Competitive Analysis Between Ford and GM Essay

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Discuss the competitive rivalry between the two companies

The auto industry is one of the most competitive industries in the world, with more and more classes and types of vehicles being manufactured and unveiled every year. Two of the leading companies in this industry include General Motors and Ford. The intense rivalry between Ford and General Motors is considered to be the mother of all competitions, with the rivalry starting out as early as 1908. The two companies have been contesting it out for returns, market share, and also boasting rights. In the contemporary business setting, these two major firms in the auto industry are battling a serious content over market share. In particular, General Motors is presently the leader in general, however there continues to be debate as to who is the actual winner. In accordance to statistics, General Motors has a market capitalization of $50.9 billion whereas Ford has a market capitalization of $44.8 billion. With respect to revenues, the competition between the two companies is all the more intense with GM having sales of $166.4 billion whereas Ford generated $151.8 billion in revenues. With regard to the net incomes generated in the latest financial year, Ford had $4.6 billion in profits whereas GM generated $9.4 billion (Dunn, 2017).

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How do these firms interact with one another in the competitive environment?

Without a doubt, General Motors and Ford interact with one another in the competitive environment. One of the ways in which this takes place is the pursuit of economies of scale. Being in the automotive industry, the evolution has been steered by the endeavor to find scale economies. This is owing to the reason that the relationship between market share and return on investment for the companies is stronger in industries that are mature compared to industries that are emerging. Another significant manner in which the two companies interact in competition encompasses differentiation. Imperatively, selecting a particular market segment can be a fundamental determinant of dissimilarities in the performances of the firms within the similar industry, such as GM and Ford. For instance, in the present day market, both companies are incessantly trying to escape the serious level of competition in the marketplace through crossover vehicles that are dissimilar from the prevailing market segments. The companies are constantly attempting to satisfy consumers with their needs and come up with features that are not only….....

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