The SMART car: Resources brought by Swatch and Mercedes Benz into the partnership

The SMART car was the result of an alliance between Swatch and Mercedes Benz. What resources did each bring to the partnership? Who gained the most?

Today, all forms of business are extensively globalised, operate in increasingly

competitive markets, are driven by the internet and are highly speed conscious. The

new business world has created numerous complicated challenges for managers

(Wintzer 2007, P.2). These challenges are accompanied by claims of top management

misconducts, ethical mistakes and exorbitant executive compensation (Atomic Dog

Publishing 2001, p.2; Morden 2007, P.4; Certo 2000, p.166). For this reason, corporate

leaders are under unmatched pressure to respond to strategic challenges faster,

responsibly and with greater certainty (Atomic Dog Publishing 2001, p.2; Parthasarthy

2006, p.47). As a result, effective strategic management is critical for survival of all

organizations including the well established firms. A strategy refers to plans made by

the top management in order to develop and preserve its competitive advantage

(Atomic Dog Publishing 2001, p.2; Saloner, Shepard & Podolny 2006, p.25). Strategic

management is wider than a strategy. It refers to a process that entails an analysis of an

organization’s environment by the top management before designing a strategy and

plan for putting it into practice and controlling the strategy (Atomic Dog Publishing 2001,

p.2; Griffin 2011, p.67).Strategic management involves considering what must be done

before formulating a strategy by evaluating the success of an executed strategy.

Resources brought by Swatch and Mercedes Benz into their partnership that

came up with Smart car

The process of making Smart car started in 1994 after a deal was sealed

between Daimler-Benz, maker of Mercedes-Benz and Swatch, Swiss watchmaker (Hitt

et al 2011, p.248; Metais & Pin 2001,p.1). A joint venture of the two companies created

a firm known as Micro Compact Car AG whose headquarters were located in Biel,

Switzerland. After announcing the deal, three co-directors were appointed to head the

new company which was later to be known simply as the ‘Smart’ after moving to

Germany from Biel.

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