Porsche Case Study

Summary

1 | INTRODUCTION .......................................................................................................... 2

2 | PRESENTATION OF THE GROUP...................................................................................... 2

The company’s history ..................................................................................................... 2

Present situation | Porsche in numbers.............................................................................. 3

3 | THE MACRO-ENVIRONMENTAL FACTORS (PESTEL ANALYSIS) ............................................... 4

4 | ANALYSIS OF THE INDUSTRY......................................................................................... 5

Porter’s 5(+1) Forces....................................................................................................... 5

Market segmentation....................................................................................................... 7

5 | STRATEGIC ANALYSIS OF PORSCHE ................................................................................ 7

6 | SWOT ......................................................................................................................10

7 | POSSIBLE STRATEGIC REASONS FOR PORSCHE’S INVOLVEMENT IN VW.................................10

8 | CONCLUSION ............................................................................................................12

Porsche mastering VW ....................................................................................................12

9 | BIBLIOGRAPHY .........................................................................................................13

Books & Annual Reports.................................................................................................13

Websites.......................................................................................................................13

1 | Introduction

Strong growth, solid benefit: For years Porsche has been driving on the fast track. While Opel,

Ford, VW and Mercedes need to cut jobs, the Swabians have the opportunity to create new jobs.

What is Porsche CEO Wendelin Wiedeking doing differently? How does Wiedeking realize his

strategy? And why should a small and highly profitable maker of sports cars suddenly invest its

fortunes to a struggling mass-producer? That was the question that alarmed shareholders asked

on September 25th, 2005 when Porsche announced plans to buy a 20 % stake in Volkswagen,

Europe's biggest carmaker. Today in January 2007, Porsche holds 27.4 % of VW stocks (wants an

increase to 29.9 %) and is the biggest VW shareholder.

2 | Presentation of the Group

The company’s history

The Dr. Ing. h.c. F. Porsche AG is a German manufacturer of sports cars in the luxury segment

with his domicile in Stuttgart - Zuffenhausen, Germany. Porsche was founded as an engineering

office in 1931. Ferdinand Porsche gathered experience in the development of military vehicles

during the First World War and worked for a number of companies as a constructing engineer

(e. g. management board member and supervisor in the engineering office of the Daimler-Motor-

Association).

On December 1st, 1930 he opened his first engineering office, which transformed into

Ð'»Dr. Ing. h.c. F. Porsche GmbH, engineering and consultancy for engines and vehicle

constructionsÐ'« on April 25th, 1931. There his greatest successes were the construction of racing

cars for Auto Union and his major impact on the construction of Volkswagen.

In 1937 the legal form of organization changed into Ð'»private limited partnership (German: KG)Ð'«.

Between 1944 and 1950 the company evacuated the fabrication to Austria, where Ferry Porsche

constructed the first Porsche named the 356 Nr. 1 Roadster. Ferdinand Porsche’s son, Ferry

Porsche, took over his father’s chairmanship in 1947, while Ferdinand was in French

imprisonment. Ferry inherited half of the shares and built up the sports car company under the

trademark known today.

The daughter of Ferdinand Porsche, Louise PiÐ"«ch, inherited the other half of the shares.

Her husband, Anton PiÐ"«ch, was factory manager and director of the Volkswagen GmbH in

Wolfsburg, Germany during the Nazi regime.

Over time, the personal interaction of the family members and their management functions led

to controversy and family conflicts. Therefore in 1972, Ferry Porsche and Louise PiÐ"«ch decided

for future generations that no family members were allowed to participate in the management

any more. The Dr. Ing. h.c. F. Porsche KG was transformed into a corporation

(German: Aktiengesellschaft AG).

One of the founders’ grandsons, the young engineer Ferdinand PiÐ"«ch, was forced to quit his

service for the development of Porsche and needed to found his own construction office.

Shortly