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The Smart Car - Case Study

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The Smart Car - Case Study
Christina L. Brown
MRKT 454
Case # 10-2 The Smart Car
June 16, 2012

Competitive advantage exists when there is a match between a firm’s distinctive competencies and the factors critical for success within its industry (Keegan & Green, 2011). There are two basic ways to achieve competitive advantage. First, a firm can pursue a low-cost strategy that enables it to offer products at lower prices than competitors. Next, an advantage can be gained by a strategy of differentiating products so that customers perceive unique benefits, often accompanied by a premium price (Keegan & Green, 2011).

In the case of the smart car, it seems as though the type of competitive advantage that Smart sought to attain was two-fold aiming to achieve a low cost strategy by building “an ecologically inoffensive, high-quality city car for two people” that would sell for about $6,400 along with differentiation by building a composite exterior with panels mounted on a cage-like body frame which would allow owners to change colors by switching panels (Keegan & Green, 2011). Additionally, it would emit almost no pollutants and offer gasoline powered operation using a highly efficient, miniaturized engine capable of achieving speeds of 80 miles per hour (Keegan & Green, 2011). It was in 1991 that the idea was born by Nicolas Heyek, chairman of Swatch. To bring his goal into fruition his company made an alliance with Volkswagen. The alliance with Volkswagon soon dissolved and he teamed with the Mercedes-Benz unit of Daimler-Benz AG. After several months, Mercedes bought out Swatch’s remaining stake in the venture to leverage its engineering skills and broaden the company’s appeal beyond the luxury segment of the automobile market combining ecology, emotion and intellect within the technologically savvy market scope (Keegan & Green, 2011). In 2000 making an additional attempt at differentiation, Wolf-Garten GmbH & Company, a German gardening equipment



Cited: (n.d.). Retrieved June 14, 2012, from Smart Open Your Mind: http://www.smartusa.com/ Andrew Mccredie, P. M. (2012, Apr 23). Will Scions Attract Gen Y Buyers? Retrieved June 6, 2012, from The Vancouver Sun: www.vancouversun.com/cars/Will-Scions-Attract-Gen-Y-Buyers/3575108/story.html Clerk, J. (2011, Feb 15). Mercedes-Benz USA to Take Over Smart Distribution. Mercedes Benz USA and Penske Announced Monday that They Have Started Discussions to Transition the Distribution Rights. Retrieved June 15, 2012, from eMercedesBenz: http://www.emercedesbenz.com/autos/smart/fortwo/mercedes-benz-usa-to-take-over-smart-distribution/ Drive Steady. (2011, August 23). Shocking Teen Driving Statistics. Retrieved June 15, 2012, from Drive Steady: http://drivesteady.com/teen-driving-statistics Keegan, W. J., & Green, M. C. (2011). MRKT 454 Global Marketing. Upper Saddle River, New Jersey: Prentice Hall. ohnonothimagain. (2012, May 13). Smart Face Lifts the Fortwo, But Will Anyone Here notice? Backfires. Retrieved June 14, 2012, from Car and Driver Intelligence, Independence, Irreverence: http://blog.caranddriver.com/smart-face-lifts-the-fortwo-but-will-anyone-here-notice/ Quiroga, T. (2012, March 8). Rinspeed , Shows Dock & Go concept a Smart ED with a "Backpack on Wheels" [Geneva Auto Show]. Retrieved June 14, 2012, from Car and Driver Intellignece, Independence, Irreverence: http://blog.caranddriver.com/rinspeed-shows-dockgo-concept-a-smart-ed-with-a-backpack-on-wheels-geneva-auto-show/ Schefter, K. (2008, Jan 20). Smart Car Offers Drivers New High MPG Option, Top Crash Rating. Retrieved June 6, 2012, from Green Car.com: http://www.greencar.com/articles/smart-car-offers-drivers-new-high-mpg-option-top-crash-rating.php Springwise. (2003, June 2). Springwise.com Your Essential Fixof Entrepreneurial Ideas. Retrieved June 7, 2012, from Springwise.com: http://www.springwise.com/automotive/mass_customized_cars_for_gen_y/ Wikipedia. (2012, May 11). Scion (automobile). Retrieved June 6, 2012, from Wikipedia the Free Encyclopedia: http://en.wikipedia.org/wiki/Scion_%28automobile%29

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