The ascents of both firms were strongly related to key individuals-- Henry Ford, Alfred Sloan, and, to a lesser extent, William Durant--who were able to formulate and implement visions for their companies that were the right ones for their specific eras in the development of the auto industry. Ford's vision was the right one for the nascent industry of 1913, but it was a disaster for the maturing one of 1925. Sloan's vision was far more appropriate to the maturing state of the industry and carried GM to dominance for over forty years.
Perhaps more interesting are the declines of both firms and the endings of their periods of dominance. In both instances the declines were characterized by managerial arrogance, hubris, and inflexibility, and by challenges by upstarts with superior management systems and better approaches to the marketplace. In the 1920s the challenger was GM, and its product strategy and organizational strategy were instrumental in toppling Ford; in the 1970s the challengers were the Japanese auto manufacturers, with lower costs of production and superior attention to detail and quality.
It appears that market dominance may well bring with it, sooner or later, managerial arrogance and inflexibility; if there are upstart rivals waiting in the wings, the firm's dominant position will erode. In the latter half of the twentieth century this has been true of IBM, Xerox, U.S. Steel, and American Can, as well as GM. This recounting should provide some reassurance to students of industrial organization (and to consumers), as well as a cautionary warning to the managements of some currently dominant firms (e.g., Coca-Cola, Microsoft, Intel, AT&T) that market-dominant positions--unlike diamonds--may not be forever.