Strategic Management

M26BSS

Aurélie Ballenghien
Rémi De Man
Yassin Mezni
Kevin Philip Dada
Emeka Chime
Nkechi Ayaso
1
Introduction
 German sports carmaker

 Founded by Ferdinand Porsche in 1947

 Focus on the luxury niche segment

 Merger with Volkswagen Group

 « I couldn’t find the sports car of my dreams, so i built

it myself ! »

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External Analysis - PEST analysis

 Political: Environmental-friendly company which

innovate in the decrease of CO2 emissions

 Economic: Importance of increase of wealthiest people

to expand its size market

 Socio-cultural: Social mobility should be upward

Car should be considered as a symbol of leisure and
social success

 Technological: Investment in innovation is essential to

provide high technology products

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External Analysis - PEST
conclusion
 External Analysis - Strategy
Group Analysis
 Competitors in the same
industry:
◦ Ferrari
◦ Maserati
◦ Lamborghini
◦ Aston Martin
◦ Lotus
◦ Bugatti

Variables :
Price/Sportiveness
External Analysis - Industry Life
Cycle
External Analysis - PORTER
analysis
 Threat of new entrants:
New entrants have to make economies of scale and to have a
strong brand image to face the competition.
 Threat of substitutes:
Car is the most flexible means of transportation. So, it is not
subject to threat of substitutes.
 Power of Supplier:
As Porsche has 9 suppliers, they need to be the best and
efficient at the innovation level. They are under pressure. It is
a low threat.
 Power of Buyer:
As the car is flexible, buyer used to choose this mean of
transportation. With the development of leasing, their power
increases.
 Competitive Rivalry:
The market is considered as mature. High competitive rivalry
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External Analysis – PORTER
conclusions
Internal Analysis - Resource
Audit

Human: Number of staff, skills, experience…

Physical : Building and equipment, materials

Financial: Global accounts, Control system…

Intangible: Customer loyalty, price premium…

Internal Analysis - Value Chain
Human resources
 Number of staff: 13.043 employees in the 31 October 2010. There are
composed by manager, engineers, salesman, operating employees.
 Skills : Training centre around the world and in Germany give the
necessary base of skills to the employees.
 Training: “ MAX S.p.e.e.d” training program : 24 months of formation for
the employees of the company.
 Motivation: Motivation is driven by financial incentives: a percentage of
the annual turnover is allowed to the employees according the company's
result.
 Recruitment: Recruitment policy in Porsche is quite clear: Porsche wants
high qualified staff. The recruitment processes start until the training centre
Internal Analysis - Value Chain
Physical resources
 R&D facilities: the Research and Development centre in Germany
develops high quality products and try to innovate and create a competitive
advantage.
 Configuration: The plant configuration is a concentration of every
department of the production in a closest place. But some spares part need
to be taken from other locations and sometimes other countries.
 Sources: Porsche is outsourcing a part of the production in Finland. Some
spare parts are procured by the outsourcing plant. Porsche has also built a
strong network of suppliers to provide the best products.
 Costs: High materials costs due to the high technology and the quality
offered by Porsche cars

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Internal Analysis - Value Chain
Financial resources
 Internal funds generation: The major source of the internal funds
generations is the retained profit of the company. This major part is a risk
because of the dependence of the result of the company may influence this
generation.

 Control systems: the management of the financial service is submitted to an

internal control by the company: any transactions need to be defined
clearly for a perfect transparency.

 Taxation system: the tax rate of the company is quite high: 25.4%.This
high rate can decrease the retained profit of the company

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Internal Analysis - Value Chain
Intangible resources
 Technology – ‘know how: Porsche is always seeking to produce high
quality products including the new technologies for the engine, the design,
aerodynamics
 Production systems: Porsche has adopted the Japanese production model:
keep a high quality product in avoiding waste and overproduction
 Customer, supplier and competitor information : Porsche is using SAP
CRM software called Trillium Software who enables an efficient
communication with its supplier and its customers thanks to the ICTs
 Price premium : Porsche offers guarantees of high technologies and high
performance products to their customers.
 Organisation reputation : Porsche was awarded by the price of the most
prestigious automobile brand by Luxury Institute.

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SWOT Analysis
Strengths Weaknesses
- Organisation reputation - Marketing & sales
- Procurement/Purchasing - Lack of diversification
- Strong brand - Focus on the luxury segment leads to
- Strong image restrictive growth in this segment
- Concentration on a profitable niche segment - Dependence on external innovation
- High quality products suppliers
- Optimized value chain - Dependence on Wiekeding as a
- Personnalisation of the brand manager
- Very high margins

Opportunities Threats
-Total GDP and GDP per head growth rates - Foreign trade regulations
-Consumer expenditures and disposable -‘Green’ issues that affect the
income environement
-Expand the product line -High ecological standart in the car
-Increase of the well-off in the emerging industry
countries -strong competition rivalry
-Possibility of conquesting new markets -dependence on oil
-Entering new segments through involvement -Association of Porsche’s brand with
in Volkwagen Volkwagen
-Abolishment of VW law would lead to stronger
influence
-Technological synergy with Volkwagen
Organisational Purposes
 Vision: To remain committed to its own values, to be
the leader in the marketplace offering high quality cars
with most advanced technologies

 Mission: German luxury car manufacturer with strong

values
‘I could not find the car I would been dreaming of. So, I
decided to build it myself’

 Objectives: - conquest new markets

- reach new customers
- reinforce environmental concern
- develop hybrid cars
BCG Matrix
Quality Price Matrix
 Ansoff Matrix
A. Market penetration B. Product Development
•Porsche 911 carrera •Porsche cayenne
•Porsche boxster •Porsche panemera
•Porsche cayman •Cayenne hybrid

•North America •Switzerland

•Germany •South Eastern Europe
•Middle East •Canada
•New Zealand •Hong Kong
•Australia •Japan

C. Market development D. Diversification

•Merger between Porsche and VW • Porsche Panemera

•Asia pacific
•China
•Russia
•Middle East •Porsche Design
•India
Ansoff Matrix
 Market penetration/Consolidation
Porsche 911 Carrera
Porsche Cayman
Porsche Boxster
Porsche Turbo

 Consolidation / Downsizing
North America: -
- Financial Crisis
- Real Estate

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Ansoff Matrix (cont.)
Germany:
- unstable economic conditions
- increase in gas price
- over taxation on vehicles.

 Maintain Market share

- Australia
- New Zealand
- Middle East

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Ansoff Matrix(cont.)
Market development
Merger between Porsche and Volkswagen, enabled them target new
audiences.

Asia Pacific, china, Russia, India, Brazil (BRICS) and the Middle East.
Were the international markets.

 Product Development
Modified products development: -
- Porsche Cayenne
New product development: -
- Porsche Panemera
- Porsche Cayenne Hybrid

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Ansoff Matrix (cont.)
 Subsidiaries :
- Switzerland
- Japan
- Hong Kong
- Canada
- South East Europe.

 Diversification
Related vertical forward movement
- Porsche Panemera
Unrelated diversification
- Porsche Design

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Recommendations
Conclusions