Porsche

Porsche Changes Tack

Case Study
May 8th, 2013

Marius Zechner
Dominik Backs
Lili Nottrott
Pia Freitag

Risk Management and Derivatives 723G

Index
1.History / Family background
2. Statistics
3.Strategies
4.Marketing
5.Creation of competitive
advantages
6.Risks
7.Shareholder Wealth vs.
Stakeholder Capitalism

Risk Management and Derivatives 723G

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

Ferdinand Piech,
Chairman of VWs supervisory
board

Wendelin Wiedeking,
former CEO of Porsche
GmbH

Risk Management and Derivatives 723G

Statistics

Risk Management and Derivatives 723G

Statistics

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Strategy 2018
Weve always been ambitious.
And well make sure it stays that way.

Risk Management and Derivatives 723G

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

Risk Management and Derivatives 723G

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

Risk Management and Derivatives 723G

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:
mail)
Place:

comsumer focused advertising (TV, direct

Europe (911)
North America (Cayenne)

Risk Management and Derivatives 723G

Marketing
(Segmentation)
Exclusive Sports Car Manufacturer

Top Guns:
Elitists:

driven, ambitious
blue blood, not price sensitive

Proud Patrons: ownership is goal, trophy for hard

work
Bon Vivants:
adventures
Fantasists:

Jet-setters, thrill seekers,

car is escape,

Risk Management and Derivatives 723G

Everyday users: enjoy, younger drivers

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
Risk Management and Derivatives 723G
Lack of social relations or good PR

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:
of VW

Porsche increases external liabilities for takeover

& inhouse construction of Panamera
this high liabilities in connection with the financial
crisis brought down the company in the end

Risk Management and Derivatives 723G

Shareholder wealth vs.

stakeholder capitalism
How to get capital?
In general:
Bank-

Anglo-Saxon-Model vs. Continental-GermanModel

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

Risk Management and Derivatives 723G

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 shareholders will
Scare off capital of investors

Risk Management and Derivatives 723G

sources
http://www.porsche.com/middle-east/_ghana_/aboutporsc
he/overview/strategy2018/
http://www.iei.liu.se/fek/frist/723G33/yinghong-files/1.4
60514/Porsche_Changes_Tack.pdf
http://www.porsche.com/
https://www.youtube.com/watch?feature=player_emb
edded&v=WWRA1ABlFnw#!

Risk Management and Derivatives 723G

Thank you for your

attention!!

We hope you all have read the case and do not have
any questions!