Defenders; Prospectors; Analyzers; and, Reactors - Essay Example

Chosen Company: General Motors Prospectors: General Motors is a US based international automobile producer and seller, which has expanded its operations across 135 nations worldwide. GM is known for its high quality differentiated, innovated and well-positioned products such as Silverado Hybrid, Chevrolet Camaro, Cadillac SRX, Buick, Chevrolet Equinox, GMC Terrain, Chevrolet Volt and Cruze, are heavily desired and purchased across USA, Europe and emerging economies (Squatriglia, 2010). By definition, companies with fairly broad product lines and focus on product innovation and market opportunities are known as prospectors.

Unequivocally, GM is a prospector as it has adopted a proactive approach in the industry. It focuses heavily on R&D function to create premium quality, authentic, reliable and safe want-satisfying automobiles (MSN report, 2010). GM’s strategy and approach is absolutely correct because of cutthroat competition among corporations such as Ford, Toyota, Honda, Nissan, BMW, Fiat, Daimler, VW etc in the global automobile industry. The intense competition among producers increases rivalry; therefore, each company focuses heavily on technological development, adaptability, value-addition, brand recognition and product differentiation to grab maximum market share.

Hence, GM has to continue its marketing approach to ensure business growth and sustainability in future. PORTER’S Five Forces:Bargaining Power of Suppliers: The bargaining power of suppliers (raw material providers, machinery, spare parts etc) is medium because of recent improvements in global economy. The automobile demand is stronger in 2010 compared to extremely low demand in 2009. GM successfully posted profits in first two quarters, which has also improved suppliers bargaining power. Potential New Entrants:The world has still not completely come out of recession; therefore, the threat of new entrants and investors is low.

Also, this is an oligopolistic industry dominated by well-established giants with colossal financial, technological, human resources and managerial expertise. In addition, there are various barriers to entry such as huge investments, registration, licensing and advertising budgets etc., which reduce this threat. Rivalry among Competitors: Chances of rivalry among competitors, in the form of price-wars, introduction of new products and after sales services, are very high because of oligopolistic nature as it corporation seeks to increase its market share.

General Motors and its renowned global competitors would continue focusing on innovation, product and market development, quality maintenance and improvement, fuel-efficiency, differentiation, advertising and branding to enhance consumer awareness and increase sales revenue.Bargaining Power of Buyers: The bargaining power of customers is medium because of improvement in the global economy and availability of short-term employment opportunities. Also, the demand of automobiles has been increasing in 2010 compared to 2009.

GM could benefit from Toyota’s recall across USA, Europe and China where it has already shown phenomenal growth and goals accomplishment in 2010. Threats of Substitute Products: The threat of substitute products is very high because every company has expanded its product line and has been developing new products (especially Hybrid and alternative fuel) to entice maximum customers in the marketplace. References:Squatriglia, Chuk (2010) “General Motors Invests in a Bright Idea” Wired [Online] Available at http://www.wired.com/autopia/2010/08/general-motors-bright-automotive/Taylor, Edward (2010) “General Motors to debate Opel investment” [Online] Available at http://www.reuters.com/article/idUSTRE6205JN20100301 MSN Report (2010) “The hottest IPO of 2010: GM?

” MSN Money [Online] Available at http://articles.moneycentral.msn.com/Investing/Extra/the-hottest-ipo-of-2010-gm.aspx Press Release (2010) “GM Second Quarter 2010 Results Show Sustained Progress” General Motors [Online] Available at http://media.gm.com/content/media/us/en/news/news_detail.brand_gm.html/content/Pages/news/us/en/2010/Aug/0812_earnings Abuelsamid, Sam (2010) “General Motors reports $1.3 billion profit in second quarter” Auto Blog [Online] Available at http://www.autoblog.

com/2010/08/12/general-motors-reports-1-3-billion-profit-in-second-quarter/