ECON 2720 Lecture Notes - Lecture 20: William C. Durant, Perfect Competition, Luxury Vehicle
18 Apr 2017
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Driving force behind making buick a major car producer. Car has become a product, no longer a tool or appliance. Henry ford didn"t recognize the rising incomes in the 20"s meant that people were willing to pay for cars with the newest gadgets (significant improvements in the car) Billy durant recognized this and that customers did not have company loyalty. The automobile industry was a perfectly competitive industry. Demand segments shifted very quickly from one buying period to the next. When demand shifts against one firm, it becomes very difficult for that firm to survive. Billy durant was a strong firm in the market. Needed a portfolio to stay in the market. Ford"s production line was so efficient ford didn"t want to change their design (henry ford was stubborn and believed people would come back to the model. Need portfolio cars if people were not interested (to pick up shifted demand)
