Porsche Analysis

free essayPorsche Company is an automobile manufacturing company with a well-established and world-recognized reputation. Its cars help the drivers to win the world’s race. The edge-cutting technology, engineering and fabulous design of its products have pointed Porsche’s cars far ahead the competitors’. Apparently, the reasons for the company’s success are rooted in its strategy and history.

The History, Products and Competitors of Porsche

Ferdinand Porsche established Porsche in 1931 together with the founder of VW Ferdinand Piech. The company specialized in the manufacturing of the sports cars as well as in the luxury designing and engineering. With more or less permanent success, the company has occupied the area of the luxurious cars and merged with VW. Porsche manufactures few models, which can be diversified greatly. At the moment, 70% of its cars are still in operations (Henderson, 2009). The list of the key Porsche’s competitors includes BMW, Audi, Mercedes Benz, Ferrari, and Jaguar.

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One of its famous products refers to Porsche 911 that has been manufactured in 1964. It has quickly become one of the world’s famous automobiles for its exclusive design and extraordinary technology. Porsche’s cars are recognized for the high performance rates, outstanding handling, and cutting-edge engineering. The majority of victories were made with the help of these automobiles.

SWOT Analysis of Porsche

The SWOT analysis provides for the determining of the strengths, threats, opportunities, and weaknesses of the company.

Strengths. The strengths involve the benefits the company can profit from. In the case of Porsche, these include the high brand presence and reputation. In comparison with the new automobile corporations, Porsche should no longer invest in the strategies aiming at brand building. Apart from that, the target audience of the company consists of the extremely rich individuals that do not need the extra channels for communication (Alves, 2013). These people usually can afford the new models of cars, and the money is not the issue for them. Here, the company can try the innovations and carry out the experiments to please the customers and remain modern. Porsche still can benefit from the brand extension as the company has few car models with the variety of the possible options (Baur, 2015). There is definitely room for growth. Porsche has also developed strong connections with the race organizations so that its cars are closely associated with the racing that also raises the rate of brand awareness and recognition.

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Weaknesses. Just as any other company, Porsche has to deal with many challenges in various branches of the production. They are both external and internal ones. First, it should be stressed that Porsche’s target audience includes the upper-middle class and, thus, it loses many the customers belonging to the middle class. One of the reasons for that are the high costs associated with the maintenance of the cars. Thirdly, the luxury cars market is extremely competitive, and so far, the company has not managed to produce the cars with the decreased running costs. Thus, in this regard, it has no competitive advantage compared with the similar brands.

Additionally, recently, Porsche experienced the hardships in the cooperation with the banks. Under normal conditions, banks willingly finance the company. However, after the refinancing that has occurred in 2009, Porsche has been facing the complications in obtaining the new credit lines from the financial institutions.

The size of the company itself is small compared to the competitors. Furthermore, the number of the units belonging to the company have shrunk and increased over the course of years that testifies about relative instabilities within the company and its vulnerability in the markets.

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Opportunities for the car company include the various options that could be capitalized in the future. Those do not necessary refer to the monetary assets. For example, Porsche might consider the ways for leveraging from its brand. The exclusivity could be profited and sold on the general market, as well. In this case, the company would have to introduce the new marketing and communication campaign. The future generations and concepts of the cars also give room for new ideas. The company might speculate on the new technologies and consider the ways for creating the competitive advantages. No doubt, the brand and exclusivity are brilliant non-pecuniary assets the company disposes of at the moment. The quality of its cars is also non-doubtful. However, perhaps, it is the right moment for the company to consider the possible options for attracting the new clients and expanding its international network. The company has strong support in Germany. Additionally, it has a largely developed manufacturing infrastructure in the country.

Threats. Traditionally, the key external factors that might affect the well-being or even the existence of the company concern the legislation of certain countries. It specifically applies to the emerging markets and those markets that have high promising opportunities and increased risks. On the other hand, the company has to compete with other automobile giants with the diverse target group and model offers, including BMW, Mercedes, etc. The impending recession within the European area, as well as the global crisis, means that the target audience of the company shrines. In case this tendency becomes steady, the future of the company might be jeopardized. Finally, the CAFÉ regulations might negatively affect the size of Porsche’s shares on the US market.

How It Works

Financial Performance of the Company

Out of 2009, the financial positions of Porsche Company are not among the strongest ones. Compared with other companies operating in the same industry, Porsche has the lowest profit rates. Its revenue equals to 10,060, and its net income is 9,400 (Henderson, 2009). The percent on R&D is 11.8. The number of employees involved in its operations is estimated at the point of 12,202 (Henderson, 2009). Nevertheless, analyzing these indicators of financial performance, one should bear in mind that its target audience is limited to the users of fancy sports cars. Additionally, the cars manufactured by the company are exclusive and, automatically, its share could not be huge.

Decision-Making Strategy at Porsche

The decision-making strategy is not the effective one since the company has not still reached the point that would ensure its sustainable development. In the past, the company was ruled by different CEOs that approached its future in a variety of ways. Thus, now, the company definitely needs the strategy for the further developments and achievements (Henderson, 2009). At the same time, it should be stressed that Porsche has been incredibly sensitive to the expectations of the customers. In case of their disappointment with the company’s products, Porsche initiated the replacement of the appliances or other things that had made the users dissatisfied.

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Recommendations

Porsche seems to be a successful company with the strong management and leadership. It is presumed that the company will capture the new markets in the future due to its cooperation with VW. The merging with this company turned to be rather successful. Nevertheless, the recommendations for the future include the development of the new strategy providing for the extension or the drafting of the new lines of products that would make Porsche more competitive in comparison with other automobile manufacturing corporations. Apart from that, the company has to design the new ways of reaching the customers and product positioning,

The old strategies do not work in the new world where the self-accomplishment and development are treasured above all. The exclusivity that has been served as the key feature of Porsche products might no longer work. Porsche should carry the research determining the preferences and interests of its intended audience and adjust its products to the expectations of the customers. Nevertheless, in this regard, Porsche should also initiate the new trends in the already occupied area, which is the sector of the sports cars. Here, Porsche has an established reputation, and it is the territory where the company should take the lead and show the customers the products they will desire desperately.

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Conclusion

Porsche is the company that has been producing exclusive sports cars for years. It has been closely associated with the VW Company, and for many years, it has supplied VW with fancy engineering and design decisions. Nevertheless, the company operates in a highly competitive market. Its financial performance is rather stable. Nevertheless, it is presumed that the company will face new challenges in the future. Thus, it would be required to change its communication and marketing strategy. The SWOT analysis of the company has helped in suggesting the key recommendations for the, which include the establishment of the new vision and strategy as well as sticking to the current performance indicators.