Introduction
Porsche emerged when its founder produced his first sports car. Ferdinand Porsche used his expertise to engineer a quality car that fulfilled his expectations. This approach gave Porsche a powerful image that lasted for many years. Porsche has always supported the needs of its customers. Such practices made it easier for Porsche to compete in the sports car industry. However, the 2008 financial crisis affected the company’s performance. The company has now become a branch of VW. However, Porsche has specific strengths that can make it successful. This essay will analyze the aspects of Porsche’s industry in order to determine the most appropriate business strategies.
Situation Analysis
General Environmental Analysis
Different segments are affecting the performance of sports car manufacturers. The changing expectations of many customers are forcing such companies to redefine their strategies. This demand has affected Porsche’s position. Many governments are focusing on sustainable cars. These issues will have much influence on Porsche over the next 5-10 years.
Industry Analysis
Porter’s five forces
- Bargaining Power of Suppliers: Volkswagen has established a network characterized by many suppliers. These suppliers provide the required materials. The current changes in global oil prices will affect the company.
- Bargaining Power of Consumers: Many customers are looking for fuel-efficient cars. Most of VW’s segments should focus on this changing need.
- The threat of substitutes: Companies such as Honda, Toyota, and Nissan are marketing fuel-efficient cars. Mercedes Benz and BMW are also manufacturing powerful sports cars.
- The threat of New Entrants: The sports car industry is less attractive. Newcomers should invest a lot of money in order to succeed in this competitive industry.
- Industry Rivalry: The existing companies are using powerful strategies in order to emerge successfully. Such companies are using new innovations.
The attractiveness of the Industry
Porsche is operating in a very complex industry. More individuals are purchasing sports cars. The emergence of different economies has increased the market for sports cars. However, newcomers might not survive in this segment. Many car producers have faced numerous challenges in the past.
Competitor Analysis
Strategic Groups
Porsche used to compete with companies such as Lamborghini, Ferrari, and McLaren. However, the company has become a branch of VW. That being the case, the firm has decided to introduce new cars that can satisfy the changing needs of different customers. The firm is also competing with companies such as BMW and Mercedes Benz.
Competitor Analysis
The above competitors have the potential to dominate the market. For instance, BMW has numerous resources. It has manufacturing plants in different parts of the globe. Mercedes Benz dominates various markets across the globe. These firms also have powerful brand images. McLaren also fulfills the needs of its consumers. On the other hand, Porsche produces high-performance cars. The company supports its customers using the best maintenance strategies.
Internal Analysis
The four criteria for sustainable competitive advantages support Porsche’s future performance. Porsche’s cars are superior and impossible to duplicate. The cars are also valuable. The products are also unique and rare. The firm produces powerful cars using edge-cutting technologies. The company’s automobiles are also non-substitutable.
Porsche can use a powerful value chain analysis to achieve its future goals. To begin with, the firm uses appropriate technologies to produce competitive cars. The firm can add value to these activities by producing fuel-efficient cars. Such cars should also be fast and stable. The firm can collaborate with different partners in order to boost its image.
SWOT Analysis
Solutions and Recommendations: Strategy Formulation and Implementation
Strategic Formulation
Customer Analysis
Porsche has always targeted specific customers. However, these customers have become sensitive about the issue of fuel consumption. They are focusing on powerful but fuel-efficient cars. This situation explains why the firm is trying to produce fuel-efficient cars. This “approach is expected to weaken the company’s image.
Current Business Strategy
The firm is using various strategies to achieve its goals. Mathias Muller wants to improve Porsche’s product line. The company focuses on quality cars that can satisfy the needs of its consumers. It has also diversified its cars in order to attract more customers.
Strategic Alternatives
New alternatives are needed in order to make this company successful. The first alternative is focusing on the strengths of the Volkswagen Auto Group. This approach will ensure the company produces acceptable cars. It should also market cars to different buyers across the globe. The other alternative is focusing on its original image. This image focuses on quality sports cars that support the needs of its traditional customers. This business strategy will ensure the company does not dilute its image. The third alternative is striking a balance between the above suggestions. Porsche can produce superior sports cars while introducing new brands such as the proposed Cajun. The firm should also restructure its business practices.
Alternative Evaluation
The most appropriate alternative is producing fuel-efficient cars. VW should also retain the original image of Porsche. This goal can be achieved by producing superior cars such as the Cayenne. This approach is critical because many customers want to retain the same image. These two approaches will create a powerful strategy. Porsche should also embrace new technologies and innovations. The approach will ensure every Porsche car is successful.
Strategic Alternative Implementation
Action Items
Volkswagen should use its strategic alliances to market the Porsche brand. Porsche should also hire competent individuals. The firm should ensure every new car retains the unique Porsche image. This approach will make it easier for the firm to focus on its traditional buyers. The firm should also use modern technologies to produce quality cars. It should also locate its manufacturing plants in different countries in order to improve its business performance.
Action Plan
The firm should identify the most appropriate goals. Porsche should produce new cars that deliver its original image. The firm should employ new engineers to design the best cars. A powerful marketing approach is needed to improve the company’s performance. Porsche should target new markets in Asia, Africa, and Latin America. The firm should also use powerful strategies in order to deal with competition.