Porsche's current scenario as explained in the case and swot analysis and porter's five forces model and what all solutions could be drawn and their pros and cons are listed out.

1. WHAT’S DRIVING PORSCHE?
PORSCHE
- There is no substitute

2. PORSCHE
 Founder - Ferdinand Porsche
 Year - 1931
 Services - automotive financial
services, engineering
services, investment
management
 Owner - Volkswagen
 Headquarters - Germany
 CEO - Porsche Matthias Muller
 Tag line - There is no substitute

3. WHAT’S DRIVING PORSCHE
 Porsche has a strong R&D team Bringing the R&D function
of two firms too close together could potentially weaken
Porsche engineer’s sense of belonging and demotivate them.
 Sales fell from 50k to 14k between 1986 – 1993.
 In 1948 Porsche produced its first brand sports car, Porsche
356 series rolled off production line.
 CEO Wendelin Wiedeking – lean manufacturing – lost
concentration on Porsche’s own car design – more
concentration on outside engineering –decided to go beyond
sports car niche.

4. WHAT’S DRIVING PORSCHE
 Porsche cayenne with VW touraeg’s chassis frame was
introduced in the market with higher price than that of VW
touraeg’s - leaded to brand corruption.
 People started to use Porsche cayenne for daily runabout and
failed to understand the importance of the brand Porsche SUV –
sales drop.
 Porsche could test or develop ideas that the company would
not have been able to fund on its own.
 Porsche and VW signed an agreement under which Porsche
was forbidden to design car for any other company between 1.0
through 1.3 engines under loose agreement.

5. Porsche scenario

6. PESTEL
Boston Box
SWOT
Porter’s 5
Forces
Ansoff
Strategic
Planning

7. Why this strategic planning?
 Analysis is required in an organization during the following
decisions
 To launch a new product or service
 Consideration of new route to market
 Working as a part of strategic project team
 Entering a new region or country

8. SWOT ANALYSIS
STRENGTH
 High brand presence and reputation
across globe
 It has supreme style with sporty
features
 One of the most recognized top-of-
the-mind and popular luxury car
brands
WEAKNESS
 Lacking presence in middle income
segment which is expanding at a
phenomenal rate
 Very high maintenance and running
cost in an extremely competitive
luxury car market

9. SWOT ANALYSIS
OPPORTUNITIES
 Capitalize on exclusivity and increase
sales
 Future generation and concept cars
 Increasing manufacturing facilities
and distribution as well as servicing
network
THREATS
 Government policies in some
countries
 Impending recession which may
decrease purchasing power

10. PORTER’S FIVE FORCE MODEL
INTENSITY OF RIVALRY AMONG COMPETITIORS
 Rivalry -extremely high
 Competitors such as Benz, Ferrari, Lamborghini etc.
THREAT OF NEW ENTRANTS
 New entrants are very low
 Due to the factors like capital, brand recognition, large economy etc.

11. THE THREAT OF NEW SUBSTITUTES
 Similar frame to that of Volkswagen Touraeg
 Leads to brand corruption
However both models has its own advantages and
disadvantages
BARGAINING POWER OF SUPPLIERS
 There is no bargain as contract with Porsche represents a
significant opportunity.
 Also has a large supplier base VW.

12. BARGANINING POWER OF BUYERS
 In this scenario the threat is moderate since the buyers are willing to
pay higher price for a premium brand.

13. Bringing up VW and Porsche together –
weaken Porsche’s engineers sense of
Belonging and demotivate them.
SOLUTIONS
 Employees can be motivated by explaining them that the companies
are collaborated hence must be considered as a single company and all
employees must work together for the welfare of the company.
 Employees can be made to work in two separate companies.
 Respect, Trust and value each other
 Show appreciation
 Foster two way communication.

14. “Loose agreement” between Ferdinand
Porsche and VW’s Chairman – 40% of
Porsche’s development capacity belonged to
VW over a certain number of years.
SOLUTIONS
 Renegotiating the terms that the period of years is limited
 With the amount earned in certain period staring as a new
venture and not under Volkswagen group with the title “Porsche
goes independent”
 Renegotiating the terms and conditions in that the percentage of
stake must be reduced to less than 25%

15. Outside engineering services would
become very low since Porsche shares its
innovations and strategies with VW.
SOLUTION
 Create a new company under parent company Porsche let this
new company join hands with Volkswagen so that the Porsche
can outsource its innovation and strategies.

16. Porsche could test or develop ideas that the
company would not have been able to fund on
its own.
SOLUTIONS
 Raise money from donor groups, by conducting super events,
 Sister concerned company can be developed with the help of alumni
and designs can be created and outsourced.
 Based on the profit earned with Volkswagen after a few years of
agreement, start Porsche as an independent automobile venture.
 Porsche should accquire100% share of VW so that it will be the
holding company and there will be an increase in cash flow.
 To market about their new product so that it will create a
demand and their equity share increases

17. WHAT’S DRIVING PORSCHE?