Porsche Case Analysis Summary: Automobiles, Mainly Luxury Vehicles (Case Study Sample)
1.Read the Porsche Case Study in the Case Study section of the text.
2.Write a summary of the case study. In your summary be sure to include a discussion of Porsche's competitors, competitive rivalry, competitive behavior, and competitive dynamics.
Your summary should be a minimum of 2-3 double-spaced pages and must be in your own words. Use APA style. You must include 3-5 references. Only one reference may be from the internet (not Wikipedia). The other references must be located within the Grantham University online library. Only the body of the paper will count towards the page requirement. Please see the rubric below.
The ISBN is 978-1-111-82587-4 and the name of the book is Strategic Management by Hitt, Ireland and Hoskisson. It was a study done from Arizona State University. Names of the authors are: Benjamin Archer, Jessica Dunphy, Steven Carter, Ioana Ludwick, Mitchel Nosack and Aatif Qadeer.
Porsche Case Study
Porsche was founded in 1931 by Ferdinand Porsche. The company deals in automobiles, mainly luxury vehicles. The company has continued providing high end cars to its customers, and has been one of the most profitable in the automobile industry. The company suffered a massive hit in its business in the 80s, as its sales plummeted dramatically, rising fears of bankruptcy and possible takeover. However, in a strategic twist, the company managed to turn around its situation and retake the market share it once proudly owned. This case study is going to look at how the company has continued being a market leader, and how it managed to stay at the top even after its merger with Volkswagen. In essence, an analysis of the companyâ€™s business strategy and how it has managed to remain competitive is going to be addressed.
Porscheâ€™s business model is one that is rather anomalous in the automobile industry. Whereas the other companies are focusing their business on volume for profitability and reduction in production costs, Porsche on the other hand has mainly focused on style and healthy profits. The company has the highest profits per unit, among all the companies in the industry. In the year 2007 for example, Porsche was outright the planetâ€™s most profitable vehicle manufacturer per unit. The company focuses much of its efforts on producing few but very profitable units. This has been its main strategy, and one that has ensured it remains afloat the extremely competitive global auto industry.
Due to the fact that the company has the highest profits per unit, it is evident that it places emphasis on the quality of vehicles it produces. The company therefore, places much focus on its research and development (R&D) wing, to ensure that it produces machines that have very few problems. According to Reavis and Henderson (2009), the company invests as much as 12% of its total revenue on research and development. This is double the industry average. Subsequently, Porsche also apportions a significantly higher number of employees in the R&D, for the main purpose of ensuring quality is produced (Hitt et.al, 2007).For example, it employs thrice as many employees in R&D compared to Volkswagen. The merger between the two companies was bound to cause some logistical headache.
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