Porsche
Porsche Changes Tack
Case Study
May 8th, 2013
Marius Zechner
Dominik Backs
Lili Nottrott
Pia Freitag
Risk Management and Derivatives 723G33
Index
1.History / Family background
2. Statistics
3.Strategies
4.Marketing
5.Creation of competitive advantages
6.Risks
7.Shareholder Wealth vs. Stakeholder
Capitalism
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History and Family Background
Ferdinand Porsche,
Founder of the Porsche
Company (1931)
Louise Piech
Ferry Porsche
History and Family Background
Wolfgang Porsche,
Former boardmember of Porsches
directorate
Wendelin Wiedeking, former
CEO of Porsche GmbH
Ferdinand Piech,
Chairman of VW´s supervisory board
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Statistics
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Statistics
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Strategy 2018
“We‘ve always been ambitious.
And we‘ll make sure it stays that way.“
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Marketing (Portfolio)
Exclusive Sports Car Manufacturer
911
- Presenting the brand
- Growing old; replacement needed
- Sales peak in 2001/02; 15% decrease after
- Prices high; highest margin
- Not price elastic
Boxster
- Introduced in 1996
- Entering low price market
- Less sensitive for business cycle
- Sales peaked in 2000/01
- had to compete with BMW
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Marketing (Portfolio)
Exclusive Sports Car Manufacturer
Cayenne
- Entering sports utility vehicle (SUV)
- Very quick success
- Criticism; Comparable to VW Touareg
Panamera
- Premium class, four door, four-seats
coup sportscar
- Price between $125.000 – $175.000
- Premium product market segment
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Marketing (Positioning)
Exclusive Sports Car Manufacturer
High Price and High Quality
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Marketing (Marketing Mix)
Exclusive Sports Car Manufacturer
Product :
high quality
high performance
exclusive
Price:
high price
elite status
Promotion:
comsumer focused advertising (TV, direct mail)
Place:
Europe (911)
North America (Cayenne)
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Marketing (Segmentation)
Exclusive Sports Car Manufacturer
Top Guns:
driven, ambitious
Elitists:
blue blood, not price sensitive
Proud Patrons:
ownership is goal, trophy for hard work
Bon Vivants:
Jet-setters, thrill seekers, adventures
Fantasists:
car is escape,
Everyday users:
enjoy, younger drivers
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Creation of
competitive advantage
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Risks
Currency:
- Production base in Euro-area, therefore risk only at
sales
- demand focuses on global markets
 FOREX trading (exchange rates variations) against
risk they apply hedging (derivatives, forwards,
futures)
Political uncertainty:
affects any MNE, political decisions can
destroy corporate strategy. EU is relatively
free of political uncertainty.
However: - Lex VW (law of VW), that no shareholder may have more than
20% of voting rights, despite the number of shares
- 2009, country of Lower Saxony publicly opposed the takeover
of Porsche
- Friendly joint venture was soon considered as hostile takeover
by Porsche management
Lack of social relations or good PR
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Risks
Outsourcing:
decay of quality of manufactured products and control
in general
 lack of knowledge and industry
 country becomes less desirable for investors
Porsche fights against this risk by investing in human
capital (their biggest asset)
Credit:
Porsche increases external liabilities for takeover of VW
& inhouse construction of Panamera
 this high liabilities in connection with the financial
crisis brought down the company in the end
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Shareholder wealth vs.
stakeholder capitalism
How to get capital?
In general:
Anglo-Saxon-Model vs. Continental-German-BankModel
Porsche:
- preference shares and ordinary shares
 different voting rights
stakeholder orientated (stakeholders = family)
- dividend was not issued to shareholders
 cashflow of high profitable car sector was used to
takeover VW
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Shareholder wealth vs.
stakeholder Capitalism
Porsche refuses to make quarterly reports (rational strategy
– less information for potential competitors)
Not listed at a german stock exchange
They gain capital from outside at London Stock Exchange
Risk of scaring shareholders, because management ignores
shareholder‘s will
 Scare off capital of investors
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sources
http://www.porsche.com/middleeast/_ghana_/aboutporsche/overview/strategy2018/
http://www.iei.liu.se/fek/frist/723G33/yinghongfiles/1.460514/Porsche_Changes_Tack.pdf
http://www.porsche.com/
https://www.youtube.com/watch?feature=player_embedded&v=WWR
A1ABlFnw#!
Risk Management and Derivatives 723G33
Thank you for your attention!!
We hope you all have read the case and do not have any questions!