1. GM vs. Toyota
GM’s share of the domestic car market was 35% in 1991. That number is just over 20% now. Almost all of its losses were to foreign car companies, most of which were Japanese, the biggest of which was Toyota. By, 2008, before its reputation and sales were damaged by recalls, Toyota had 17% of the US market. That number was about 8% two decades ago. Honda and Nissan have also made substantial share gains as well. The reasons for GM’s decline have been regularly catalogued. GM’s labor costs were the highest among global manufacturers. Toyota’s were relatively low, particularly for the cars it produced in Japan. GM’s cars were poorly made. Toyota were well made. GM’s quality problems triggered low ratings in consumer surveys like those issued by JD Power and Consumer Reports. Domestic market share has not remained static recently. The low-cost, high-quality part of the market has been invaded by South Korea’s Kia and Hyundai which now have more than 7% of the American market. That share continues to rise rapidly.
2. Dell vs. Acer
Dell was a dominant PC company in the US for nearly a decade, and had a large share of the global market as well, usually trailing market rival Hewlett-Packard by a modest amount. HP’s PC operation was created by its buyout of Compaq in 2002 for $25 billion. The relative strength of the US computer companies began to erode after Chinese manufacturer Lenovo bought IBM’s PC operation in 2004 which gave the Asian firm access to the US and European markets. Dell’s fortunes were damaged further with the widespread adoption of the netbook. These were inexpensive and light laptops which were sold for about $300 and were used for Internet surfing and email. Many consumers flocked to the new machines Acer and Asus introduced to the market. Acer was able to use the popularity of the netbook and a 2007 buyout of US PC company Gateway to become the third largest PC maker in the world. Dell’s market share dropped from 16.4% in 2005 to 12.9% in 2010, according to Gartner. Over the same period, the global market share of Acer rose from 5.5% to 12.7%. When business historians look back on the changing of the guard they will also remark that within three years of the rush of netbook sales, tablet PCs became the primary growth segment of the industry and it is now Apple which is gaining more global share than any of its rivals.
3. Intel vs. ARM
Intel has approximately three-quarters of the global market for PC and server market chips. That gives the company tremendous leverage as a manufacturer, researcher, developer, and marketer of new chip lines. Intel’s trouble, however, is that the rapid growth in the semiconductor sector is among products for portable devices, particularly smartphones and tablet PCs. The major suppliers to this market are Qualcomm, Texas Instruments, and Samsung. These products are based on designs by ARM. ARM has begun to use the power-consumption advantages of its chips and its relationships with portable device manufacturers to enter Intel’s stronghold in the PC market. It has already begun to take business in the low powered server market. Industry research firm IDC expects ARM to have 13% of the PC market by 2015. It is widely rumored that Apple has already completed plans to run many of its tablet PCs on ARM-design based chips. ARM’s large lead in wireless portable devices should help it erode Intel’s market share in PCs by several percentage points within four years.
4. Boeing vs. Airbus
Boeing had been the dominant global manufacturer of commercial airplanes for three decades, a position it enhanced when it bought competitor McDonald Douglas for $13.3 billion in 1996. European rival Airbus was still not a significant force in the market then. Airbus received 106 orders for new aircraft in 1995. Boeing got 441. Airbus received 574 orders last year to Boeing’s 530. Two factors caused much of the change in share. The first is that Airbus has had the financial support of owners and previous owners which include major aircraft companies, some of these government-backed, and from Germany, France, the UK, and Spain, Airbus has been accused of benefiting from illegal subsidies, but that has not hurt its progress much. The other factor that has helped Airbus is the poor management at Boeing. Its new flagship 787 Dreamliner has been delayed at least half a dozen times, and this has caused major carriers to reconsider their relationships with it–usually to the benefit of Airbus. Airbus is not perfect, however. It recently delayed two models. The global balance of power for aircraft sales is about to change again. Comac, a China state-owned company, plans to release its mid-sized C919 commercial passenger jet in 2016. China will be by far the largest commercial aviation market by then. Carriers outside the People’s Republic will clearly buy from the lowest cost producer, whether it is based in the West or not. (Editor’s note: Airbus just signed a $17.2 billion plane order with AirAsia, the largest single contract in airline history)