The paper highlights the managerial, operational and financial issues of two reputed automobile manufacturers such as Ford Motors and General Motors. Apart from these, it also focuses on various social, legal and economic factors which influenced the growth and profitability of both…
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Moreover, the impact of changing patterns is also discussed in a brief way. Compare and Contrast of Ford Motors and General Motors (GM) General Motors Company (GM) is a transnational automobile manufacturer with its headquarter situated in the region of Detroit of the United States. It operates in more than 157 countries with a distinctive brand image and identity in the market of an automobile. On the other hand, Ford Motor Company is also the other renowned conglomerate an e operating in the similar sector i.e. automobile. Similar to GM, Ford Motor Company also has its headquarters in Dearborn region of United States. Legal Factors In this era of globalization and industrialization, the most significant issues which should be maintained in an apposite way are safety and eco-friendliness. These are essential in order to sustain in the market among others in the long run. Therefore, the government of the US introduced varied rules such as ‘National Traffic and Motor Vehicle Safety Act of 1966; Federal Motor Vehicle Safety Standards (FMVSS)’ in order to improve the safety standards of the passengers. The FMVSS introduced numerous laws, namely shoulder belts for the travelers setting in the front seats, head manacles and energy-sucking navigation columns among others in order to enhance the safety of the passengers (National Association of State Directors of Pupil Transportation Services, 2011). Along with this, the government of the US also launched certain regulations namely Clean Air Act, Vehicle Air Pollution and Control Act (The National Association of Clean Air Agencies, 2003) and also restricted the utilization of leaded fossil fuels in order to reduce contamination and global warming (United States Environmental Protection Agency, 2012). Thus, in order to sustain in the market of the US, both GM and Ford introduced electric cars running on electric energy measures in order to prevent the ozone layer from getting harmfully affected. Moreover, both the companies also followed the underlined safety measures in order to retain and enhance their market shares in the market of the US. Social Factors Apart from the legal factors, the other significant factor affecting the growth and the profitability of automobile industry is the social aspect. According to Hofstede, the dimensions of individualism and masculinity are higher in the US, therefore, personal preference and predilection highly influences the society (Greet Hofstede, n.d.). Moreover, low gender biasness and extreme fondness for luxury cars have improved the market share of automobile sector (Bradley, Bruns, Fleming, Ling, Margolin, Roman, 2005). Along with these, high income trends of US$ 49,445 in 2010 also played a major part augmenting the revenue of the automobile manufacturers (U.S. Census Bureau, 2010). Furthermore, high individualism made a significant impact upon the consumer decision making aspects which also enhanced the sale of the automobiles in the market of the US. Economic Factors In addition to the above discussed factors, economic factors also offer a noteworthy impact on the automobile sector of the US. The price fluctuations of oil highly influenced the sales of automobile industries thereby hampering the profitability (ESCAP, 2012).
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