Porsche Case Study- Analysis About Its Business Model

Porsche is an automotive brand. Its brand name indicates high quality and expensive cars. Porsche entered into the market and positioned itself as an innovative automobile manufacturer. Their business model was a success. They are specializing in manufacturing of sports cars, sedans and SUV's. A typical Porsche customer will be wealthy and adventurous.

The headquarters of company is situated in Stuttgart, Germany. The company is founded by an engineering genius named "Ferdinand Porsche" in 1931. Ferdinand Porsche was a racer. Also he had an entrepreneurial mind and engineering excellence. At his age of 25, he introduced the first hybrid car to the world.  .

Porsche still keeps its brand value in the automobile industry. It indicates the management strategies that they adopted for over the years. Porsche offers the quality customer services to its customers. The loyalty of Porsche among customers allowed them to make important decisions in business operations. It made Porsche a unique automotive brand in the world.

History of Porsche

Ferdinand Porsche started an office in Stuttgart, Germany on 25 April 1931. It was for the consultation on engine and design. When Hitler came to power, he said to Porsche to find solutions for the difficulties that hampered the implementation of Volkswagen. Porsche developed the design. But the application was rejected by the Nazi government.

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After that Hitler accepted a contract with Porsche to design a car. It was for the Motorsport competition named "Auto Union Grand Prix” in 1939. 3 prototypes were manufactured in 1939. But the competition was canceled due to World War II. After the war, the design Company of Porsche moved to Austria. His son named "ferry" started to run the company in 1946.

Ferdinand Porsche developed his sports car prototype in March 1948. At the end of the year, he started a small-scale production with the help of Swiss financiers. Ferdinand died in 1951. After that Ferry officially took the in-charge of the company. Porsche went through a financial crisis in 2008. Because of this, it sold to Volkswagen.

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Products of Porsche

Porsche has focused on producing sports cars since its inception. It started with manufacturing of Porsche 356 based on the Volkswagen Beetle design. Porsche built a car named "Porsche 911" in 1964. It was outsold well. And also everyone loved it. After the success of 911, Porsche introduced 912, 924 and 928, etc.They continued the manufacturing of new sports cars in the market.

Porsche 911 (1964) model

Company presented a new model named "Boxster" in 1996. This was the first vehicle of Porsche that designed as a roadster. After that, Porsche decided to manufacture other types of vehicles.It started with manufacturing of a SUV. They manufactured a SUV named "Cayenne" in 2002. It was a luxury crossover SUV. It outsold more than the early models.

They produced a model named “Carrera GT” in 2003. It has 8th position on the top sports cars of all time.They introduced Porsche Cayman in 2005. It was derived from 2nd and 3rd generation Boxter. They presented Panamera sedan in 2009. It was their first four-door sedan.

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The Cayenne and Panamera models helped to expanding the target market of the company. Both models attracted many female consumers who want the Porsche experience. In 2013, they introduced a model named "Porsche 918 Spyder". It was a mid-engine plug-in hybrid super car. In 2014, they manufactured a five door luxury crossover SUV named "Porsche Macan".

In 2019, they released an electric vehicle named “Porsche Taycan”. The company has invested mainly in development and research to ensure all qualities. The models of Porsche were reliable and Innovative. Also it is one of the most luxurious brands in the world.

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Current situation of Porsche in the market

In the first quarter of 2020, Porsche delivered 53,125 cars. Deliveries fell 5% compared to the previous year due to the Covid-19 crisis. The Cayenne is the most outsold model in the first quarter of 2020. It has 18,417 deliveries.  Macan took the 2nd position with 15,547 deliveries.

Porsche's worldwide vehicle deliveries from 2013 to 2019 

The Porsche 911 model series has 8,482 deliveries. It also has 16% increases when compared to same period in the last year. Taycan is the first all-electric sports car of Porsche. It reached the market in late 2019. Taycan has 1,391 deliveries in the first quarter of 2020. In the first quarter of 2020, 14,098 Porsche cars were delivered to Chinese customers.

China became the top market of Porsche with most number of deliveries. The United States finished second position with 11,994 deliveries.In Germany, Porsche delivered 5,214 cars to customers. In European market, total of 16,787 vehicles were delivered. A total of 22,031 vehicles were delivered in the Asia-Pacific, Africa and Middle East region.

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Porsche’s cars price

Porsche is a luxury car manufacturer serving specific customers.  Porsche conducted a market study in 1946. It was to determine if consumers were willing to buy an expensive sports car. Since then, high expensive cars have been the focus of the company.

Porsche continues to build high-quality and expensive cars for the peoples who are ready to pay for the brand name.  Prices start at $46,475 and some models can cost $200,000. Macan is the lowest priced model of Porsche. And 911 is the highest priced model.

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Strengths of Porsche

The company developed a strong brand name. That is one of their main strengths. People want to buy Porsche because the name has the brand quality. The company has worked hard since its inception to ensure that all of its products have the highest quality. The production of high-quality vehicles is necessary to ensure the continued growth of the company.

The interior of the vehicle is comfortable. Also Porsche has a traditional style. It provides high technical and visual standards. Although people called the company the luxury market, it was flexible to respond to changes in the market. The company has developed some of the most successful SUV’s on the market.

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The company is strong in research and development. Initially, it invested heavily in the research. As a result, the company was able to become a market leader in many areas. The history of the company shows a commitment to quality, and continuous improvement.

Weaknesses of Porsche

The company has mainly focused on the production of luxury vehicles. This gave higher price to all products. It was expensive for ordinary consumers. Many consumers cannot afford the car because they sell it at high prices.Ordinary consumers view the product as a luxury item. So before they make the decision to buy a Porsche car, they will give precedence to other vehicles.

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Most of the Porsche's  cars are small. So they aren't suitable for all operations. And also most of the assembling process are done in Finland instead of Germany. The company uses Japanese transmission system in their vehicles. It considered as a weakness of Porsche.

The future opportunities

There are many opportunities in establishment and development of green industry for the automobile market. Many consumers are aware of the impact of  their actions on the environment. The development of electric and hybrid cars will make good opportunities for the company.

Porsche Taycan is an all-electric car

It will attract customers who are concerned about the environment but who want to maintain dynamic freedom. The company already manufactured an electric car named "Porsche Taycan" in 2019. Development of automatic and intelligent cars are another option. Entering into a new market will create more opportunities.

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Technology has enabled manufacturers to make smart products. It allows the car manufacturers to add more options in their cars. These features can they help to prevent the accidents or reduce the impact of accidents. It is a great opportunity to reach new markets. Porsche has the potential to expand its presence in emerging markets.

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