the overall growth of the company. Economic factors which are imperative to the future of the company and are present in the external working environment of the company are discussed in detail. The elements below are important to the corporation’s working in the automotive sector:
- Excessive market growth of developing states (opportunity)
- Stable macro-markets in Developed Polities (Opportunities)
- Aggressive competition throughout the emerging markets (threat)
The above-stated external factors are responsible for the growth or retardation of GM Corporation’s business. The rising growth of developing states’ markets is an opportunity for the company to explore and expand. For instance, the rapidly emerging economies of developing nations like Pakistan and Indonesia are still an opportunity for GM Corporation to exploit these regions. In the same way, stable macroeconomics of the developed regions like Europe or the US give a stable opportunity for the company to grow its business. On the contrary, the countries whose economies are struggling to flourish provide the opportunity to grow and threats of aggressive competition as well. The rival automobile industries, along with the local manufacturers, can pose serious threats to the company in these regions. So, General Motors must address the challenge of competition, and it must incorporate policies that can cash the available opportunities available in the external working environment of the company.
Social Factors affecting the company’s Business
The social factors which are affecting the company’s business are considered deeply in this Pestle Analysis. General Motors is facing opportunities along with the threats by these externally acting elements. The sociocultural factors relevant to buyers as well as employees are discussed in detail.
- Promotion of Electric Vehicles future (EVs) (opportunity)
- Promotion of Self-Driving units (opportunity)
- Promotion of Public Transport or Vehicle-sharing (Threats)
The coming age manifests the promotion of electric cars due to their eco-friendly and less expensive use. These newer demands by society provide a great opportunity for General Motors in terms of growth. GM can grow and expand by introducing electric vehicles into the market. This new trend entails growth and business opportunities for the company. In the same way, the increasing ambiance of self-driving vehicles holds massive growth opportunities for the company. GM Corporation can grow its business by manufacturing and selling these vehicles. In contrast, the promotion of public transportation and the use of shared vehicles is a threat to the company. This idea carries immense potential to reduce the demand for vehicles by the customers. Therefore, this segment of the analysis revealed the opportunities which can be realized by innovation and the threats which can be addressed through proper policy formulation and implementation.
Technological Factors Prevalent in GM Business Environment
This segment of Pestle Analysis shows the significance of technological and innovative strategies which can contribute to enhancing business for GM Corporation. Extensive growth opportunities are available to the company if it undergoes technological/innovative trends and actions. The external factors relevant to technology are listed below:
- Self-driving technology implementation (opportunity)
- Efficiency in terms of fuel consumption of vehicles (opportunity)
- Electric vehicles technology growth (opportunity)
The opportunities are available to GM Corporation in the technological aspect of the environment. These external factors are relevant to the technological capability and enhancement of the company. General Motors has laid its vision and mission in terms of tech and innovative growth. For instance, the company can benefit from the new wave of self-driving car technology by implementing such policies. Moreover, the new trends of opting for fuel-efficient vehicles can be explored by the company. Therefore, General Motors must strengthen its technological aspects to raise its business and growth by successfully developing electric motors and fuel-efficient vehicles. In this way, the corporation can address the rising trends in the automotive industry. Therefore, General Motors can enhance its business and revenue through innovation and through strengthening its research and development.
Environmental Factors
The ecological and natural trends signify many new trends in the automotive and industrial sector. This segment of Pestle Analysis reveals those environmental concerns which can shake supply chains, available resources, and the usage of products. The following environmental factors are prevalent in the external business environment of the industry:
- New Climate Pattern trends (opportunity)
- Concerns about the effects of automotive emissions on air quality (Opportunity)
- Sustainability of business (Opportunity)
The company must adhere to providing solutions to the ecological concerns of the people and governments regarding the automotive industry. The company can address these climate change threats by introducing smart, hybrid, and electric vehicles in the automobile industry. This new technology has the potential to address concerns about air quality. Furthermore, the firm can strengthen its sustainability as well as a brand image by addressing these concerns, thus adding a long-term benefit to GM Corporation. In this way, the company can address environmental issues along with addressing social concerns about the new trends. These ecological factors, which are discussed in detail, are crucial for the company to consider.
Legal Factors Affecting General Motors
Any corporation running the business has to address the legal concerns of the governments and their institutions. Any company is affected by the prevailing laws as well as by the regulations imposed by the governments. They also pose significant checks and limits on the businesses. The legal factors which have the potential to affect business growth and development are given below:
- Automobile safety regulations (Opportunity)
- Vehicle-emission Regulations (opportunity)
- Environmental Regulation and Laws (opportunity)
The company has the opportunity to grow by following the safety regulations. In the same way, intense regulations related to emissions are another opportunity for the company to improve the quality accordingly. In this regard, the company can adopt new safety regulations to increase its sustainability and brand image in the long term. Therefore, by addressing the law and regulations effectively, GM Corporation can improve its business and long-term reliability in the competitive market along with the smooth functioning of its business.
Summary and Recommendations
The Analysis has revealed immense opportunities for the company to expand it is business and growth. For instance, the corporation can enhance its business by addressing innovative and technological revolutionary trends. This Analysis has further exposed the significance of reformed policies. The expansion of the company’s business into the growing markets is another significant opportunity for the company. The company needs effective strategies to successfully exploit the available opportunities.
Furthermore, there are some threats prevalent in the external environment of the company. For instance, the company must address the regulation, and consumers’ behavior treats to run the operations smoothly. Air quality and vehicle threats, along with the threat of rising competition in the automobile market, are the issues that the company must address in earnest. Below stated recommendations are advised to implement in the company’s policy based on this Analysis:
- The company must strengthen research, development, and innovation to address the latest trends in hybrid and electric cars.
- GM must advise strategies to enhance its network in developing markets to exploit growth opportunities there.
- The corporation must advise policies that address ecological threats and, in turn, would enhance the company’s brand reputation and sustainability.
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