Evaluation of pest analysis of the overall motors company

Business, corresponding to dictionary, refers to something being concerned with the sale and purchase of, or with trade and commerce. As time passes, after generations of research, the perspectives and the fabric have evolved, giving a new dimension to the sensation called business. The excellent objective of the article is to deduce the business enterprise environment and also understand its gravity on management students and the entire business enterprise. To understand this better, PESTEL also called PEST evaluation will be employed on the overall MOTORS COMPANY, it can help analyze the various factors which constitute a business environment and the tactical decisions taken in the last half decade. Consequently, conclusions and tips will be completed.


There are countless factors that exemplify a business and each one of these factors influence the decisions and the strategies that your organization chooses to make. The factors might be external such as competition, customers, suppliers and could have a direct impact on the functioning of an company. These straight effecting factors are known as Micro environment. Just as the factors might be exterior and can affect the functioning of the business indirectly such as interpersonal, technological, political, legal and environmental. These aspects are termed as Macro environment (Palmer and Hartley, 2006).

The primary aim of any business is to manifest profitable and successful artifice which is only possible if the business is enlightened about the weaknesses and can make maximum out of an opportunity when it strikes. To apprehend the business enterprise environment of an company, PESTEL analysis can be employed to evaluate politics, environmental, economic, social, technical and legal factors. PESTEL evaluation helps measure the macro-environment better and consequently produce fruitful strategies. Another important method of analysis is the SWOT which examines the exterior aspects as hazards or opportunities and the inner factors as strengths or weaknesses. These procedures completely constitute and help derive the most effective strategy to achieve the required goal.

A deep research will be conducted on the overall MOTOR COMPANY. A particular conclusion is subsequently deduced presenting the possible reasons that have led the company serious deficiencies in days gone by five years, the business being one of the oldest and unarguably top most automobile manufacturers all around the globe, and the possible decisions used by the company heads which led to such catastrophic outcomes.


Founded on Sept 16, 1908 famously known as GM, Standard Motors Company is a group from the United States of America, with its head branch found in Detroit Michigan. The company is massive, with its establishment in 34 countries and employees numbering about 244, 500 from all around the world, including sales and services in about 140 countries. Based on the statistics in 2008, GM has placed as the major automaker in the U. S and the next largest on the globe. The General motor Group owns a series of top notch car manufacturers which makes GM group indisputably the world's biggest automobile entity. The General Motors Company is going by Edward Whitacre. Jr. as the Chairman of the Panel of Directors and the Chief Executive Official. With vehicle brands such as Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling under its hood, it is just a daunting task to control this business, which is distributed in almost every continent. Recently the business has faced humongous challenges, which has made the business choose new business strategies and reform itself. (www. gm. com, 2010)


Acquiring business in a single country has its own challenges, whatever the aspect of business, being constantly under the microscope and constantly maneuvering itself in line with the developments and the needs of the consumers is straight proportional to return the business makes. Moreover if the business is multinational, the risks, obstacles and the opportunities multiply.

In the year 2007, the regular hike in essential oil prices got a deep impact on the motor vehicle industry; the impact had not been only by the changing retail practices of the consumers but also by the rates pressure from the uncooked material. Moreover, the industry also encountered constantly increasing external pressure from the public carry industry, as the consumers were curtailing private vehicle consumption. ()

The United States of America is one of the world's major consumers for light vehicles, passenger vehicles and light pickup trucks. This portion was dominate by 'the big three' specifically the General Motors, Ford Motors and Daimler-Chrysler, which account for about half of total number of vehicles in the motor vehicle industry.

Holding almost a monopoly in the automobile industry, ironically GM group is going through losses recently. PESTEL will be presented on the General Motors Company which will consequently give the strategies and the decisions used.

Economic Factors

To commence with the monetary factors, the whole continent was going through recession in the entire year 2008 and everybody, from customers to the natural materials suppliers were curtailing there expenses which just made the problem more hurting. This also remaining a deep impact on the macro-environment which led to unemployment. As a car industry, besides being truly a merchandiser, GM group is also a major consumer of varied metals, textile, rubber, plastic, vinyl and computer potato chips.

When the business cycle is at the stage of tough economy known as recovery, it becomes even difficult for the customers to keep up with the regular purchasing habits. Which means that the clients purchase only the items which are inexpensive and are of definite importance. The new protocols imposed by the Fiscal Insurance policy Institute (FPI) led to a hike on the business by the federal government which led to the increase of prices, thus making the automobile out of reach of purchase. Inflation as well as deflation marks a right blow to the expense of products and the assistance. For instance, if more tax is levied on customers, it suggests diminished income which finally leads to lower expenditure.

All these circumstances directly affect the actual customers to turn away from GM and chose more affordable and economic automotive products. Furthermore, for international markets, the inconsistency in the exchange rate offered others an extra advantage.

Political Factors

Political environment can be inferred as all the aspects of the government which affect the sales and the purchase directly or indirectly, i. e. any one of the aspect impacts the functioning of your company favorably as well as adversely. The rules of the federal government have always been from the ignorance of the company towards environmental as well as security legislation since 1960. The company has been always ignorant towards security gadgets such as seatbelts, airbags, ABS (antilock braking system) and environmental friendly products such as large motors and catalytic converters, with a concept to keep its vehicle notoriously strong, unconventional and pleasurable. But the change in the norms worldwide took a heavy toll on the organization. The world now possessed new needs and new set of trends which got no place for unsafe and petrol gulping engines.

Furthermore, the antagonistic image of the chief executive of america of America George. W. Bush also led to boycotting of American produced vehicles. This example intensified with the war between U. S. A and Iraq which led to further worsening of the sales figures of General Motor unit Company across the world. But in some way, the new federal rules were passed to market local sales in the united states by restricting imports and developing local companies which played out a major role in the persistence of GM group through critical times.

Technological Factors

As time has advanced, so has technology, which really is a dominating element in the performance of a firm. As a matter of fact, companies should be ready to mould themselves in line with the demands of the clients which speedily changes anticipated to developments in technology and subsequent transformations on the market. The company not only makes full use of the innovating technology to constantly innovate itself for the chop throat competition by the competitors but also uses it for reaching out to the customers and understanding their needs and comfort better. Technology is also employed by the company to reach out to the customers more proficiently through more effective distribution stations.

For General Motors Company the technological aspect was examined through recycleables. The new superior products made from plastic and fiber content glass weren't only reliable but at the same time more economical, which really is a beneficial step towards both, the merchandiser as well as the buyer. Technology brings in good opportunities I addition to new hurdles too. Another discovery where technology benefited the company was with the enrollment of the internet in the systems. Not only could customers place their orders online, but also solve their questions, making the business deals effortless, thanks to the internet. The GM group has found an idea which is permanent called as the business-to-business and business-to-customer. There may be just one more factor about technology that has led to the betterment of GM group; it's the notion towards research and development (R&D). Recently companies spend far more than the earlier days on R&D, ensuring total basic safety, performance and economy to the potential customers.

General Motors calls for special value joining with faithful customers, even after the company has passed its maturity level and is currently in the reform stage. The company has prospects who aren't volatile and will stick to the brand GM.

Social factors

Social aspect is also one of the vital contributions for analysis of any organization. The condition is very simple when dealing with a national entity but gets complex when a multinational company is under consideration, reason being each state has some other perception towards its buying habits depending upon education, requirement and various other features such as urbanization.

Social factor has been a benefit to GM because the organization is around for almost a decade now. It has been a global leader in sales and services for almost seventy years. This is a factor gives the business its name and status, which is cured with admiration and associated with trustworthiness and endurance. Considering the aforementioned positive sociable factors, the company still was required to suffer setbacks scheduled to distinct principles and frame of mind of the consumers and na‡ve strategies GM that imposed in a few countries. Cutback was the new pattern of the customers and GM was required to adapt itself in which to stay the market. Hence, the huge and consuming engines needed to be substituted with high technology petrol successful ones such as crossbreed.

Point out the actual problem/problem was?( this the problem outlined by the professor)

What were its effects on Standard Motors? ?( this the condition outlined by the teacher)

What performed GM do to deal with it in the best possible way? ?( this the condition outlined by the teacher)


To understand the environment of the overall Motors Company in a gist, it is one of the world's oldest and largest enterprises in car business. The organization produces all the top brands of vehicles that happen to be in the fantasy car set of almost every person; it enlists Chevrolet, Pontiac, Buick, Cadillac, Hummer, Saab, GMC, Saturn. It stocks alliance with Suzuki and Isuzu. GM also shares technologies with the current world innovator Toyota and Honda Company. The firm is always known because of its exotic vehicles and setting world benchmarks of travelling experience. The vision of GM is definitely par comparison and be a innovator in motor vehicle products and associative assistance. Its motto is to provide excitement in customers via unlimited betterment through trustworthiness, joint effort and invention of the GM group. For GM to become a world head in motor vehicle business the firm had to change on to on the other hand fueled automobiles and advanced standard products that makes a direct effect on international consumers' and gives them the confidence they can relate with quality and technology.

Even though the group is not at its best in recent times globally, one of the greatest advantages is the fact that the business has stayed in the business for almost a hundred years rendering it the world's most globally experienced group and therefore gives it a cutting edge over others when expanding internationally is considered. Adding up to it is the 'OnStar Satellite television Technology' installed in vehicles which is effective in catastrophic conditions like fraud. This technology allows the drivers of the vehicle to communicate with the OnStar assistance whenever necessary. With so many advantages on its part, GM's average folks $ 701 /vehicle increased to about 108% in the year 2001.

Standing tall and dominating over its rivals for an extremely lengthy period, the competitors have found many loop openings that could e used to take down GM. The main reason for its downfall is the job framework of GM. The company is still a head in building profits but the quantity of employees are way more than the competitors.

One the biggest weakness of GM is investing in the task of hybrid and alternative resources. The company has been doing research for years and blowing up a whole lot of economic resources without attractive results. This is actually the biggest blow which includes almost sole handedly outcaste GM from the planet competition. Moreover, after liquidation, about 67% of the firm is owned or operated by the united states treasury team. Hence, they are simply too dependent on the government which hampers its capacity to make decisions. Also, the opponents are too strong to focus on just one single country. Lastly, taking into consideration the subject matter of poor business structure again, the association is vertically set up, this being a cause of lack in communication. This straight affects the efficiency.


Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)