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Introduction
In 1921, the General Motors (GM) Corporation established a special product policy committee led by Alfred P. Sloan to develop a comprehensive repositioning strategy that would establish a series of products with corresponding price levels differentiating the existing GM automobile divisions. Prior to the development of this strategy, GM had a great deal of overlap in products and price levels across the various divisions that they manufactured and sold. This was due in large part to the nature of the origin of GM that consisted of individual automobile companies that had been brought together by William Crapo Durant. The strategy developed in 1921 resulted in a segmentation scheme that created distinct target markets for the various GM divisions and would reinforce the market positions of these products in the US marketplace. With this strategy in place, GM would ultimately become the world's largest and most profitable corporation and become an icon of corporate efficiency and success ([32] Pelfrey, 2006, p. 273). The problem of product and price overlap that was addressed by GM in 1921 has reappeared in recent decades and has direct parallels with the strategy that has been undertaken by the company almost 100 years later.
This paper provides a historical review of the 1921 repositioning strategy that was instrumental to GM's success for several decades following its implementation. The events surrounding the 1921 product repositioning strategy (henceforth called the Sloan repositioning strategy) are first examined and the paper then traces its evolution from its inception to the present time. It is explained how a later deviation from the Sloan repositioning strategy was related to the company's ultimate marketplace decline, bankruptcy, and reorganization. GM filed for bankruptcy protection in June 2009 after several years of sustained losses and a continued downward spiral in market share. As part of the subsequent bankruptcy proceedings, GM recognized that its duplicate product lineup could be trimmed by eliminating products in the same segment as well as returning to clearly segmented pricing strategies (Vijayenthiran, 2008). The review presented in this paper also shows that although GM deviated from its own pricing strategy that led to its early success, a successful competitor utilizes strategies that are very similar to the seminal Sloan repositioning strategy.
Background
GM was...