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Covers the Micro Compact Car (MCC) a joint venture between German carmaker Mercedes‐Benz and Swiss watchmaker SMH (maker of Swatch and Longine), aimed at the younger adult market. Describes modules, developments, partner co‐operation and production. Chronicles how, in October 1998, the ‘smart’ city coupe went on sale in nine European countries.

In mature industries, downward vertical (line) extension has become an increasingly popular strategy, particularly for automobile manufacturers aiming at expanding their consumer bases and/or avoiding competition in higher market segment. This paper aims to examine how Mercedes-Benz (MB) practiced a downward vertical line extension within the same product category. When commercialized as a product line innovation, the MB A-Class was the first and most symbolic move made by a premium brand in the automobile industry.

This paper investigates the microfoundations of a vertical downward extension strategy. To do so, the authors adopt a narrative style to analyze the story of the MB A-Class from its inception to its commercialization. Secondary data sources, such as company websites, annual reports, internal documents, books, public relations and press releases, were used. Qualitative as well as quantitative performance outcomes were assessed using market and product sales in Western Europe (1997-2016) and the results of an MB brand image survey conducted in 1998 following the accident faced by the A-Class.

The case illustrates that contrary to initial assumptions, lower-quality extensions may be relevant for prestige brands under certain conditions and identifies four strategy components that may drive a successful downward stretch: combine organizational, product, process and marketing innovation with the support of dynamic capabilities; manage paradoxes/contradictions in terms of product development; target the high-end of a lower consumer segment; and adopt a “brand humility talk scheme”.

Existing studies primarily focus on consumers’ evaluations of vertical step-down extensions. Rare are the articles that adopt the company’s perspective. Moreover, additional research is needed to assess the short- and long-term impacts of vertical downward extension on performance outcomes.

The case of the MB A-Class encourages top executives to consider the trade-offs inherent to a down-market strategic move: keeping the (premium) brand’s standards high within a reduced cost/price envelope while learning the codes of the new/bottom of the market. In addition, the A-Class may serve as a fundamental school case for marketing managers and creative advertising agencies on what should and should not be done, whether at the product or at the advertising level.

This paper demonstrates that a premium brand that practiced a vertical downward line extension can expand its sales in a mass market, by targeting a small but growing segment with a high willingness to pay for more expensive products. This adds to the contention that it is not the downscale extension product price per se that negatively affects the parent brand but rather where it stands in the hierarchy of the market segment considered and the ability of the premium brand to integrate the downscale extension to its own history (i.e. combining its original values with tangible product benefits while backing the cause of the new market). Finally, the story of the A-Class strongly suggests that any company needs to upgrade its capabilities as part of the learning process of a new market to convert a business opportunity into a market success.

The principle of modular production has been applied internally by companies since the 1960's. Innovative companies in various industries are now experimenting with application of the concept in a supply chain setting. Modular production makes it possible to further involve distributors and suppliers in the manufacturing process and create a new tier of suppliers in the automotive industry; that of the “zero‐level supplier”. Expected benefits of the increased integration in the inbound and outbound flow of goods are improved responsiveness to customers and increased efficiency. It can be questioned, however to what extent manufacturers can increase the amount of control over operational activities based on networking, as opposed to control based on ownership, without becoming an empty design and marketing company. This paper assesses the impact of the new model of modular production on the dynamics in supply chains as a whole and the consequences for individual players, based on innovative cases such as that of the SMART car.

Although performance‐based contracting (PBC) is gaining importance in manufacturing industries, corresponding research is still in its infancy. In order to provide a basis for future research on this emerging topic, thus paper aims to propose a specific conceptual model.

Conducting a comprehensive literature review, 39 academic publications dealing with this topic in‐depth were analyzed. To structure the various approaches of PBC in manufacturing industries, existing preliminary conceptual models in the form of morphological boxes were built upon and developed further.

Focusing on manufacturing industries, the review reveals a comprehensive view on PBC, with three topics that are important to PBC but have been largely neglected in research: even though research considers PBC foremost regarding manufacturers, independent service providers can also offer PBC; closely related to ownership, financing constitutes an essential issue in PBC; and PBC may include maintenance as well as operation.

First, the paper systematizes existing literature and clarifies the concept of PBC in manufacturing industries. Second, it presents a specific conceptual model for analyzing this topic in more depth. Third, it reveals promising avenues for future research.

Taking successful cooperation in industry as its starting point, this article looks at the key areas where, if the agreed objective of strengthening international competitivness is to be achieved, cooperation among those involved in tourism will be of the greatest importance. Switzerland is about to implent a federal government decree aimed at promoting innovation and cooperation in tourism for this very purpose. It offers financial incentives for innovative projects designed to improve cooperation in Swiss tourism.

Initially examines the changing management culture in Germany. Second, it considers the management competencies required within the German organizational environment. Third, it reveals the main changes taking place in the competencies. Finally, it considers whether the changes in competencies are matching those in the culture.

In view of a lack of understanding of the consequences of performance‐based contracting (PBC), this paper aims to reveal deeper insights into the mechanisms inherent to PBC and explore which benefits and uncertainties may result for providers and customers.

Conducting a comprehensive literature review and drawing on insights from agency theory as a framework, the auhtors analyzed a broad range of academic publications on the benefits and uncertainties of PBC and developed testable propositions from the provider's and the customer's perspective.

With PBC, in comparison to the conventional selling and supporting of machinery or equipment, the manufacturers are more likely to acquire customers for highly innovative technologies, to increase their profit, and to improve customer loyalty. Manufacturers, however, have to deal with uncertain revenues and costs which affect their profit. The customers are more likely to receive increased performance at decreased costs. Concerning the performance, however, the customers enter into an uncertain relationship of dependence.

This is the first paper to analyze the benefits and uncertainties of PBC in manufacturing industries systematically from an agency theory perspective. The paper further develops extant research by outlining the mechanisms of PBC and relating the benefits and uncertainties that are scattered over a broad body of literature. The paper proposes several promising avenues for further research.

The majority of studies on supply chain management (SCM) emphasize the importance of cooperative relationships for improving the integration of business processes into a supply chain. It seems accepted that SCM will be a source of competitive advantage if, and only if, firms that participate in it formalize a strategic partnership between each other beforehand. This article questions whether this really is the case, given that the corporate cultures currently in place are largely founded on a tradition of adversarial relationships, the creation of large groups and the development of vertical concentrations. SCM could, in contrast, in such a case be the catalyst for powerful future strategic partnerships that could gently break arm’s‐length competition.

Shrinking population can have significant negative impacts on the social and economic fabric of a city. This paper aims to understand different urban transportation policies to respond to population decline in shrinking cities by examining two case studies of urban interventions in mid-size cities in Japan.

The paper analyzes the implementation of sustainable mobility strategies in the urban transport sector in the Japanese cities of Toyama and Kanazawa, which risk having their populations significantly reduced in the next decades. The analysis is based on case study research that uses the data and information collected through desk and field research. Interviews with local actors, as well as published policy and academic documents on the case studies provided critical data and information to analyze the case studies.

Both cities have tried to make urban mobility more sustainable via different strategies. Toyama used more structural changes, called the “sticks and dumplings” approach, having land use incentives and the Light Rail Transit reinforced by bus routes as the backbone of its strategy. Kanazawa relied on a city center revitalization plan to densify residential use in the city center.

More structural interventions are necessary to change the declining of shrinking cities, mitigating some of the negative effects. City administrations need to have clear policy priorities and should not allocate their limited resources to competing policy agendas.

The study is unique as it is one of the first efforts to analyze urban transportation interventions in shrinking cities in Japan.