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PORSCHE- CASE ANALYSIS
PORSCHE- CASE
ANALYSIS
N a m e o f t h e U n i v e r s i t y
N a m e o f t h e p r o f e s s o r
D a t e o f s u b m i s s i o n
Name of the student
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PORSCHE- CASE ANALYSIS
Contents
Question 1 ..................................................................................................................................................... 2
Question 2 ..................................................................................................................................................... 6
Question 3 ................................................................................................................................................... 10
Question 4 ................................................................................................................................................... 15
Question 5 ................................................................................................................................................... 19
References ................................................................................................................................................... 22
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PORSCHE- CASE ANALYSIS
Question 1
With reference to relevant literature, critically discuss the role of SWOT analysis in
strategic planning. Use SWOT analysis framework to evaluate the factors within Porsche’s
internal and external environments.
Strategic planning provides road map to the corporation’s future and present policies with
respect to internal and external environment in which the firm works. It is a route that provides
the path to the ultimate goals defined by the company for its shareholders, employees and all the
other stakeholders. The objectives of strategic planning are to provide clear communications to
all these stakeholders about the mission, vision and the plans about how it will achieve the short
and long term goals. There are many models which can be implemented for effective decision
making facilitating better tactical options and higher probability of achieving the goals of the
owners.
Although there is no one model that fits to every situation and company because of varied
environment, products, services and amount of competition it faces, but following models can
provide a kind of loose direction to progress in a certain way which can be used for optimizing
the strategic planning.
 Current Situation Analysis
 Segmentation Analysis
 Strength, Weakness, Opportunities, and Threat Analysis
 Core Competencies Analysis
 Key Success Factors
 Business Unit Strategy / Business Plan
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PORSCHE- CASE ANALYSIS
 Balanced Score Card / Evaluation
There are numerous steps which should be followed for the process of strategic planning
which include collection of meaningful data, maintaining data base, creative thinking to analyze
the data collected, defining need gaps, identifying core competencies and understanding critical
resources and skills available with the company.
SWOT (Strengths, Weaknesses, Opportunities and Threats) is a framework which is utilized
by almost every kind of company and has proven for discovery and evaluation of strategic
planning. It is a kind of investigation carried out on the company’s internal and external
environment and an audit tool for the investors to analyze the company. The framework of
SWOT analysis is most useful when it involves a cross section of key managers in the process.
SWOT analysis is a kind of subjective model and hence it is imperative for the investigator to
collect information from varied sources and collect as many point of views. Also, it is a very
convenient way to identify the relative position of the company with respect to the markets,
customers and competitors and evaluates the business in all the specific functional areas within
the business.
Strengths are the attributes related to the company which are special to the company and the
particular company can do that better than the most of the competitors in the given market
conditions. It can include new product development, best training ground for new recruits,
supply chain operations, advertising and marketing, technology, innovation and cost leadership.
These factors should be based on the selection of industry selection and environmental factors.
Weaknesses are the attributes of the company which need to be worked upon in order to
eliminate the present inefficiencies in the company and will lead to the increased profitability. It
is important to get varied views from the functional managers within the company and functional
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PORSCHE- CASE ANALYSIS
heads. The objective views on the weaknesses of the company can be obtained from suppliers
and customers. Multiple points of view will help to guarantee that differing points of view are
aired and all key weaknesses are raised. The key questions which need to be answered while
analyzing the weaknesses are about mistakes to be avoided, areas of improvement and immediate
concerns.
Opportunities are mostly the trends and conditions developing outside the company which
can be leveraged in order to provide the solutions to the surfaced weaknesses of the company.
The opportunities exist in the external environment of the company and thus often the product of
fundamental trends or conditions developing or appearing outside of the company. Two most
important ways to grab the opportunities can be benchmarking the company inside and outside
the environment and analyzing constant changes in the industry.
Threats are the obstacles the company faces in trying to accomplish its Mission, Vision and
Strategic Goals. Threats may include items such as competitor first mover advantage on new
technology or new products. Threats may come from changes in government regulation, or
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PORSCHE- CASE ANALYSIS
lender covenants. Recognition of real or perceived threats is important in the development of a
strategic plan and critical to avoiding surprises that hinder goal achievement.
SWOT analysis of external and internal environment of Porsche.
Strengths
 Established Brand and reputation of 911, Boxter, Cayman.
 Unmatched quality and engineering masterpiece
 Available in almost all car categories
 Undiluted brand proposition
 Loyal customer base
 Robust growth of all the models in all markets
 No need of new and extensive marketing spend
Weaknesses
 Less number of models
 Lack of strategy for internationalization
 Stagnating markets in western countries
 Capital crunch
 Cars cannot be afforded by middle class
 No change in the technology according to the new mileage norms
 Unable to adapt according to preferences towards the small cars
 No production units in Asia and Africa
 Not able to compete with the new players in segment
Opportunities
 Growth through Market Segmentation
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PORSCHE- CASE ANALYSIS
 Economic Growth in Asian countries
 Market potential in small car category
 Production in different countries leading to customized and localized products
 Reaching to the varied customer base like middle class and nuclear families
SWOT: Threats
 Brand dilution because of varied models
 Substitutes in the wake of Oil price appreciation
 Low entry barriers to existing players in the existing segments
 Gas Prices and Consumer Market Changes
 Maturing/Dying Markets of racing cars
 Changed Mileage standards will make the current technology obsolete
The SWOT analysis of Porsche indicates the relation of external and internal environment with
the growth potential of the firm. Porsche is a much revered car in the racing category and
commanded loyal fan following for decades which led the company to focus on its core
competency and never let down the quality of the product. But, during the economic crisis of
2007-2009, people started looking for economy in the cars with rising gas prices. This led the
company to take into consideration the changing customer preferences and legal standards for
mileage and venture into the sedans and SUV categories.
Question 2
With reference to the relevant theory, critically discuss how Porsche’s competitive strategy
will change under VW group.
A competitive strategy is a game plan to fight the competitive forces in and outside the
product category. The direct competition comes from the product and services in the same
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PORSCHE- CASE ANALYSIS
industry like Porsche faces from cars in all categories but the indirect competition is from the
products outside the category like Porsche may face from public transport, motor cycles or
video-conferencing. .. The core concept of competitive strategy is that it concerns with making
plans to secure competitive advantage over rivals. In order to make this strategy the management
needs to plan for competing successfully-its specific efforts to please customers, its offensive and
defensive moves to counter the maneuvers of rivals, its responses to whatever market conditions
prevail at the moment, its initiatives to strengthen its market position, and its approach to
securing a competitive advantage vis-a-vis rivals.
The basic framework of the objective of competitive strategy is to beat the completive
forces by offering better product and services by following customer preferences and doing
things in a better way than competitors. Most of the companies who have been able to make
envious brand had robust competitive strategies apart from focusing on core competencies. They
aim for simply doing a better job than rivals of providing what buyers want and thus securing a...