Internal Factor Evaluation (IFE)
Each of the factors in this (IFE) that was engaged in this research are rated based on the criteria of the internal strengths, and weaknesses, the factors being rated by weighted per the importance on the success of the industry, which is all in part of the strategic management process for an evaluation. Then the weights are multiplied from the company rating to get the IFE score for the final rating and a high of 4.0 means that the firm is potentially strong, 2.5 means that they are in the average range, and a 1.0 initially means that they are weak and need to improve in some area compared with others in the industry. Rate numbers are indicated by the strength and weakness:
1 – means this is a major weakness.
2- means this is a minor weakness.
3- this is considered a minor strength.
4- this is considered a major strength.
General Motors scored a 2.68 based on the methods stated. Which places this firm a little above average by 0.18. The average is a 2.5 compared in the industry. The report on the following pages explains why these factors are rated as they are.
Internal Factor Evaluation Matrix
Organizational Culture, Human Resources: General Motors use of organizational culture to improve its automotive line. General motors strive to improve their industry’s position. GM encourages the sharing of ideas in human resources and hard work to advance total business performance unambiguously in the area of internal issues and competition that is flourishing. A well-coordinated workforce has the ability for General Motors have better innovations for a more potent competitive advantage against others in the manufacture.
(Kissinger, 2018) Mentions that “General Motors has an organizational culture of agility.” I rated at 4 for this reason and the weight at a 0.15.
Research and Development: The automotive industry is extremely competitive and can grow quite intense every firm or brand invests in research and development to stay in the race and discover some innovative growth against the challenger. The research and development cost is aimed at developing new product lines and the technology or improvements of products that are already pre-existing to make them safer for the environment and the consumer. (Pratap, 2018) claims things related to emission control, improving fuel economy, and safety for drivers. (Pratap, 2018) also claims that R;D expenses billions of dollars per year in 2017 spent were 7.3, 2016 6.6, 2015 at 6. The weight was given 0.12 and 3 for a rating because they do put forth effort for the environment, the consumer, and the billions spent to research it all including innovations and newer technologies.
Economies of Scale: (Colias, 2018) Claims that General Motors needs to acquire caught up in the race with its rival competitors and what was slowing General Motors down was that of their own internal procedure that needed to go quicker that needed to move faster. Comparable with all big firms it takes some time to bend things around and General Motors is setting out to answer exactly that. I gave the weight of 0.09 and a rating of 3 General Motors seems to be turning themselves around and found their internal issue and are working at making their company better.
Financing Program: According to (Wikipedia, 2018) General Motors Financing Program was previously formally known as GMAC Inc. that was established in 1919 and continued until 2010, when it was re-branded as Ally Financial. Services that are included are car financing, online banking, brokerage firm, mortgages, credit cards. Ally is on the list of one of the largest banks in the United States by assets and is the largest car finance company in the United States. Although in 2013 there was a discrimination lawsuit on Ally Financial based on race and not creditworthiness or other objective things that could have put the borrower at risk. (Wikipedia, 2018) states this resulted in $18 million in penalties. I gave the weight of 0.06 because of the reason stated above and the rating because Ally Financial is a strong source for consumers and General motors to finance General Motors automobiles and make more sales and the consumer on an affordable payment plan.
Global Presence: According to (Premack, 2018) although General Motors is struggling Europe, they are still raining Europe they have still rained record-breaking sales within the past three years. (Premack, 2018) also states that China is the most to thank as 3,9 million of General Motors automobiles were sold alone in that General Motors top market for the last five years now. General Motors in Korea was looking forward to a good year and that it would be considered having record sales per forecasting, however there happened to be a 54% decline from the year before and sales have fallen for this year alone by 24%. I gave this a weight of 0.09 because of the falling of the sales and the rating was 3 because they still had some top sales within the global presence.
Strong Brands: (Jurevicius, 2018) claims that General Motors has 10 different brands that it is currently selling these brands are: Buick, Cadillac, GMC, Chevrolet, Holden, Opel, Vauxhall, Baojun, Wuling, and Jiefang. With a portfolio like this of different brands, this can and attract more consumers and keep brand loyal customers and possibly interest a new target market. This one has a weight of 0.12 and a rating of 3 because they are reputable with the brands.
The bureaucracy of Organizational Culture: When companies become larger and gain more bureaucratic, this can become cumbersome as the management of firms assumes entitlement that puts a wall between them and the customer, which can become risky. In the 1980’s to 2009 when GM filed bankrupt, General Motors got the label for cutting costs rather than customer interests when this happened there were different engines that were not supposed to go to that specific brand car and parts that came from one to another, which put the customers in a state of confusion, In personal experience I call it a blessing. (Donnelly, 2018) claims that Ross Perot said, “at GM, the focus is not on getting results and winning, but on fostering the bureaucracy.” I gave Gm the weight of 0.1 because they did make some parts interchangeable, their need to put the company first rather than the customer, but however they are changing that per a prior I believe with Organizational Culture, Human Resources, so I gave them a rating of 3.
Technology: According to what (anthonysmoak, 2018) claims GM has bought Cruise automation, which autonomous driving software and hardware technology is being developed. Alan MacCormack states that “today’s vehicles have more software and computing power that the original Apollo Mission.” GM was known as being a highly in innovation until a series of mishappening happened, that put the firm’s reputation in peril. I put a weight of 0.06 and a rate of 1 because (unknown, 2018) General Motors have had some serious recalls that endangered the lives of some with their Chevy cobalt with faulty ignition switch issues. Which is one of the things that have put the companies name on the line, General Motors paid out nearly 1 billion to settle claims and is regaining the quality of its cars.
Dependence on the U.S Market: General Motors and Ford both continue to base the majority of auto sales here in the U.S. (Naughton & Butters , 2018) wrote a quote for Ford and General Motors “Home is where the profits are.” Every doll earned in the automotive area was in North America according to Ford and apparently GM had the same effect or similar situation.
Limited Business Diversification: (Papers, 2018) claims that when General Motors describes their brands in politics, it is basically having “two brands” they both will drive the global growth. Chevrolet which creates the value in reliability, and performance and the other of Cadillac which creates the vision of a luxurious ride that is powerful. Also, the brands of Vauxhall, Opel, GMC, Buick, Baojun, and Holden are all being crafted to encompass customer satisfaction in as many regions as possible. This is a weight of 0.11 and a rating of 2 General Motors is pretty weak in this field and could ameliorate.
The IFE Score:
The final score is 2.68 for General Motors which give an indication that this firm may be above average by a little bit worth its competitors on the average scale. General Motors should do a follow up on the bureaucracy within its organization and when depending only on the U.S market for most of its sales we already know that China could and can be high seller for them, so I would recommend that General Motors try to make more sales Globally and keep the ones at home. GM could also do some more innovation with interior and change things up a little bit to keep up with the visual appeal as well.