Business Proposal Harvard Case Solution & Analysis


Description of organization

The company, Smart automobile is located in Germany and is a division of Daimler AG. The company started launching its first model in 1998 by the name Fortwo. Currently, the company has launched various variants of the brand and are currently focusing on searching another market for its Fortwo brand. The company is branding quite uniquely through its logo where the “c” refers to compact, and an arrow sign was referring to forward thinking.

Description of product

The Smart Fortwo is a 2.69 meter car in length with high H-point seating and automated annual transmission. The car possesses De Dion tube rear suspension with an advantage of low emission of CO2 and is regarded as the two-part rear hatch. On the other hand, the car has interchangeable plastic body panels with Tridion cells or to be specific prominent steel hemispherical cells for safety. The car can be regarded as either hatchback or convertible, and the basic description suggests that it is a two-door car with rear-engine and rear-wheel drive with the capacity of two passengers.

Reasons for Internationalization

The hybrid model for Fortwo is currently in the planning process  and in order to increase its revenues the company is in search of new markets that have still not been reached by Smart. Going international will help the company to increase revenues and user base and India is an immensely populated country with a growing middle class and high political and economic stability. The factors in India are highly attractive which is why the company prefers to target India as their new destination.

Country Analysis

Political analysis

India is among the largest populated countries with the largest democracy and the business environment in India is controlled by many factors. The taxation system is well developed, and the union government is responsible for imposing major taxes like income tax, sales and services taxes while taxes like Octroi and  utilities are controlled and imposed by local bodies. On the other, the country is very supportive towards privatization and free business environment is encouraged by the government.  The political environment is highly favorable for entering the country.

Economic analysis

The country’s economy is growing significantly and is very stable, and this stability is due to the industrial reform policies presented and adapted in 1991. The economic environment of India has improved significantly, and the reason for these improvements are due to the formation of FIBP, liberalization of the foreign capital, reductions provided in industrial licensing and some other reforms.  The country’s GDP growth rate has increased from 4.35% to 5%, which is a healthy sign for the business community.

Legal analysis

In the recent years, the legal changes in India have changed the business environment significantly. Few of very important legal changes have been implemented in the recent years that have greatly affected the business environment in India. Some of the significant changes have been made regarding recycling, disability discrimination and increase in the wage rates.

Cultural analysis

The Indian culture is a combination of multiple cultures with various religions and languages. The diversification in culture is an important factor to concern for the company as the approach to target the consumers will be a challenging task.

Commercial analysis

The Indian automobile market is significantly growing and has recovered impressively after suffering from the economic crisis in 2008. The growth of the industry is expected to increase with an increase in investments and spending from public and private sector. These investments will be made for the improvement of infrastructure and financial funding for the automotive sector it is a highly encouraging factor for the growth of the industry. The demand is growing, and the major competitors include Tata Nano and Chevrolet which possess great knowledge of Indian market, have a greater share of the market and are not very expensive. On the other hand, these companies don’t have the technological strength to innovate as compared to Smart.

Internal Analysis

Company Strengths and Weaknesses

The company’s main strength includes technological support from one of the parent company Daimler, which helps the company to innovate,and develop the uniqueness the company provides in its designs and features. Secondly, the global presence of the company can help the company to utilize the experience gained from operating in global market places. The company has enjoyed exemption from various taxes in many European countries, and the electric version is environmental friendly as well that helps the car to gain positive remarks.............................

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