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Word Count: 605
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 Fords initial success was due to its achievement of essential economies of scale which was possible to exploit by employing the assembly line Therefore Ford could offer its products at much lower prices than its competitors Even though Ford had an essential first mover advantage and achieved a market share of 557 it was not successful in sustaining this position There are several reasons for it A very important failure was the missing recruitment of professional management This was quite determining for the whole development of the business Ford was personally run and missed the change to benefit from their positive initial development by taking the right action General Motors on the other hand had a team of outside managers which were making much better decisions than the inside directors of Ford Furthermore they had a careful administration Ford was concentrating its business mainly on production They were making hardly any adaptations to the car they produced In the mid 20ies when the shares of Ford dropped while those of General Motors have risen they replaced their traditional Model T with the Model A This
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