Daimler Chief Executive Officer Dieter Zetsche had been at the helm of the German luxury automaker less than a year when in 2006 he moved to stanch the eroding position of his flagship Mercedes-Benz unit. The storied brand had fallen behind rival BMW, while Volkswagen's Audi line was in hot pursuit. Zetsche's answer to the crisis? Think small. Despite the fact that Mercedes's reputation was based on the strength of big sedans for the middle-aged affluent, Zetsche figured that a range of upscale small vehicles would raise Daimler's near-term sales volume and attract a younger generation of buyers to propel the brand for years to come. "We were running the risk that our people assume it's a law of nature that we grow slower than BMW and Audi," says Zetsche. "A mindset like that is poison."
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