Relying on one or two sports car models and nearly going bankrupt and losing its independence in 1993. Porsche had to diversify product lines, and examines the branding implications of the internationalization of production. 1. The company CEO wants to integrate a new member into the Porsche product line-a sport utility vehicle (SUV), a model segment the company has never focused on. The brand extension will hinder the Porsche brand imagery as a result of brand dilution. (When entering the SUVs-market it lowered its brand value). Should Porsche move into the sport-utility market? 2. Porsche’s “Made in Germany” mantra is danger of losing its strength and effective as a brand association. German manufacturing plant is running at full capacity and cannot host the implementation of a new product. The tax in German is high in automobile sector, and high labor cost. How will the company enable the manufacturing of the brand extension? SWOT：
Strength: Porsche is already a luxury brand. Strong Brand/Image; High quality products; Value chain(?); Weakness:
Opportunity: They decided to enter the sport-utility market. This was not an impulsive decision though; the SUV’s popularity with US drivers was because Americans are attracted to large cars and truck that could serve both as a car for work and personal use. Opportunity: Porsche did market research among its customers and found out that many of them were waiting for a Porsche SUV. Weakness: The Porsche SUV targeted the high-end market with its top interior, which was uncommon for an SUV. Option 1: Outsource manufacturing of brand extension to a third party assembler. - Pros: Continue to build brand awareness through the use of “Made in Germany.” The brand image of the Porsche will be no effective. More sources to develop new product.
- Cons: Brand performance is put in danger because the workforce of a third party is concerned with...