Management 14th Edition by Leslie Rue,Lloyd Byars ,Nabil Ibrahim

Exercise 19

Environmental Forces
Summarized below are the descriptions of two environmental forces that could have an influence on the automobile industry. Describe the potential threats and opportunities that might face General Motors as a result of these environmental forces.
Social
Studies of social and economic trends present the auto industry with an enormous population of buyers who are predisposed to purchase and will have the financial means to buy new cars on a regular basis. Three demographic groups that will be particularly significant to the industry are baby boomers, women, and the elderly.
Maturing baby boomers will have far more disposable income available for automobile purchases, and a sizable upscale segment will favor luxury cars and sport-utility vehicles. Baby boomers and the elderly also will increase demand for recreational vehicles (RVs) while reducing the need for station wagons and minivans as their families mature. A large and growing blue-collar segment of the boomers, however, favors pickup trucks and Japanese cars.
Women will increasingly become more involved in new-car purchases and are expected to exercise as much power in the automotive market as men. Automotive marketing successes of the future will be generated by advertising that prominently features women.
The final dominant group, which represents a "graying of America," is buyers 55 and older. They constitute 25 percent of new-car buyers, and this statistic will increase. Older buyers will look for features that make driving safer and easier, including electronic systems to warn drivers who are getting drowsy, nonglare instrument panels, and simplified electronic controls.
Technological
The rocketing price of gasoline has made efficiency a top priority with almost all buyers. The cars of tomorrow will be loaded with intelligent systems: smart computers that run the engine and transmission more efficiently, electronic suspension systems, radar obstacle detection to help drivers avoid accidents, and navigation systems that will help drivers avoid traffic jams while video screens indicate alternate routes. Self-tinting glass and infrared technology that enhances night vision also will be available. Antilock brakes, air bags, and traction control will become standard.
The use of space-age plastics will increase because they are lightweight, less expensive than steel, and noncorrosive. New techniques for making models and prototypes quickly and inexpensively using sophisticated computers are the wave of the future.
The extensive use of robotic technology in production will increase, and automobile manufacturers will develop cars for the future that will run on alternative fuels. The demand for electric and hybrid cars is expected to increase dramatically.