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1. Introduction This essay will explore the extent to which a mature and cyclical product market led to General Motors (GM) restructuring in 2009 following its Chapter 11 bankruptcy protection filing in the United States. It will be debated that market maturity contributed to the company’s restructuring as the increased competition, ailing economy, and product innovation brought up the need for GM to develop a new effective strategy. Although GM enjoyed decades of success as the most important industrial company in the United States, flawed internal structure and lack of focus on the external environment, caused them to fall behind competitors and the realities of market trends. Therefore, when the global economic crisis occurred in …show more content…

According to the PLC, the repercussions of a mature market are increased competition illustrated by Toyota in the case of GM, and decrease in consumer demand. The criterion to stay competitive in the market involves maintaining of product loyalty among consumers by constantly improving products instead of pursuing new consumers. The cause of why market maturity led to GM’s restructuring was that the company had a flawed internal structure that was incapable of adapting to the new innovation and competition that surfaced in the hostile external environment. Therefore, it was crucial to analyze the reasons behind GM’s bankruptcy in order to truly understand what caused its restructuring. The overall argument of this essay therefore is that firms are constantly constrained within the given conditions of the market in which they function. Furthermore, a flawed internal structure will increase threat of new entrants causing disastrous financial losses for the firm. GM’s restructuring improved the organization’s revenue through the reorganization of the bureaucratic structure and implementation of a diversified business that responded to customers’ demands and global trends as

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