Automotive Industry External Factor Evaluation (EFE) Matrix

In the first column lists key external factors, namely opportunities and threats. These key external factors are derived from tine external-audit process including the opportunities and threats exercise, the CPM (competitor analysis), Porter’s Five Forces, the industry life cycle, and profit pools.

Automotive Industry Competitor Analysis (CPM)

This competitor analysis, or CPM, identifies the competition and their strengths and weaknesses vis-à-vis GM’s strategic positions. These strategic positions are the critical success factors needed to make companies in this industry successful. They span both external and internal territory.

Automotive Industry Opportunities and Threats

Note that the opportunities and threats are external, and these are forces which apply to every firm in GM’s industry with similar scope and planning units that sell vehicles in the US.

The reason a TOWS analysis (threats, opportunities, weaknesses, strengths) is not done here is that we are only looking at autonomous, external forces (meaning industry forces). These are not specific to GM or any car firm. As such, strengths and weaknesses do not apply.

Automotive Profit Pools Analysis

Automotive Industry Life Cycle

This section addresses the automotive industry in the US. The potential customer base is large and broad and ranges from individual private buyers, to corporations and small businesses.

The car industry has reached maturity in the US. Cars have been around for more than a century (so has GM) and almost all adult Americans own one or more cars.

Autonomics refers to the changing landscape of automobile economics. Broadly speaking, autonomics embodies the current zeitgeist of the car manufacturing industry and how it relates to global macroeconomics. Some of the topics it covers are:

• The financial crisis, the credit crunch, and bailouts
• Globalization, outsourcing
• Technology and technomics
• Consumer expectations and needs

Like many of the massive financial institutions in the US that collapsed in the Fall of 2008, General Motors is said to be "too big to fail". However, declining sales and profits have lead to talk of the US government bailing out General Motors. This is in addition the the colossal $25 billion loan the US Congress gave the Big Three, GM, Chrysler, and Ford. Now, the Big Three are asking for $50 billion.

The automotive industry is experiencing significant economic shocks from the recent financial crisis. This is especially true in the US with the Big Three. A declining quality of American cars coupled with a lack of credit in the US put considerable drag on the car industry.