Two Titans of Industry – Two Markedly Different Strategies – Which Would You Have Chosen?

First Titan

While Henry Ford is best known as the inventor of the assembly line and modern mass production, these and some 161 other inventions were just part of his grander vision. It was that vision and its realization for which he was most proud — the democratization of travel. Ford envisioned his Model-T in every American garage and a world of travel round every corner.

Introduced in 1908 at a price of $825 the Model-T was an immediate success. By 1916 through continued innovation and efficiencies, the Tin Lizzy, as it was affectionately called was flying off show room floors for $360. Within two years half of all cars in America were Fords. By 1927 its final year, total production had reached 15 million, a record that stood for 45 years.

As Henry Ford wrote in his autobiography, “Any customer can have a car painted any color… so long as it is black”. While the color black became emblematic of Ford’s success, it was the paint’s fast drying time that made it the sole color of choice on the assembly line. And it was black that would eventually lead to Ford’s shortfall and to stubbornly revise his vision or go out of business. Was black Ford’s fatal flaw or his industrial genius?

Second Titan

The year was 1923, four years before the final Tin Lizzy left the assembly line. It was the year Alfred P. Sloan took the reins of a middling and befuddled manufacturing company called General Motors.

By the mid 1920s, Ford’s dream had been realized. Every American it seemed, either owned a Model-T or knew where they could borrow one. They were sturdy, easy to drive and comfortable. Most importantly, with Ford’s universal replacement parts they were easy to repair. While he created affordability through mass production, it came at an unexpected cost. There was no reason to buy a new Model-T when a repair would result in one equally the same — a black Tin Lizzy. With no reason to upgrade, sales began to suffer. While Americans loved their new found freedom, they demanded more than just democracy, they wanted identity.

Alfred Sloan had inherited, through takeovers and mergers, a misaligned assortment of automobile companies, ranging from Chevrolet to Cadillac, Pontiac to Oldsmobile and a few names, too short-lived to remember. But it wasn’t what he inherited from his predecessor that set him apart, it was his innate wisdom to see the American car buyer having a complicated set of needs and wants that could be served and sold. Unlike Ford, who saw the consumer as a monolith at the end of a supply chain. Sloan saw the market from the consumer’s perspective. His philosophy was, “A car for every purse and purpose.” And with that he carefully positioned each car model to attract a unique market segment and price point. This reduced cross line sales while encouraging upgrades from the economy priced Chevy to the luxury Cadillac. And he offered them in colors – lots and lots of colors.

He didn’t stop there. He was the first to introduce annual styling changes, design and engineering innovations and accessories to choose from. And to be sure customers kept coming back, he offered trade-ins on older models and created GMC financing to keep the system moving. All the while, Ford stubbornly resisted change until it was too late. General Motors led in sales for the next 70 years.

So which vision and marketing strategy would you choose?

Ford’s, with his grand vision and engineering genius, revolutionized manufacturing and indeed put America forever on wheels. But for his myopic and monolithic view of that America, he was felled by his own fatal flaw: any color, so long as it’s black.

OR

Sloan’s, who saw not technological advancement, but instead envisioned the crazy, mixed up, confounding, sometimes clearly contradictory, American public’s desire to be free. Free to choose. Free to sell when they wanted. Free to buy what they wanted. And free to finance what they couldn’t afford. Sloan married the automobile to America.

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