By Syndicate 1
Porsche, the legendary and independent sports car manufactured was introduced by its founder Ferdinand Porsche in 1900. By 70s and 80s Porsche began producing what become the famous sports car 911. Until know Porsche have five different product line including the 911, The Boxer, The Cayman, The Cayenne and the Panamera. And each product lines have its differentiation in model and segmentation, for example The Cayenne model offered in four different model and compete with another luxury SUV model like the BMW X6 M, Mercedes-Benz ML63 AMG and Audio Q7. The Panamera, Porsche's fastest luxury sedan offered seven diffierent model and compete with Mercedes-Benz S65 AMG, BMW M5 and Audi S8. The Boxer and Cayman and each offered four different model, Boxer compete with James Bond's Z3, The Cayman compete with BWM Z4, Mercedes-Benz SLK models and Audi TT. And the most iconic Porsche 911 today offered over 20 stock models, start from Carrera, Targa, Black edition and Turbo. The Porsche 911 compete with another supercars like Ferrari Enzo, Aston Martin V12 Vanquish, Lamborghini Murcielago and Bentley Continental GT. Before 2010, Porsche did with some strategic partners. In spite of depending on its engineering expertise, innovation, race car Technology, Porsche was also made some strategic partners in order to accelerate their performance as legendary sports car manufactured. Began with bought a total of 74.8 interest in Misseschake Hofmann und Partner (HMP). A specialty of IT technology, process improvement group and SAP (system, application, products in data processing) implementation. Despite of producing the line at the main factory in Zuffenhausen, Porsche also produced many of the Boxer line at Valmet, Austria. In 2010, Porsche was acquired by VW Auto Group (VW) because of financial crisis in 2008. The problem comes up, VW wants to diversify Porsche product line and fit into all segmentation (not only the traditional customer). As such, Porsche will face the risk of diluting its brand, alienating its customer base and potentially destroying its competitive advantage. In the other hand, Porsche face the CAFE regulation in the USA, the regulation of average gasoline per mpg (must be at 39 mpg per gallons). If this CAFE regulation passed, Porsche will lost their number one market, USA. Problem Identification
There are several problems that can be identify from this case: 1. Should Porsche diversify and extend its product line while expanding production? 2. What business strategy that Porsche must take to survive the competition? Case Analysis
Industry structure & Position
The industry suffered from economic downturn. Many car producers bankrupt or acquired by other company, although at that time Porsche managed to stay independent within this industry which require sizable capital investment. Sports car enthusiast are few and fickle and Porsche needs to innovate constantly to cater the demand. Moreover, the increasing oil price, makes people more conscious to conserving energy as well as the CAFE regulation that press automaker producers to create cars with high gasoline efficiency. This CAFE regulations could spell an end to Porsche sales in its number one market, the US. Because of the CAFE regulations, Porsche started to diversified to international scope. China is believed to be the largest consumer segment for Porsche within two or three years. Efficient international expansion of production yields greater economies of scale and increases market pentration. As for position, Porsche has been able to produce equal performance and prestige with more affordable price compared to its competitors (BMW, Mercedes-Benz, Audi, Nissan, etc. The range of competitors became wider because Porsche has diversified itself from only serving sports-car to SUVs and sedans.
Resource and capabilities
Porsche resources comes from racing experience as well as a wealth technological expertise...