Mercedes-Benz / Swatch case study

1) The rationale for the joint-venture

2) The significance of modular knowledge in supporting network strategies 
3) How the modular approach taken by MCC was organised Smart started as a joint venture between Daimler-Benz and Swiss watchmaker Swatch. Smarts build small vehicles for people who are sensitive about fuel consumption and parking ease. It will cost both company cost cutting or cost sharing by jointly using facilities or to share facilities and capabilities for a specific function, market or project. MCC ( micro compact car ) is a central contributor and coordinate a group of key suppliers. Besides that, it will also minimize the risk because there is only a minimum operating size in certain products markets.

Smart is an example of a joint venture set up to achieve minimum operating size in a world market with very few individual competitors. The motor manufacturing industry is becoming characterised by alliances, those alliances are between Mercedes Benz and swatch in creating smart. There is hierarchy in the car industry such as drawing , manufacture, design, generate own steel, and sales.

Modularization is currently in focus as a means for increasing competitiveness of industrial company. This leads to definitions of the terms: module, modularity, and modularization. Smart experience a number of challenges Firstly, they focus on customer sensitive to the societal costs of individual transportation Secondly, parking ease. Competition enforces companies to strive for efficiency in the business chain: to reduce costs, increase quality and reduce response time.

Smart have to cope with greater complexities and constantly changing environments Smart Car has been developed to maximize the convenience, comfort, and safety of driver and passenger, while minimizing the impact on the environment. Low fuel consumption The design and marketing strategy was further developed with input from the Swatch watch company. Their target market is Target customers is students, old people, and business people. Modular approach is a strategy that leverages the advantages of modular product architecture.

A modular product is a complex product whose individual elements have each been designed independently and yet function together as a seamless whole. An architecture that specifies what modules will be part of the system and what their functions will be. Interfaces that describe in detail how the modules will interact, including how they fit together and communicate.

Standards are test a module’s conformity to design rules and measure the module’s performance relative to other modules. Modularity-in-design is therefore defined as choosing the design boundaries of a product and of its components In the auto industry, very few companies have advanced very far in the modularization of design Modularity-in-production means, instead, choosing product design and plant design boundaries to facilitate production to meet product variety, production flow, cost and quality requirements.