The Fall of General Motors
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This paper examines the rise and fall of The General Motors Corporation. In the early days of the company it took the reins on the market by giving the consumers what they needed. GM's philosophy was "a car for every purse and purpose." This meant that they rejected the single model approach of Ford and offered an assortment of products in an attempt to blanket the market. They also wanted to make changes and improvements to their models yearly. These innovations in the beginning are what put GM on top of the industry. While GM grew, so did Ford and Chrysler (The Big Three) by taking the same approach as GM was to selling cars. This led the Big Three to have tight oligopoly on the industry. This oligopoly lasted for 50 years, then in the 1970s there was an oil crisis and the US auto industry saw an influx of foreign cars into the market. By this time GM had grown too big from a lack of competition, which caused them to be inefficient. The Japanese companies were smaller and were better able to change to the consumer needs. By making a cheaper more fuel-efficient car than the Big Three capable of making, the Japanese automakers were able to break the barriers of entry into the market and prosper. GM is now seeing the effects of their inefficiencies and poor predictions of consumer demands. General Motors is now in a phase of decentralization, outsourcing component parts in order to become more efficient and cost effective. Through regressions and graphs this paper shows the correlation between both the economic factors and the addition of the Japanese automakers in the US market and the fall of GM.