This research analyses the case "General Motors and the Dollar." The case deals with the experience of the corporation during the first half of the 1980s. The case is analyzed in the contexts of (1) General Motors' declining market share, (2) problems associated with the rising value of the American dollar in foreign exchange, (3) the corporation's pricing policy in the early 1980s, and (4) the addressing of competitive opportunities by General Motors in the early 1980s.
Since 1973, the time of the first Arab Crude Oil Embargo against western countries, the automobile manufacturing industry in the United States had been on the defensive against foreign competition. The American industry suffered additional setbacks in the economic recession of the early 1980s, and, although the American Big 3 automobile manufacturers made some progress following the end of the recession, they continued to see their market share erode.
In the mid 1960s, the foreign share of the American new car market was low, and the share of the Japanese manufacturers was minuscule. Japanese products of all kinds, not just automobiles, did not enjoy a high level of confidence among American consumers with respect to either product quality or design innovation. The Japanese, in all industries, set out to change their images among American consumers. Strict attention to quality control, high quality/price ratios, and a can do philosophy brought success for the Japanese automobile manufacturers in the American market. When the energy crises struck in the 1970s, American manufacturers, led by General Motors, said that they needed years to meet tough fuel efficiency standards. The Japanese manufacturers, by contrast, said that they could meet the standards, and proceeded to do so in record time. When air pollution standards were toughened in the late 1970s, the Japanese manufacturers met them within a year. The American manufacturers, again led by General...