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 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.

It was a tough road Wagoner faced ahead. GM was on the brink of failure, in massive debt, all under his watch. Retirement packages weighed heavily on the company and layoffs were happening with more on the horizon. The much-profitable SUV segment was dying, and compact and mid-sized cars were not profitable. Nevertheless, Rick had vowed to stick it out and see the company through to recovery.

The Porter’s Five Forces analysis is designed to evaluate the competitive forces in the industry the firm operates. If it determines that the combination of forces in the industry act to reduce profitability, it is saying the industry is unattractive. Even worse is an industry close to total competition.

Considering the unusual and difficult economic conditions facing General Motors, a strategic analysis is needed. This will help the ailing automaker chart its path to recovery (if there is one).

A strategic analysis is composed of the following elements:

• Firm's mission statement
• Firm's objectives
• External audit using:

General Motors - Overview

General Motors, or GM, was the largest car producer in the world for 77 straight years. Between 1931 and 2008, GM sold more cars worldwide than any other firm. In 2008, GM was surpassed by Japanese car giant Toyota.

In early February, GM released news that its brand Saturn “could be dead within the week.” General Motors has received billions in dollars of government loans in an effort to save the ailing car brand. One of the conditions of that loan is that GM must put forth a business plan outlining what it will do with each of its brands.

Just a short four years ago, GM was considering buying a major share in FIAT, but FIAT was not so attractive to GM.

General Motors is the fourth largest carmaker in the world based on global sales, and employs 266,000 people. It is the second-largest in the Fortune Global 500 list. Also known as GM, it was founded in 1908. Its headquarters are in Detroit, Michigan.The GM brands are:

• Chevrolet
• GMC
• Buick
• Cadillac
• Pontian
• Saturn
• Opel
• Saab
• Wuling
• Vauxhall
• GM Daewoo
• Holden
• Hummer