General Motors

1
General Motors

• By Jake Altmeyer
• Freddie Fawcett
• Patrick Vallely

2
Table Of Contents

• Freddie Fawcett
• History
• Goods (Normal Vs. Inferior)
• Change In Current Economic Situations

3
Table Of Contents cont

• Patrick Vallely
• Demand
• Factors of Supply
• Substitution vs. Complements

4
Table Of Contents cont

• Jake Altmeyer
• Advertising
• Competition
• Corporation
• Factors Of Demand (Resources)

5
The History of General Motors

• General Motors was founded in 1908.
• It has been the largest manufacturer, designer,
  building and marketer of cars and trucks
  throughout the world since 1921.
• It sells vehicles in more than 200 countries
  worldwide and maintains assembly, manufacturing,
  distribution or warehousing operations in 53 of
  these countries.

6
GMs Recent Past

• In 2000, it sold 8.6 million cars and trucks
  constituting 15.1 of the entire world vehicle
  market (the worlds biggest share) at 4.5
  billion net sales and 184.6 billion in revenues.
  (General Motors).

7
What Happens When Current Economic Situations
Change?

• The Substitution Effect
• As the prices of a good falls, the consumer
  substitutes that good in place of other goods
  whose prices have not changed.

Vs.
8
What Happens When Current Economic Situations
Change?

• Income effect
• - As the price of a good decreases, the
  consumers purchasing power increases, causing a
  change in quantity demanded for the good.
• Ex Purchasing a vehicle with various power
  upgrades because the price of the vehicle was
  reduced.

9
What Happens When Current Economic Situations
Change?

• Normal goods
• A good that people demand more of as their
  income rises.

10
What Happens When Current Economic Situations
Change?

• Inferior goods
• - A good that people demand less of as their
  income rises.
• Ex. Buying a used Chevy Truck.

11
What Happens When Current Economic Situations
Change?

• Price Discrimination
• - Charging different prices to different
  customers for reasons other than differences in
  cost.

Vs.
26,900 Best Chevy, Hingham Ma.
24,000 Tom Chevrolet, Norwood Ma.
12
Product Discrimination

• When the consumer discriminates against a certain
  product due to various factors.

Ex. GM Vs. Ford
13
Demand

• Law of Demand- As the price of a good increases,
  the quantity demand decrease Ceteris Paribus.
• Ceteris Paribus- all other things are held
  constant.

Price
D1
D0
D2
Quantity
14
Substitution Vs. Complements

• Substitution Effect- As the price of a good
  falls, the costumer substitutes that good in
  place of other goods whose price has not changed.
• Ex. Buy a Hyundai car instead of a GM car.

15
Substitution Vs. Complement cont

• Complement- a good that is used together with
  some other good.
• If parts cost less to buy for a GM then more
  people would buy GM cars.

16
Factors Of Supply

• Input Price
• Number Of Sellers
• Expectations
• Price of Alternatives
• Technology

17
Input Prices

• Input prices includes land, labor, capital, and
  human capital.
• An increase in input price will decrease supply.

18
Number Of Sellers

• There are General Motor dealerships in 200
  different countries ranging from China to Mexico
• An increase of General Motors dealerships will
  increase the supply.

19
Expectations

• A increase in the expectation of price for GM
  cars would decrease supply.

20
Price of Alternate Goods

• - SUVs and Sedans
• - Chevrolet and Buick
• An increase in the price of alternatives would
  decrease the amount of supply.

21
Technology

• Better improvements in technology will increase
  supply.
• GM has new and improved factories around the
  globe, improving with technology.

S0
S1
price
Quantity
22
Factors of Production

• Land
• Labor
• Capital
• Entrepreneurial Activity

23
Factors of Production for General Motors

• Has manufacturing operations in more than 50
  countries worldwide
• Employ over 348,000 people worldwide
• Produce many different types of vehicles
• Produce 12 separate brands of vehicles

24
Factors of Production for General Motors cont

• Currently sells vehicles in more than 200
  countries
• Sold 8.5 million vehicles in 2002
• Sales make up over 15 of the global vehicle
  market

25
Different Brands produced by General Motors

• Buick
• Cadillac
• Chevrolet
• GMC
• Holden
• Hummer

• Oldsmobile
• Opel
• Pontiac
• Saab
• Saturn
• Vauxhaul

Also control production of brands such as
Subaru, Fiat, Isuzu, and Suzuki
26
Advertising

• The means by which a company makes its product
  known to the public.
• General Motors achieves this by sponsoring
  events, endorsements, and commercials.

27
Competition

• General Motors is the largest motor vehicle
  operation in the world.
• Therefore they only have competition in specific
  areas, rather than as a whole.

28
Corporation

• General Motors Corp. is governed by a board of
  directors along with multiple Presidents, Vice
  Presidents, and a Chief Executive Officer
• John F. Smith Jr., Chairman
• G. Richard Wagoner Jr., President and CEO
• John M. Devine, Vice Chairman and CFO

29
Corporation cont

• Founded in 1908
• Has been leading auto manufacturer since 1921
• Also controls GMAC, a financial services company

30
Conclusion

• General Motors is one of the most successful
  companies of our era.
• They have proven themselves by continuing their
  success for over 70 years.
• Have taken advantage of opportunities
• They are a perfect example for any new
  corporation to model themselves after.