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• Identify the links between sentences, noting where sequencing or transitions between sentences bridge gaps—and where sentences could use more cohesion.

Before GM decides to adopt new strategies in cost leadership and differentiation, it would be well for us to inspect the industry to determine which viable options are available. Examining four areas can do this. First, we will look at the existing market forces as determined by the evolutionary stage of the industry. Secondly, we will make an honest assessment regarding the power GM has to successfully execute the desired strategic moves. Thirdly, we will consider the reactions of our rivals once our new strategies are implemented. Finally, we will examine how profitability is affected by the quality of our products relative to our rivals’ and by our share of the market.

The proliferation of computer buying services and new entrants into the industry such as CarMax and AutoNation that place much emphasis on price and quantity of selection has led many analysts to believe that the automotive industry is in its declining stage. They argue that automobiles have begun to be treated like commodities by consumers and the industry is saturated with too many manufacturers and retailers. Although there are presently 37 manufacturers selling vehicles in the U.S., many are very small players in niche segments of the market (e.g., Hummer, Rolls Royce, Subaru). They have neither the resources (i.e., plants or distribution network) nor the desire to make dramatic expansions to become dominant players. On the other hand, the new entrants on the retail side of the business have purchased existing dealerships to practice new retailing techniques primarily based on the Wal-Mart retailing model of strength through size and abundant capitalization. So, instead of the market being in a state of decline, I believe the recent activity signals an escalation in inter-firm warfare, punctuated by historical price and service competition and promotion/differentiation. Since the industry continues to be in a mature stage, our new strategies must highlight GM’s advantages in price and service, while adopting effective promotions that feature cars and trucks that are different from the competition’s in ways that bring clear value. Therefore, we should continue to aggressively cut costs to counter moves by the industry price leaders. We should continue to train our dealer-body to offer a consistently, high, quality retail experience to customers. Moreover, just as the minivan created a new market segment and just as Jeep pioneered the Sport Utility Vehicle market, GM must continue to create innovative products that stand out in the crowded automotive market.