Differences Ford and GM 1920
The differences in strategy between Ford and General Motors in the period after 1920 In the 1920ies the automobile industry grew rapidly and became soon the biggest industry in the US. The more traditional transportation industries as ships, locomotives and railroads grew much less at the same time. At the end of the 1920ies the US produced a large percentage of the whole world output. In the industry two important players were Ford and General Motors. Ford was a first mover that invented the assembly line, which gave him the opportunity to enjoy large economies of scale. The other major player was General Motors which was Fords major competitor. The two different companies developed very different. In this paper 3 different strategic choices will be demonstrated as well as their impact of the success of the two companies.Ford's initial success was due to its achievement of essential econ
This was not very successful as again Ford lacked the organizational capabilities. These arguments lead all to the development that General Motors was going through a remarkable period of success gaining market share and competitive power. They were the only auto manufacturer, which made extensive investments in research and development. Furthermore, they had a careful administration. Even though Ford had an essential first mover advantage and achieved a market share of 55,7% it was not successful in sustaining this position. At the same time Ford was loosing market share and had to realize that they had poor organizational capabilities as well as made some major strategic mistakes by just concentrating on producing one type of car. Other car manufacturers which obtained their material from outside suppliers where less affected by the recession than Ford. The need for high capacity utilization of the factories led to high investments in production of material needed for the production process. Ford was a highly integrated company. Another difference in the history of the two firms was the degree of integration. All other car manufacturer expanded by moving to distant geographical markets. Furthermore, they had many different models. A very important failure was the missing recruitment of professional management. General Motors was also affected by the dropping demand, but was better off as they could get their parts needed for the production from cheap outside suppliers, that themselves were affected by the recession.
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