The Competitive Advantages Of General Motors

1121 Words5 Pages
1. The competitive advantage and basis of General Motors till 1975.
Ans: In 1908 General Motors faced a fierce completion from the Ford Motor company when he bought T model in the market and created a mass market for them. T model mainly focused on the middle class segment as a result of which the sell premium car, mainly targeted at wealthy sections of society, produced by GM motors was at stake.
In order to overcome this challenge, Alfred P. Sloan CEO of general Motors devised a new strategy to compete with Ford. He focused on reducing the cost to increase the efficiency of the cars produced by them. In addition to this he realized the need of a particular category of car that would bridge the gap between the inexpensive T Model and expensive GM model. Accordingly he divided the cars into 5 main divisions: Chevrolet which will target to the customers at the entry level of the market. Next is the Pontiac, Oldsmobile and Buick that targeted a group of customers who wants a superior model as compared to Chevrolet or Model T and then the Cadillac that is meant for the the premium segment of people and in each division should develop cars that has a unique characteristics and makes it easier for the customers to differentiate. Moreover each division should maintain their own financial statements and decisions on ROI is made by the manager of each division. This will create a competition between the departments ass each department will try to increase their profits. This in
Open Document