General Motors - External Environmental Analysis Assignment

General Motors - External Environmental Analysis - Assignment Example The auto industry has always been vulnerable to economic fluctuations, and with the volatility of fuel prices growing by the day, GM and other companies are always facing tough times. This is despite the firm’s huge financial resources. GM has a sound strategic core. This is evidenced by its huge turnaround since its bankruptcy in 2009. The company has hired highly skilled managers with rich strategic experience and knowledge of strategic management to guide its corporate development (Lewandowski, 2014). As one of the largest automakers in the world, GM is resource-rich in terms of tangible (hardware and facilities) and intangible (liquid cash). These resources are used to drive its expansion and support its new innovative orientation (Lewandowski, 2014). GM is yet to expand its network to emerging markets and advanced economies in Europe, Africa, and Eastern Europe. The company has opportunities to invest in new markets and maintain profitability (Lewandowski, 2014). The electric/hybrid segment also has endless opportunities created by consumers’ new inclination towards green energy. The threat of new entrants is low to moderate. Factors such as research and development (R&D) costs, economic instability, competition, and inflation make it extremely difficult for prospective entrants to successfully venture into the industry. Rising fuel prices, coupled with economic instability, has signaled a shift to electric and hybrid cars. GM has been forced to embrace electric/hybrid cars in order to avoid losing market share to other firms. Consumers have started viewing electric/hybrid cars as viable alternatives to wasteful and environmentally unfriendly gas automobiles. The threat of substitutes is moderate to high. Buyers have moderate to high bargaining power, especially because of new regulations and a greater variety to choose from. In the US