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 …show more content…
Some owners state that the Smart’s small stature makes it easy to get around in large cities where parking is limited and that not only is it and extremely safe car, but the plastic panels prevent dings and leave the car in tact in accidents where a larger more costly car would be left, sitting on the side of the road waiting for a tow truck. In 2008, the Insurance Institute for Highway Safety (IIHS) crash tested the 2008 Smart Fortwo and found it performed so well that it earned the Institute's best ratings for front and side crash protection. Plus, its rear crash worthiness was rated as "acceptable," the Institute's second-highest rating [ (Schefter, 2008) ].
Industrial growth patterns generally reveal consumption patterns. Also, production patterns are helpful in assessing market opportunities [ (Keegan & Green, 2011) ]. Additionally, trends in manufacturing production indicate potential markets for companies that supply manufacturing inputs [ (Keegan & Green, 2011) ]. As secondary data can be quite costly, to examine the Market potential in the U.S. for the Smart Car, I will attempt to determine the market potential based upon the information found via the internet. The second generation Smart Fortwo, was redesigned with the U.S. market in mind [ (Schefter, 2008) ]. The changes included ensuring the new car met emissions regulations in all 50