You’re most probably aware that on June 1, General Motors filed for Chapter 11 protection from creditors, triggering “the biggest industrial bankruptcy in history”.

(There’s a good briefing in “The Economist” – “The Bankruptcy Of General Motors”.)

Hard to believe now, but GM was once seen as a paragon of managerial and business excellence.

Alfred Sloan’s “My Years With General Motors” is rightly seen a classic business book.

The marketing lessons it contains were reviewed by Jack Trout in chapter 2 of his book “Big Brands, Big Trouble”…

…and many of GM’s problems were the result of forgetting what had made them successful in the first place.

It’s a fascinating story…

When Sloan arrived at GM in 1918, the company was a mess with a grab bag of brands and an irrational product line.

This is clear from the 1921 lineup and the prices…

Chevrolet $795-2,075

Oakland $1,395-2,065

Oldsmobile $1,445-3,300

Scripps Booth $1,545-2,295

Sheridan $1,685

Buick $1,795-3,295

Cadillac $3,790-5,690

Sloan cut the number of brands to 5 and established a clear marketing policy where each brand occupied a clear price and quality position.

This is what it looked like…

Chevrolet $450-600

Pontiac $600-900

Buick $900-1,700

Oldsmobile $1,700-2,500

Cadillac $2,500-3,500

With this multibrand strategy (and, more importantly a clear position for each brand) GM went from strength to strength to the point where it had a market share of over 57% of the U.S. car business.

Alas, success went their collective heads and they forgot what had made the company successful.

The disciplined product strategy was abandoned and over the years the positioning became fuzzy and the company ended up back in a similar situation to 1921, with a range of poorly differentiated cars that compete with each other.

(I’ve only provided a short summary here – it’s well worth reading the full chapter in Trout’s “Big Brands, Big Trouble”).

Now, GM’s woes aren’t solely the result of their marketing blunders and this lack of focus and clear positioning…

…but I’d suggest it’s a big part of the overall problem.

So, it’s well worth taking note of GM’s mistakes…

…and making sure that you have a clear and well thought out position for your business.