In The Essential Drucker, Peter Drucker tells the story about what led to their turnaround:
“The Cadillac people say that they make an automobile, and their business is called the Cadillac Motor Division of General Motors. But does the man who buys a new Cadillac buy transportation, or does he buy primarily prestige? Does the Cadillac compete with Chevrolet, Ford, and Volkswagen? Nicholas Dreystadt, the German-born service mechanic who took over Cadillac in the Great Depression years of the 1930s, answered: ‘Cadillac competes with diamonds and mink coats. The Cadillac customer does not buy transportation, but status.’”
Cadillac was not a car, it was a luxury item first and a car second.
Which means it competed with other luxury items first and other cars second.
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