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General motors

General motors. Valuation Project. Industry Analysis. Automotive Industry. Key determinants of profitability. Industry competition. Big Three. Domestic Internationals. Toyota Nissan Honda. General Motors Ford Chrysler. Bargaining power of buyers. Economic Drivers:.

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General motors

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  1. General motors Valuation Project

  2. Industry Analysis Automotive Industry

  3. Key determinants of profitability

  4. Industry competition Big Three Domestic Internationals Toyota Nissan Honda • General Motors • Ford • Chrysler

  5. Bargaining power of buyers Economic Drivers: Demand Industries Auto wholesalers Domestic and foreign auctions New car dealers Car rental agencies • Consumer preference • Demand from new car dealerships • Crude oil prices • Steel prices • Trade in values • Government regulations (safety, emissions, etc.)

  6. Bargaining power of suppliers • Key Supply Industries: • Brakes manufacturing • Electronics manufacturing • Engine & parts manufacturing • Interior manufacturing • Metal stamping • Steering and suspension • Transmission manufacturing • Auto assembly vs. Auto manufacturing

  7. Threat of substitution • General Product Categories • Compact and subcompact cars • Midsize and full size sedans • Sports cars • Luxury cars • SUV’s • Light trucks • Heavy trucks • Industry emphasis on customizability • “Rebadging”

  8. Threat of entry • Technological innovation drives new competition • Opportunity to break through barriers of entry • Example: Tesla • Electric cars & powertrain components • Tesla Roadster • First fully electric sports car • Start up tech company behavior

  9. Company analysis General Motors

  10. GM: the basics • Headquarters: Detroit, Michigan • Founded in 1908 • Operates in 157 countries • Employs 200,000+ • Market share: 11.5% (FY 12) • 17.5% share of domestic market • Key brands: Chevrolet, GMC, Buick, Cadillac • Over 20,000 authorized dealerships worldwide

  11. Financial performance

  12. Government motors • June 2009: filed Chapter 11 bankruptcy • July 2009: emerged from bankruptcy with ownership split between: • US Federal Government • United Auto Workers Association • Canadian Government • GM bondholders • November 2009: GM share returned to the NYSE at $33 per share • Throughout bankruptcy: • Eliminated 1/3 workforce and plant assets • Reduced debt from 95 billion to 17 billion • Discontinued manufacturing of brands: • Hummer • Pontiac • Saturn

  13. SWOT Analysis

  14. Client Strategy Template: General Motors Strategies Growth Strategy:Focus on “alternative propulsion strategies” (hybrid, electric, FlexFuel, hydrogen fuel cell) in an attempt to create environmental diversity and fuel efficiency throughout product line Financial Goals & Operating Priorities:Aim to be fuel efficiency leader in industry, top market share both domestic and global Characteristics of the Business Major Business Units: GMNA, GME, GMIO, GMSA, GM Financial Markets: Automotive assembly and manufacturing, financial services (leases, contracts), automotive safety technology Products: Chevrolet, Chevy, GMC, Buick, Cadillac, OnStar technology, GM Financial services Customers: Auto wholesalers, Rental car agencies, Authorized dealerships Competitors:Toyota, Ford, Nissan Strategic Alliances/Joint Ventures: Mostly concentrated in China Potential Adverse Influences: Constant technology innovation, oil prices, raw material prices, government regulation, dependence on suppliers, product recalls (safety issues)

  15. Growth strategy & goals • R&D emphasis: “alternative propulsion strategy” • Energy diversity • Environmental leadership • Objective: recognized leader in fuel efficiency • FlexFuel • Biofuel • Hybrid, electric • Hydrogen fuel cell

  16. Markets & products • Auto brands • Chevrolet • GMC • Buick • Cadillac • OnStar (wholly owned sub) • GM Financial • Formerly AmeriCredit Corp • Strategic Alliances • Concentrated in China • JV with SAIC Motor

  17. Potential Adverse influences • Competitive technology • Oil shortages & price volatility • Dependence on suppliers • “Just in time” manufacturing processes • Raw material prices • Steel, Aluminum, Copper • Low auto demand in European market • Government regulation • Product recalls, safety issues • Decrease in consumer demand • Negative impact to brand image

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