Sample Case Study On Porsche (Case Study Analyses)

Type of paper: Case Study

Topic: Vehicles, Cars, BMW, Company, Sports, Internet, Industry, Strategy

Pages: 7

Words: 1925

Published: 2020/11/17

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Analysis of the Industry and Competitors

In the course of the world’s financial crisis of 2007 – 2008 which is known to have started in the United States owing to the house-mortgage credit bubble burst, practically all the industries have been hurt. The automobile manufacturing industry was not an exception, especially a sports cars industry. Eventually, in order to survive on the automobile market, Porsche aimed all its forces at inventing a high-efficient gasoline engine.
Then, Audi, Bentley and Bugatti were purchased by VW. Jaguar, Aston Martin and Fiat have also been the subject of those sell-buy of equities trends (Boatcallie, Chase, Salehi, Skrisovsky and Volio 337).
On this issue it should be highlighted that Porsche succeeded in remaining economically and financially independent by avoiding similar acquiring of its shares (Ibid)
Although, Nissan, BMW and GM have manufactured the substitute for Porsche sports cars (the companies even managed to have retained the relatively equal prices and quality inherent to Porsche), those cars were not considered as identical automobiles by the consumers who regardless of that preferred Porsche brand (Ibid 338).
Recently, for the last couple of years, Porsche encountered a more serious challenge rather than a competition created by other its competitors. The new government in the United States (Obama’s administration) launched the amended policy toward the mileage per gallon which all the cars exported to America must comply with. Corporate Average Fuel Economy standard has been increased with the aim of reducing CO2 emissions in the country. So, the new Corporate Average Fuel Economy standard sets forth that the amount of miles per gallon shall be up to 39. It means that the cars which do not meet the abovementioned new standard may not be imported in the territory of the United States (The Porsche Predicament).
It must be admitted that Porsche responded with proud and dignity to the new standard challenge by declaring that in the near future all 911 models would have turbo-charged engines. 911 model has undergone a certain improvement (air-cooling system has been changed for water-cooling system). This new reform allows cars’ manufacturers to change naturally aspired engines for turbo-charged ones which are significantly smaller by size and provide more power and performance. Even a turbo lag has been removed from turbo-charged engines. Needless to say of the fact that turbo-charged engines, among other things, ensure a high gasoline economy and low CO2 emissions (Ibid).
Mercedes-Benz has even reached an essential accomplishment in imitating the sound of a conventional engine. However, despite a useful and necessary trend which may be argued to be a contemporary requirement, Porsche customers claim that traditional naturally aspired engines are an inherent part of Porsche brand and manufacturing line. The fans admit that they value Porsche cars for their ability to remain in trend without being changed (Ibid).
Of course, sports cars industry is likely to generate unprecedented challenges for its manufacturers to remain buoyant. All that considered, Porsche is likely to be one of the companies where excellent brain, creativity and passion will be the key determinants to its successful survival.

Analysis of the value chain in comparison with BMW

Sports cars are obvious to demand high care and attention and by doing so, theirs owners incur solid costs. Porsche has contributed to that meaning. The famous United States research institution named J.D. Power and Associates recognized Porsche’s 911 model the most reliable car. This decision follows from the Vehicle Dependability Study 2011. That survey considered cars which were registered in 2007 – 2008. Nearly 44 thousand United States car holders were invited to participate in the survey and they admitted Porsche’s excellence and quality as a sports cars producer. In addition, the main Porsche’s factory in the territory of Germany has been recognized as the world’s best (Beaman).
Besides that, Porsche is known to possess a rich legacy of participation in different sports cars championships. The numerous victories in Le Mans rallies have contributed to the development of the brand and the overall success of the company. By the way, Targa Florio was the first international contest where Porsche’s participant brought the victory to its history. The next championships were represented by French and German Grand Prix and Formula II the participation in which has added new bright achievements (Porsche Motorsports).
In recent years (2007 – 2011) Porsche has also experienced different awards and accolades coming from the market surveys and researches (AutoPacific Best Sportscar (VSA), Car and Driver Editor’s Choice, Car and Driver Best handling Car in America etc.) (Boatcallie, Chase, Salehi, Skrisovsky and Volio 343).
The company has always been concentrating on quality characteristics rather than on the quantity of the models. Currently, as it can be concluded from the company’s official site, Porsche offers to its customers the following models: the Boxster, the Cayman, the Carrera, the 911 Targa, the 911 Turbo, the 911 GT3, the 918 Spyder, the Pamanera, the Macan and the Cayenne (Porsche Models).
Porsche is constantly bringing innovations to its automobiles, among which are: the seven-gear Porsche Doppelkupplung (PDK) system and the Porsche Torque Vectoring (PTV) system (Boatcallie, Chase, Salehi, Skrisovsky and Volio 339).
For a more qualitative and detailed analysis of Porsche’s value chain and of that one of its competitors, it is proposed to focus on the discussion of the latest Porsche and BMW’s car models – 2015 BMW X6 and 2014 Porsche Cayenne by presenting the comparison of their major characteristics (The Car Connection):

Fuel Economy

Fuel Tank
Steering
Tires
Trailering
Weight
Engine
Mileage
Transmission
Emissions
The comparison proves that both car models are powerful and advantageous in their own ways, while possessing some slight pros and cons making difference only to real professionals in the industry.
Pursuant to Porsche’s Income Statements of 2008 – 2009 and 2009 – 2010, the company’s net profit in 2009 – 2010 amounted to 4,496 million euro in comparison to only 8 million euro in 2008 – 2009 (Boatcallie, Chase, Salehi, Skrisovsky and Volio 341).

Porsche and BMW’s mission and vision statements

The mission of Porsche can be summarized as producing luxury sports cars at comparable low prices affordable to the customers. What is noticeable, Porsche as any ambitious car manufacturer focuses on exporting its products. By the way, Porsche uses the mechanism of exports without setting up its subsidiaries and affiliates abroad or entering into joint ventures. This option now can explain us the way by which the company intends to maintain the prices at affordable levels to the clients. Besides this, Porsche possess the sole production line in its home country – Germany while having a lot of dealers over the globe (Ibid 339).
It does not mean that Porsche has never entered into any alliances or partnerships. In 1999, the company purchased a 49 percent stake in Miseschke, Hofmann and Partner (MHP) which contributed to the technology inventions in production of several Porsche models. In this alliance MHP played the role of the business and technology adviser to Porsche.
A few years earlier, Porsche cooperated with Valmet which was tasked with producing Boxster models outside Germany. Then the parties terminated their partnership relations (Ibid 340).
In its turn, BMW has defined its mission and vision by the following statement: "The BMW Group is the world's leading provider of premium products and premium services for individual mobility." BMW outlines that its brand comprises sports car performance with excellent design and quality at the same time (About Money).

Porsche and BMW’s strategies

Porsche’s official site can provide with the valuable information regarding the company’s strategies. It presents itself as an ambitious car manufacturer. The creative, genius and passionate staff and enthusiastic clients are considered to be the primary emphasize of the company’s activities. Porsche claims to be both a persistent and goal-oriented investor in contemporary business techniques and methods. Porsche’s target is to be a leader on the automobile market. Moreover, the company expresses its direct intent to increase the quantity of its staff until 2018 (Porsche Strategy).
BMW stresses on its official page on the Internet that nowadays world is facing uncertainty and is changing rapidly. The mobility of the people is deemed as the core aspect of the national and international governance. We are experiencing financial and business uncertainty to which a relevant respond is needed. According to those challenges, BMW has outlined the following strategy embodied in two targets:  “to be profitable and to enhance long-term value in times of change”. To reach that strategy, BMW is fulfilling four key aims:  “Growth, Shaping the Future, Profitability and Access to Technologies and Customers”.
Till 2020, BMW will try to become the world’s major provider of premium goods and products for the person’s mobility (BMW Group).
As it can be arrived at, both companies – Porsche and BMW are striving to become the primary leaders in the sports cars industry by inventing and applying superb technologies available to them and selecting the best-qualified personnel to ensure the qualitative growth. However, Porsche, when entering international sports cars market has managed to keep its car models identical by the design, interior and exterior dimensions and performance. This circumstance is hugely appreciated by Porsche customers. Applying this business method, Porsche does not lose its face and stays on the international market the same as it does in the domestic economy (Germany). Porsche’s identity strategy may be viewed as an excellent way of going through years and centuries successful and profitable whatever obstacles the company may have encountered.

Conclusion

Having conducted the present case study, it must be stressed that sports cars industry is really a highly competitive market welcoming only bright minds, industrious individuals with a tremendous passion to what they are doing in life.
Porsche can be considered as a unique survival in producing luxury cars – it managed to preserve the financial independence and important background. BMW is certainly one of the leaders in the sports cars industry however, taking into account all that has been discussed in the paper, BMW falls short of Porsche by many characteristics: history of awards, cars’ design and features, company’s mission and strategy and, of course, a more popularity.

Works Cited

About Money. Company Mission Statements – Complete List of World’s Largest Retail Missions. Web. 17 Feb. 2015 < http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/BMW-Group-Mission-Statement.htm>.
Boatcallie, B., et al. Case 23: Porsche. Print.
Beaman, C. J.D. Power and Associates names Porsche 911 the most reliable sports car. 22 Mar. 2011. Web. 17 Feb. 2015 < http://oneighturbo.com/porsche/j-d-power-and-associates-names-porsche-911-the-most-reliable-sports-car/>.
BMW Group. Web. 17 Feb.2015 < http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/unternehmen/unternehmensprofil/strategie/strategie.html>.
Porsche Models. Web. 17 Feb. 2015 < http://www.porsche.com/international/models/>.
Porsche Motorsports. Web. 17 Feb. 2015 < http://press.porsche.com/motorsport/>.
Porsche Strategy. Web. 17 Feb. 2015 < http://www.porsche.com/usa/aboutporsche/overview/strategy2018/>.
The Car Connection. Web 17 Feb. 2015 < http://www.thecarconnection.com/car-compare-results/bmw_x6-series_2015-vs-porsche_cayenne_2014>.
The Porsche Predicament. 20 Jan. 2015.Web. 17 Feb. 2015. < http://www.carzi.com/2015/01/20/the-porsche-predicament/>.

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