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Case Study

MCC smart: Innovators must break rules–but how many?

By Ulrich Steger and George Rädler

23 pages

August 2000

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Reference: IMD-3-0768

Smart is the youngest car maker in the world. The car, jointly developed by Swatch watches and DaimlerChrysler, was initially considered as a revolutionary car. The car was a 2-seater and measured only 2.5 meters. In order to overcome the space limitations, the company offered a “mobility concept.” The car was to be sold through 100 exclusive Smart dealers across Europe. However, sales for this innovative concept were far behind expectations. Initial sales estimates of 140,000 units per year were soon reduced to 80,000 units. At times, even the revised goal posed a real challenge. Industry observers expected DaimlerChrysler to abandon the Smart. Instead, DaimlerChrysler started one last attempt to save the car by installing Mr. Andreas Renschler as the new CEO in the fall of 1999. Renschler is one of the most promising managers of DaimlerChrysler and his task is to “fix it.” The case describes the challenges Renschler has been facing since he took over. The market had changed from ecology-oriented to fun-oriented, the distribution system was considered inadequate and Mr. Jürgen Schrempp, the CEO of DaimlerChrysler, was increasingly running out of patience about increasing losses at Smart.

Keywords

Change, Automotive

Settings

Europe
Daimler, Swatch
1999

Type

Field Research

Available Languages

English

Related material

Teaching note, Video

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