Case 10-2: The Smart Car

  • What is Smart’s competitive advantage? Brand Promise? Positioning?

Smart Cars’ competitive advantage include several characteristics. The most important of them are:

The company offers a small car to address the issue of traffic jam and driving at congested roads. It also offers a vehicle that offers that has a unique design with smart features to fit in a small space. The company offers a small-secure ride to two or in some cases a single person and is likely to be the answer of future traffic issues. The company offers an eco-friendly vehicle to ensure that people perceive it as the technology of the future. The electrical engines on which these car ran targets customers sensitive to the use of natural resources as fuels. It also offers efficiency and ease in terms of its expense. Gasoline use in the car is effective as miniaturized engines that offers more mileage in less consumption. For young people with small jobs and couples without babies, the car is an attractive choice

  • How does the Smart compare to the Honda Element, Scion iQ, Kia Soul, or Fiat 500? Are these models targeting the same consumers as the Smart?  In view of the Japanese carmakers’ success with these brands, do you think the Smart’s U.S. launch is too late?

Smart Cars’ competitors include “The Element” by Honda, “The Fiat-500” and Ki-Soul along with Sci-iQ.  These cars have normal range and though there size is not as small as Smart-Car’s size, the vehicle offer a better image and shows a vehicle that is better looking than its original price. It is important to understand that though smart car is efficient in fuel, the maximum per hour speed, the pick and certain features are less than the above mentioned competition. However, the differentiation created by Smart-Cars ensures greater security of the company’s brand image in the market than its competitors because those are less attractive for eco-friendly people and the ones who like small cars.

  • As noted in the case, Penske Automotive Group is no longer the distributor for Smart USA. How will this affect Smart’s fortunes in the United States?

Penske Automotive group withdraw their dealership agreement of Smart Cars owing to the failure of cars’ sales expectation. The group has immediate results at start but for different reasons, it failed to keep the phenomenon intact and ultimately couldn’t afford the drop of sales. The smart cars ambition to take the market within few years are greatly hurt by the decision of the group. The people looking for a smart, small, eco-friendly vehicle are not enough for dealers like Penske Automotive to keep themselves intact. Smart Cars need to offer more than two seaters as they often comes in competition with other two-wheel drive.

  • Evaluate Smart USA ‘s social media strategy. What additional channels or tactics would you recommend?

The company’s social media strategy is to position itself within different segments of the groups like young people, families without children, parents looking to gift their children with vehicle and many others.


The company should look to offer its product to all the segments i.e. baby boomers by showing diversity in their advertisement. They can hit the segments through various means i.e. by showing a grandparent driving with a grand-son to a holiday or a house-wife driving her smart vehicle to the grocery store.