Custom «Management Report: GMC Motors and Toyota Motors» Sample Essay

Custom «Management Report: GMC Motors and Toyota Motors» Sample Essay

General Description

General Motors

General Motors (GM) Company is a well-known corporation that specializes in producing automobiles, trucks, and car models of famous brands such as Buick, Chevrolet, Cadillac, and GMC. Its daughter companies also include GM Opel, Daewoo, Vauxhall, and Holden among others. The company is presented in five major business segments, namely GM Europe (GME), GM North America (GMNA), GM South America (GMSA), GM Financial Operations (GMFO), and GM International Operations (GMIO). The current iteration of the corporation traces its roots back to 2009 when the ex-GM was divided into two organizations after it developed from Chapter 11 bankruptcy protection (Vault, 2015). The company possesses over 100 locations in the United States and 15 locations in Canada. It has manufacturing, assembly, office, distribution, and warehousing operations in 61 countries. It also has 46 facilities, 22 of which are situated in the United States. Its major facilities beyond the United States are located in Canada, Brazil, the United Kingdom, and Spain. The company operates in four major automobile sectors. 65% of all the activities and total sales are presented in GMNA. The rest of operations are presented in Central America, Canada, Mexico, and the Caribbean.

Since its establishment, the company has witnessed the growth in its revenues, saving its activities from bankruptcy. In 2014, the corporation’s net revenues increased by 0.3% due to the higher revenues from GM' financial activities, partially offset by decreased sales in GMSA and GMIO segments. GM financial revenues rose due to the financial income of $0.9 billion owing to the acquisition of Ally Financial international operation and the increase in the leasing of vehicle income of $0.5 billion with a larger portfolio (Vault, 2015). GMNA’s sales grew because of the new pricing policy and a higher level of wholesale volumes associated with daily rental vehicles sold with repurchased obligations and a higher percentage of sales of parts and accessories (Vault, 2015). In 2014, GM net income declined by $1.3 billion because of high costs spent on automotive parts, as well as lower increased revenues. The cost of sales grew because of recall campaigns and advertising strategies. This year, the company’s net income was presented by the operating activities which declined by $2.5 billion because of the reduced net income on other assets and liabilities (Vault, 2015).

Toyota Motors

Toyota Motors is a Japan-located company which specializes in managing automobile and financial business. The organization operates in three basic segments, including automobile segment, financial segment, and others segment. To begin with, the automobile segment is engaged in the manufacture, design, and sale of automobiles, involving cars, trucks, and minivans, as well as related accessories and parts. The financial segment is associated with the delivery of financial services which focus on the sale and distribution of the company’s products, such as the leasing of equipment and vehicles. Finally, the others segment presents manufacture, sale, and design of housing, along with communication and information business.

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Toyota manufacturers deliver and sell passenger car, commercial vehicles, and minivans. The company has a subsidiary, Daihatsu Motor, Co., which produces mini-vehicles and compact cars (Reuters, 2015). There is also another subsidiary, Hino Motors, which produces and sells trucks and buses. Additionally, Toyota manufactures automotive parts, accessories, and components for its sale and use. The company’s vehicles could be split into two categories, mainly hybrid and conventional engine vehicles. The product line-up involves compact, subcompact, sports, specialty, recreational, and mid-size luxury cars, mini-vehicles, sport-utility vehicles, minivans, pickup trucks, and buses. Toyota’s compact and subcompact cars also include Corolla sedan with four doors. The Yaris is a subcompact car introduced in 2008 (Reuters, 2015). Mini-vehicles are produced and sold in Daihatsu which also provides passenger vehicles, mini-vehicles, and parts.

The company has its market segments in Europe and North America and produces luxury lineup composed of vehicles purchased under the Lexus brand. The Lexus models consist of sports cars which are popular in the US market. Toyota’s sport-utility vehicles are also available in North America. Pickup trucks are sold in Tacoma and Tundra. The Sequoia, the Tacoma, and the Tundra are distributed and produced in the United States. Its product lineup involves trucks, vans, and micro-buses sold in Japan and abroad. Toyota sells a range of pickup trucks and sport-utility vehicles, including the 4Runner, the RAV4, the FJ Cruiser, the Highlander, and the Land Cruiser (Reuters, 2015). The company is also involved in financial activities. The financial services corporation is the company-owned subsidiary which controls the management and operation of financial companies all over the world, along with the expansion of new vehicle products. Toyota Motor Credit Corporation is the major financial organization in the United States. Additionally, the company provides services in 32 countries all over the world through different financial subsidiaries, including Finance Corporations in Japan, Canada, Australia, Germany, and the United Kingdom.

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Competitive Advantage

Gaining a competitive advantage in the world of automobile manufacturing is a sophisticated task for several reasons. First, an automobile leader should be aware of the current trends in customer preferences, brand location, requirements for the production, environmental issues, and overall awareness. Transparent reporting is also another important aspect in the light of the increased popularity of corporate social responsibility issues. It should be admitted that both companies are at the highest rates among other automobile producers because of their effective strategies.

General Motors

Improving customer responsiveness by a varied portfolio of brands. The company’s strategic framework involves several aspects which will contribute to the achievement of 9-10% margins by 2020. This initiative strongly relies on product pipeline, which can improve customer retention. Further, to respond to customer’s needs, the company’s strategies are oriented to improving quality and safety of production, focusing on product design, and prioritizing the mixed material and lightweight body structure in the leading edge technology. The brand commitment, such as the Cadillac brand, is another important aspect which contributes to the development of GMFO. Furthermore, the company pays much attention to the growth of the Chinese market segment for the purpose of increasing the percentage of nameplates under Chevrolet, Cadillac, and Buick in the country so as to continue its growth in business under Wuling, Baojun, and Jifang brands. As one can see, market expansion is one of the strategies which contribute to the company’s greater competitiveness (Reuters, 2015). Its diversification strategy and adjustment to the local preferences and requirements can provide a strong ground for further expansion in the Asian market due to the brand popularity.

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Increasing innovation. In 2014, the company has also introduced its educational program in several communities all over Canada. It was considered the largest international expansion in the history. The Educational Network embraces over 53 facilities, involving company’s Canadian and US manufacturing plants.

Furthermore, GM’s efforts improve its product lines and develop energy-saving models, including the Chevrolet Volt which is among the first electric cars charged with lithium-ion battery, presented at the end of 2010 (Glowik & Smyczek, 2011). GM also introduced the new model of the Chevrolet Spark electric car in 2013. It was followed by the emergence of the partnership with Segway to introduce a two-seat, two-wheeled electric vehicle. GM also created about 20 FlexFuel cars sold in the U.S. market.

At the end of 2013, GM launched a new plan aimed at ceasing the mainstream distribution of its famous Chevrolet brand in Central and Western Europe because of the challenging business model and the difficult economic situation in Europe. The company believes that such a change will contribute to the effectiveness of its European operations by means of strengthening Vauxhall and Opel brands, reducing the market complexity within those regions.

Merger and acquisitions are also among the most popular strategies that could increase a competitive advantage and contribute to the financial situation in the corporation. In 2013, GMFO purchased Ally Financials in Latin America. In such a way, GM could also create a competitive advantage over its major competitors, including Ford Motor Company.

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Toyota Motors

Increasing quality. The core competence of Toyota Motor Corporation consists in its ability to manufacture automobiles of high quality at affordable prices by providing an optimal value for the majority of the consumers. This competence could be associated with the innovative production practice. The quality dimension of the company’s products evolved and improved the standards of automobile production in the past. Moreover, almost all automobile products should reach the highest quality of production. It is considered the major problem related to cost leadership strategy on which the company focuses.

Increasing innovation by lean manufacturing management. Toyota’s competence refers to its production system, premised on lean manufacturing concept, which involves innovative practices, such as Kaizen, Six Sigma, and Just in Time delivery. Toyota works effectively over the years to develop its distinctive competence. Its advantage is not possessed by other automobile producers and, therefore, this distinct feature creates a competitive advantage over Toyota’s competitors.

SWOT: Toyota Motors


Strong brand recognition and market position are among the major strengths that the company possesses. Toyota has a reliable market position in diverse geographic areas all over the world. In 2012, its market share for Lexus and Toyota brands in Japan equaled to 45.5% (Toyota Motor Corporation, 2012). At the same time, Toyota possessed a market share of 12.2% in North America and 13.4% in the Asian Region. It had the lowest percentage in Europe, which was 4.3% (Toyota Motor Corporation, 2012). Additionally, the company had 7% share in the Chinese market and a significant market share in Central and South America, Africa, and Oceania. Such a strong position can provide the company with a strong competitive advantage and expand its international relations. Furthermore, the company possesses a portfolio of famous brands in the automobile industry. Therefore, Toyota’s position in the marketing helps it to introduce effective sales growth in international and domestic markets.

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The second strength consists in a strong focus on research and development through expanding product portfolio and improving the quality, functionality, environmental sustainability, and safety. The company’s effort in research and development is directed at introducing new processes and products and contributing to the capabilities of the current products. Additionally, Toyota Motors carries out its research and development activities at 14 facilities all over the world (Obara & Wilburn, 2012). The strong emphasis on research and development also contributed to the incorporation of new features to the current range of products.

Distribution network and extensive production are also among the advantages of the company. Toyota manufactures automobiles and parts to them through over 50 manufacturing companies in over 20 regions and countries. While the organization spreads production base, its extensive distribution delivers a wider reach, boosting greater revenues.


Apart from the strengths, the corporation has weaknesses as well. Specifically, Toyota has recently recalled a range of products, which could lead to the damage of brand image and the decrease in general sales of the company. In particular, in 2011, Toyota recalled over 111,000 models of Lexus and Toyota’s brand because of the damage to elements of the potential shutdown and substrate of the hybrid system (Toyota Motor Corporation, 2013). Further, Toyota recalled over 180,000 vehicles due to the oil leakage and abnormal noise that could apparently lead to the slack of bolts in the rear wheel differential and sub-transmission (Toyota Motor Corporation, 2013). Additionally, the company was included in the government investigation in terms of the product recalls. For example, in February 2012, the National Highway Traffic Safety Administration launched a preliminary investigation of faulty power window penalties, which could also result in serious fines affecting operational margins.

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Further, Toyota also witnesses a tremendous decline in sales and key geographic segments. Specifically, the company experienced decreased sales in North America, Europe, Asia, and other geographic regions. In total, the losses involved 60.8% of all the revenues of the company. Therefore, a steady decline in Toyota’s geographic segments should impose pressure on profit rates and on the overall revenues of Toyota.

Moreover, poor allocation of resources and materials could become a serious problem for the company (Obara & Wilburn, 2012). Specifically, Toyota has currently a low return on equity and assets in comparison with other rival companies, including Honda Motor and Nissan Motor. Further, decreasing sales in the major geographic regions due to the continuous pressure of their competitors are the main reason of the company’s problems.


Concerning opportunities, the global automotive industry could significantly affect the company because of the economic downturn with the decrease in revenues being recorded in 2008 and 2009. At the same time, in 2011, Toyota witnessed a significant rebound, which continued in 2012. The global automotive manufacturing industry grew in 2012, reaching the value of about $1,500 billion (Obara & Wilburn, 2012). Therefore, the recovery of the automotive industry at the local level is a good opportunity for the company to increase its revenues and gain more customers.

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Furthermore, Toyota could benefit from establishing a partnership with BMW. Thus, in June 2012, BMW and Toyota concluded a memorandum of understanding directed at long-term collaboration in the field of technological innovation (Obara & Wilburn, 2012). The agreement between the two companies can result in the effective collaboration in the field of architecture development of components for further vehicles. The enhanced partnership is also expected to improve with the introduction of the technological know-how of the automobile producers and may lead to the emergence of the new products, increasing organization’s revenues. Additionally, the combined partnership can provide significant cost savings and synergies (Obara & Wilburn, 2012).

Finally, the strong outlook for the new market in automobile manufacturing could also contribute to the company’s growth. At the same time, the forecast demonstrates that it will also foster strong growth by 2016.


Regarding the evident threats for Toyota, the emphasis should be placed on the worldwide automotive market, which is currently highly competitive. The company encounters strong competition in various markets and from different automobile producers. Moreover, the competition between auto players could be intensified in terms of constant globalization in the worldwide automobile industry (Obara & Wilburn, 2012). The factors influencing competition involve product features, quality, the amount of time needed for integrating development, innovation, reliability, pricing, fuel economy, financial terms, and customer services. Enhanced competition can result in lower vehicle sales, which further cause a decline in pricing, influencing the financial operations in the company.

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Second, the company should be aware of the disruption of production because of natural disasters, such as floods or earthquakes. Toyota primarily operates in Japan, the region which is subject to earthquakes; therefore, the company’s developers should pay specific attention to the safety and quality of automobile design and the development of reliable parts for their vehicles. They should also cooperate with the corresponding suppliers.

SWOT Analysis of General Motors


Similarly to Toyota, GM has also been presented globally, which allows the corporation to sustain a competitive advantage. Further, the company is constantly working on its innovative vision and strategy, striving to meet the environmental demands and customer preferences (Ferrell & Hartline, 2012). Like Toyota, it also possesses a strong portfolio of famous brands, providing a strong ground for capturing a specific customer segment. Strong presence in China is also an advantage for the organization due to the promising opportunities opened to it in the Asian market (Glowik & Smyczek, 2011). At the same time, GM strictly focuses on the home market because of famous, well-performing brands.


Despite the evident strengths, the weaknesses should still be taken into consideration. As such, the company should work on the high-cost structure, engage new suppliers, and make new partnerships in order to strengthen its position in the market. Brand dilution and bureaucratic culture are some more serious challenges GM faces (Ferrell & Hartline, 2012). Finally, the case with car recalls, which was also presented in Toyota context, could also prevent General Motors from gaining new markets.

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The company has a range of potential opportunities for growth and development. First, positive orientation to the development of ‘green’ vehicles could contribute to the expansion of customer base. Increasing fuel prices can also provide an increase in revenues (Glowik & Smyczek, 2011). Finally, with the increase of new models and development of the environmentally friendly project, the corporation could introduce new models for the development of new partnerships through mergers and acquisitions.


The company’s threats involve several aspects. To begin with, there is a threat of fluctuating fuel prices and the development of new emission standards. The latter can damage the company’s reputation (Ferrell & Hartline, 2012). Due to the rise in prices of raw materials, the corporation should seek alternative suppliers, which could even undermine the quality of parts supplied. Intense competition and difference in the exchange rate could also become a serious obstacle for the further sustainable development of the company.


The overview and analysis of both companies, namely Toyota and GM, show evident differences and similarities in developing their strategic frameworks and competitive plans for conquering the international companies. Thus, both corporations are aware of the opportunity to explore the Asian markets. At the same time, they also fear of entering the European market, which has its suppliers of vehicles and automobiles. Nonetheless, both organizations have firmly established their positions in the international market due to the brand development. While analyzing the differences, it is worth stressing that Toyota is more concerned with research and development opportunities and establishes multiple partnerships with other well-known companies and brands. In contrast, GM is more concerned with the introduction of environmentally friendly models of cars - electric cars which do not need fuel for engines. This innovation can find its buyers in the market; thus, this sphere is not involved in a rigid competition. Finally, both companies are strong and experienced enough to focus on different challenges and adjust to the changes of the external environment. They also pay attention to the brand development and expansion, which is also an effective strategy to be introduced.

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