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PORSCHE

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12th August 2014

Sherina Idrish

Lecturer

School of Business

North South University

Subject: Final project report submission on Porsche

Dear Miss,

According to your guidance we have created this project on “Porsche”. Doing this report made
us all gain a lot of knowledge about Porsche and we are very sure this knowledge and the way u
taught us preparing report will help us at various stages in the near future.

We really hope this report will reach up to your expectation. Please ask us anything you feel
doubt about regarding this report.

Sincerely yours, Signature:

Mehnaz Awlad Mou-1410371030

Saif Saem Islam-1420659030

Mehdi Hassan Neil-1331100030

Ashwaria Paul Dyuti-1411086645

Fatema Islam-1230645042

Shakila Sultana Anchal-1420568303

SECTION-20

COURSE- BUS101

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 INDEX
CONTENT: PAGE NO:
Company overview 5-8
Entry strategy 9-10
Entry restriction 11-12
Political and cultural values 13-22
Motivational strategy 23-25
CSR program 25-26
Marketing mix 26-28
IMC campaign 29
Contingency strategies 30
Referencing 31

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 COMPANY OVERVIEW

Porsche makes Porsche what it is, as a brand, as a company and as an auto motive manufacturer.
It has been their guiding star for over 65 years. It covers all the values and characteristics of their
work and vehicles. The man who created the first Porsche beast was Fernand Anton Ernst or
Ferry Porsche (for short). The company was founded in Stuttgart as Dr.Ing.h.c.F.Porsche GmbH
in 1931 by Ferdinand Porsche and his son-in-law Anton Piech.

MISSION:

Porsche’s mission statement is “we are committed to provide an impeccable service to our
respective demanding clientele of premium cars”.

Porsche generously pays all possible way of attention and care to their customers in every
possible aspect a business can. In order to create connection at the workplace they share their
passion for the vision and goals. The employees are empowered to be hard working and
motivated. Lastly Porsche maintains their commitment to their CSR (corporate social
responsibility).

VISSION:

Porsche’s vision statement is “looks forward towards the future with experience and knowledge
of our past”.

Passion- Their passion and commitment is so strong that it touches their heart and mind to
develop the company future with time.

Leadership- They have the courage to make a better future and be flexible and proactive.

Innovation- They search, they imagine, they create, they delight but at the same tome honour and
protect the traditions and policies of their franchises.

MAJOR GOALS:

Porsche’s sole and for most goal is the pleasure and trust of their customer, partner and
employees. In this social environment of daily increasing challenges and dynamics, it is their

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company’s vision and will that only loyal customers may definitely have guaranteed years os
success.

SOME MAJOR GOALS:

i) To become the most successful and fascinating automakers by 2018.

ii) Porsche will help VW achieve its goal by sharing its technology with other VW
brands, increasing production and diversifying the Porsche product line.

iii) VW has seen Porsche’s recent success diversification and is looking for an even
broader offering.

SWOT ANALYSIS

STRENGTHS:
 Best quality for comparatively low price- long term reliability for high performance
cars, sedans, SU Vs, trucks, etc.
 Stuttgart plant- the best car factory in the world.
 Consistently innovating with class leading technologies.
 Strategic alliances with other automakers.
 Diversification- SUV (Cayenne), 4-door sedan (Panamera).
 Strong brand image.
 Customer loyalty- those who value innovation and independence
 Lean production practices.
 All models ( except Boxster/Cayman) are produced in Germany
 Skilled workforce.

WEAKNESSES:
 Concentrates more on exportation vs international expansion, acquisition and
licensing.
 Small compared to competitors.
 Weak financially- victim of 2008 financial crisis.
 Brand dilution.
 Conflict between the executives and management of Porsche and VW.

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OPPORTUNITIES:

 Strong economic support in home land Germany.

 Supportive manufacturing infrastructure in Germany.
 Expansion to China.
 Efficient international expansion- greater economies of scale, increases market
penetration.
 Global strategy- same models for the whole world leads to bigger international market.
 Wealth of resources upon joining the VW group.

THREATS:
 Alienation of customer base.
 Losing competitive advantage.
 CAFÉ regulation to be enforced in 2020 will cause Porsche to lose its U.S market share.

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OPERATIONAL COUNTRIES:
Porsche automobile Holding SE is shortened to Porsche. It is a German holding company with
investment in the automotive industry. Porsche Holding Salazburg is Europe’s largest
automotive retail company, operating in 21 countries throughout Europe, as well as in South
America and China.

SOME NAMES OF THE OPERATIONAL COUNTRIES ARE:

U.S.A (United States of America), Canada, Germany, Latin America, U.K (United Kingdom),
Spain, Portugal, Italy, Switzerland/Australia, France, Belgium/Netherland/Luxembourg, Russia,
Northern Europe, Middle East, Africa, Southern and Eastern Europe, China, New Zealand, Japan
and as well through Asia-Pacific.

Competitor:

Porsche's main competition is arguably from Italian specialty automaker Ferrari. Other rivals
include coupes from Lamborghini, Aston Martin, Mercedes-Benz, Maserati, and BMW. The

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Cayenne is an altogether different proposition, with competition coming from Germany's
Volkswagen Touareg and BMW X5, along with the Lexus RX and Range Rover.

ENTRY STRATEGIES

ENTRY COUNTRIES ADVANTAGES DISADVANTAGES

STRATEGIE
S

Exporting United Kingdom, 1. Increase of 1. Tough

Switzerland, USA, Canada, sales and profit competition
Japan, China, Australia, 2. Expand life 2. Extra cost
Latin America, Italy, cycle of 3. Lack of
France, Spain and Portugal, product market
Swiss and Austria, 3. Lower per unit information
Belgium/Netherlands/Luxe cost 4. Product
mbourg, Northern Europe, 4. Diversification adaptation
Southern and Eastern 5. Financial risk
Europe, Russia, Middle East
and Africa, Asia-Pacific

Licensing Japan, Canada, Mexico, 1. Opening the 1. Limited form

USA door to low of
risk participation
manufacturing 2. Potential
relationships returns from
2. Getting most marketing
out of 3. Licensees
marketing becoming
effort competitors
3. Capital not 4. Requiring
tied up in considerable
operations fact finding,
4. Options to buy planning,
into partner investigation
exist and
interpretation

Strategic USA, Australia, India, 1. Access to new 1. Upholding

Alliance Japan trust and

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 customer base honesty
2. Increased 2. Building a
brand mutually
awareness beneficial
3. Opportunity to alliance
reach new 3. Choosing the
markets right partner
4. Access to 4. Knowing
supplementary when to
services reassess the
alliance

Joint China, India, Croatia, Iran, 1. Sharing of 1. Sharing of

Venture USA, German, Canada risks with income with
partner partner
2. Opportunity to 2. Imbalance in
gain new levels of
capacity and expertise,
expertise investment or
3. Gaining new assets brought
technological into the
knowledge venture by the
4. Entering different
related partners
businesses 3. Partners don’t
5. Entering new provide
geographic enough
markets support and
6. Access to leadership
greater 4. Poor
resources integration
and co-
operation

FDI India, Canada, China, 1. Consumer 1. Entry of MNC

Mexico, Ireland benefit super market
2. Increase in 2. More
savings and investment of
investment foreign
3. Infrastructure companies
and technology 3. Large giants
transfer try to
monopolize

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 1. Getting 1. Demanding
Franchising Austria, France, Germany, profitable the highest
Italy, United Kingdom, 2. Getting level
USA, Singapore opportunity to commitment
build capital as 2. Investment is
well as not
earnings guaranteed
3. Getting help 3. Having full
from the major responsibility
banks

Entry restrictions
Tax profit report of Porsche business with Stuttgart, Germany, SUV, Bratislava, Slovakia,
Finland in 2008:

Year ending Revenue Pre-tax Production Sales

profit

31 July 2002 €4,857m €829m 55,050 54,234

31 July 2003 €5,583m €933m 73,284 66,803

31 July 2004 €6,148m €1,137m 81,531 76,827

31 July 2005 €6,574m €1,238m 90,954 88,379

31 July 2006 €7,273m €2,110m 102,602 96,794

31 July 2007 €7,368m €5,857m 101,844 97,515

31 July 2008 €7,466m €8,569m 105,162 98,652

31 July 2009 €?m €-2,559m 76,739 75,238

31 July 2010 €7.79b N/A 89,123 81,850

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31 December 2010 €9.23b €1.67b N/A 97,273

31 December 2011 €10.9b €2.05b 127,793 116,978

31 December 2012 €13.9b €2.44b 151,999 143,096

31 December 2013 €14.3b €2.78b 165,808 162,145

Problems faced in different countries:

1. Fewer than 20 percent of cars were purchased by

employers, including government agencies, in 2011,
USA
according to CNW Marketing Research.
2. Had to renew their production line as in USA there is left
hand driving system.

1. Accusing the company of alleged market manipulation

Germany during the attempt to merge with Volkswagen in 2008. The
company faces €4 billion in damages if found guilty.
2. Hedge funds and institutional investors seek 4 billion euros
($5.2 billion) from Porsche SE over its failed takeover of
Volkswagen AG (VOW).

When introducing to this market, they had to renew

Canada their production line as in Europe there is right
hand driving system.

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 Political, Cultural Values, and
Economic Condition of Three
Major Market
Three major markets of the company are USA, China and Germany.

Political System:

Country Political System

USA Socialism

China Socialism
Germany Socialism

Cultural Values:

Country Cultural Values

USA Personal control over the environment, mobility, time and its importance,
equality/ egalitarianism, individualism, independence and privacy, self-
help, competition and free enterprise.

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 China Citizens’ values and public opinions are conveyed to state leaders through
the media and other information channels, both directly and indirectly
influencing decisions on foreign policy. The traditional cultural values that
influence the psyche of the Chinese people are harmony, benevolence,
righteousness, courtesy, wisdom, honesty, loyalty, and filial piety.

Germany The German culture stems from the beliefs and values of its people.  The
role that these principles play are evident in a German's everyday life. 
Here are a few of the key values that the Germans possess-
education,manners,punctuality,proverbs & religion.

Economic Condition

USA

GDP GDP:
15684.80 billion US dollars in 2012. The GDP value of the United States
represents 25.30 percent of the world economy.

G
DP GROWTH RATE:

2.60 percent in the fourth quarter of 2013 over the previous quarter.

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Trade Balance 42300 USD Million in February of 2014.

Trade Deficit
Deficit/
Surplus
Unemployment 6.70 percent in March of 2014 from 6.70 percent in February of 2014.
Rate

Inflation Rate 1.10 percent in February of 2014

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Market On March 19th, the Federal Reserve dropped a pledge tying borrowing
Interest Rate costs to a 6.5 percent unemployment rate and made clear it would rely on a
wide range of measures in deciding when to raise interest rates. The Fed
also announced a further $10 billion reduction in its monthly bond
purchases. 

Fiscal Corporate Income Tax Rate: 40%

Personal Income Tax Rate: Increased to 39.6% in January 2014 from

35% in January 2012

Monetary Money Supply:

Activities
 Increased to 3885850 USD Million in March of 2014 from 3833340 USD

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 Million in February of 2014.

Interest Rate: Mentioned above.

China:

The Gross Domestic Product (GDP) in China was worth 9240.27 billion US dollars in 2013. The GDP value of China
represents 14.90 percent of the world economy. GDP in China averaged 1252.79 USD Billion from 1960 until 2013,
reaching an all time high of 9240.27 USD Billion in 2013 and a record low of 46.50 USD Billion in 1962. GDP in China
is reported by the World Bank Group.

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China GDP growth rate:

China GDP Growth Rate

The Gross Domestic Product (GDP) in China expanded 2 percent in the second quarter of 2014 over the previous
quarter. GDP Growth Rate in China averaged 1.97 Percent from 2010 until 2014, reaching an all time high of 2.50
Percent in the second quarter of 2011 and a record low of 1.40 Percent in the first quarter of 2012. GDP Growth Rate
in China is reported by the National Bureau of Statistics of China.

      

China unemployment rate:

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Unemployment Rate in China remained unchanged at 4.10 percent in the second quarter of 2014 from 4.10 percent
in the first quarter of 2014.

                          

China Balance of Trade

China recorded a trade surplus of 473 USD Hundred Million in July of 2014. Balance of Trade in China averaged
59.97 USD Hundred Million from 1983 until 2014, reaching an all time high of 473 USD Hundred Million in July of
2014 and a record low of -319.71 USD Hundred Million in February of 2012. Balance of Trade in China is reported by
the General Administration of Customs.

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China Inflation Rate
The inflation rate in China was recorded at 2.30 percent in July of 2014. Inflation Rate in China averaged 5.71
Percent from 1986 until 2014, reaching an all time high of 28.40 Percent in February of 1989 and a record low of
-2.20 Percent in April of 1999. Inflation Rate in China is reported by the National Bureau of Statistics of China.

Fiscal:Coporate income tax rate 25%

Germany:

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Germany GDP
The Gross Domestic Product (GDP) in Germany was worth 3634.82 billion US dollars in 2013. The GDP value of
Germany represents 5.86 percent of the world economy. GDP in Germany averaged 1733.36 USD Billion from 1970
until 2013, reaching an all time high of 3634.82 USD Billion in 2013 and a record low of 208.90 USD Billion in 1970.
GDP in Germany is reported by the World Bank Group.

Germany GDP Growth Rate

The Gross Domestic Product (GDP) in Germany expanded 0.80 percent in the first quarter of 2014 over the previous
quarter. GDP Growth Rate in Germany averaged 0.30 Percent from 1991 until 2014, reaching an all time high of 2.10
Percent in the second quarter of 2010 and a record low of -3.70 Percent in the first quarter of 2009. GDP Growth
Rate in Germany is reported by the Federal Statistical Office.

                                                

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Germany Inflation Rate
The inflation rate in Germany was recorded at 0.80 percent in July of 2014. Inflation Rate in Germany averaged 2.48
Percent from 1950 until 2014, reaching an all time high of 11.54 Percent in October of 1951 and a record low of -7.62
Percent in June of 1950. Inflation Rate in Germany is reported by the Federal Statistics Office.

Germany Interest Rate

The benchmark interest rate in Germany was last recorded at 0.15 percent. Interest Rate in Germany averaged 2.44
Percent from 1998 until 2014, reaching an all time high of 4.75 Percent in October of 2000 and a record low of 0.15
Percent in June of 2014.

Germany Unemployment Rate

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Unemployment Rate in Germany remained unchanged at 5.10 percent in June of 2014 from 5.10 percent in May of
2014. Unemployment Rate in Germany averaged 5.98 Percent from 1950 until 2014, reaching an all time high of
14.20 Percent in February of 1950 and a record low of 0.40 Percent in June of 1962. Unemployment Rate in
Germany is reported by the Federal Statistics Office.

Fiscal:Coporate income tax rate 38%

MOTIVATIONAL STRATEGY:

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Motivation is the driving force that causes the change from desire to trying to achieve in life.

Extrinsic motivational factors Porsche car company offer their employees :

1.Paid holidays and paid time off

2.Flexible work schedules

3.Proucts purchase and Lease programs

4.Volunteer community involvement programs

5.Educational reimbursement programs

6.vehicle safety training programs

7.Credit union membership

Intrinsic motivational factors:

1. Thanking employees always for a job well done

2. Commenting on how well employees are doing their job

3. Praising and appreciating employees individually or in a group setting

4. Speaking to employees about their potential growth

5. Showing gratitude

Rewards:
1. Porsche offer reward maximum time bonus money to their fulltime employees

2. Employee promotion

3. Bonus on their sells

4. Holiday and tour

5.They also offer rewards based on their employees needs .

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Hygienic factors:

1.Porsche car offer great benefits and overtime

2.Management system company policy and administration are clean ,strict and fairly organized
enough with appreciative leadership , review policy , support and others .

3.They give opportunities to learning experience

4.Porsche values every single employee and treat them equally

5.compare to other company job security is great in Porsche .

Type J:

Company ,Porsche follow “Type J” to motivate their employees.

1.They promises lifetime employment to their fulltime employees. They never fire their
employees except when a criminal offence is committed.

2. Porsche car give the opportunities to express their opinion about work

3. They offer group work

4. Employees can control system

Type Y:

1.Employees consider physical and mental effort of work as natural part of life and solve work
problems imaginatively.

2.Employees are exercise self-control in order to achieve objectives and perform better in work
environment that are no intimidating.

3.Employees are happy to work with greater responsibilities .They not only accepts but also
seek responsibility and are motivated to fulfill the goals they are given .

4. Employees are creative and creative and participative when making decisions and managers
value both result and relationships.

5.Company give priorities to develop positive work for employees.

Porsche motivation theory:

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Employees always ask themselves one question, when my boss will recognize my hard work and
give me a promotion or salary increase while the employer always says I need more productive
employees. I am paying huge salaries every month but I am not getting the best from my
employees. This article explains exactly how to motivate employees and get the best
productivity. They are using the same approach in all countries .

Porsche and Social Responsibility

Sports
Porsche focuses its activities in the world of sport on the "Porsche Tennis Grand Prix“. The Tennis
Grand Prix is one of 20 premier tournaments held worldwide on the WTA circuit. It has been held in
Stuttgart's Porsche Arena since 2006.

Culture
Porsche AG focuses its cultural involvement firstly on its premium partnership with the Gewandhaus
Orchestra in Leipzig, which was officially launched back at the end of the financial year 2011, and
secondly on a similar form of cooperation established with the Stuttgart Ballet in the financial year
2012. Both the orchestra and the ballet act as special "Porsche ambassadors" when performing on tours
around the world.

Education and Science

Porsche AG has long had a very extensive educational programme in place for children, young people
and students, aimed not only at making the STEM subjects (science, technology, engineering and
mathematics) more attractive, but also at encouraging and supporting the least affluent among them, in
the spirit of equal opportunities.
Porsche AG is also keen to cooperate much more closely with universities in the field of education and
science, with the dual aim of producing qualified new recruits for the future and gaining relevant insights
for its own product development. The many scholarships awarded by Porsche AG at over 10 selected
universities throughout Germany since 2012.

Social Involvement
Porsche has a long history of supporting social, sporting and cultural establishments and projects at its
company locations.

Porsche also operates a "Kids Driving School“ to help teach children about road safety. The aim is to
ensure that children learn from an early age to behave safely on the road and to alert them to the potential
dangers.

International Social Involvement

Porsche also intends to place a greater emphasis in future on its CSR activities in international markets.
For example, the company has begun to support the organization "Un Techo Para Mi Pais“ ("A Roof

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for my Country“) in several Latin American countries, with the aim of helping the most socially
disadvantaged to find a new permanent home and be integrated into society.

In China, Porsche has provided funding for the programme "Mobile Educational and Training
Resource Units (METRU)“ run in cooperation with UNICEF, which is aimed at ensuring that socially
disadvantaged children and young people can receive training and improve their future job prospects.

In the Philippines, the company has cooperated for many years with the Don Bosco Technical Institute,
which has led to the establishment of the first Porsche "Training and Recruitment Centre“ in Asia. Up
to 40 socially disadvantaged young people each year receive specialist training for the automotive sector
and are later employed in Porsche Centres throughout the world.

MARKETING MIX OF PORSCHE

Marketing Mix- The marketing mix is basically a business tool used in marketing by the
marketers. The marketing mix is mainly crucial when determining a product or brand’s offerand
is often associated with the four P’s : price, product, promotion and place. In marketing the four
P’s are expanded to seven or eight P’s to address the different nature of services. The 7 P’s are
down in the following diagram, and 4 P’s are explained elaborately.

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DIAGRAM:

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PLACE STRATEGY:
 They want their brand to be leveraged across a wide range of product categories.
 Porsche focused on its core competencies: Engine manufacturing, RND, body, assembly,
quality control, and highly professional distribution.
 European distribution followed by the introduction to the United States in 2003.
 Entering the SUV market, this was Porsche’s way of diversify an again model in an
oversaturated market.

PRODUCT STRATEGY:
 Porsche wanted to leverage its premium brand to enter a new market.
 An SUV would give Porsche “a new dimension in both profit and revenue”.
 This SUV would have the best of both worlds and will be a car that sports-car lovers will
love.

PROMOTION STRATEGY:
 The idea was to create an SUV that would have the image and appeal of a sports car
traditionally looked upon by Porsche enthusiasts.
 Creation of another “me too” product with accommodation to family, outdoor, and
transport activities.
 18% of the first wave of buyers owned a Porsche sports car.

PRICE STRATEGY:
 Sales of high end SUV are ranged from $43,000 and $49,000.
 According to a past on Reenlist, one Cayenne owner paid close to $69,000.

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IMC campaign of Porsche:

Category : Institutional & Product

Ad
Appeal : Rational & Emotional

TVC : https://www.youtube.com/watch?v=3IgWc4XykWw

Online:
Interactive
Youtube:
Marketing
Youtube is running a campaign for Porsche. On March 24 Porsche
launched an integrated marketing campaign with the goal of changing
consumer perceptions about its products.

Direct marketing Email marketing, post and replies to posts in social media, Analytics
software.

1. In-store and outdoor displays

2. Premiums: Alter credit financing for existing customers (when
Sales promotion
Porsche financial lease is nearing its end they want the
customers to contact them and they will take care of the rest
amount)
3. Exhibition
4. Product placement

PR event:
1964 Porsche 911 2,0 Coupe - The Car and The Publicity
PR/Publicity
Consumer/lifestyle public relations

Publicity:
2012 Paris Auto Show

PR campaign 1st year: (CSR- introduce the educational initiative and

idea of apprenticeship)

PR campaign 2nd year: (CSR- implement educational initiative)

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 Contingency Strategies:

1.Should take some effective strategies to make better advertisement.

2. Introduce the products in different auto fair or shows.

3. Taking suggestions from customers to develop the product through website or social media.

4. Launch more contests on social media site.

5. Let the car catch customer wherever they are and start a dialogue.

6. Make the car go around different streets, shopping malls, corporate offices etc.

7. Company should renew the product line according to different countries context as in Europe there is
right hand driving system.

8. Provide new technology that people need to manage their everyday life.

9. Beside sports car they should concentrate on new product line for everyday use car.

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 References:

A.http://en.wikipedia.org/wiki/Porsche

B.http://downtown.porschedealer.com/specials/

C.https://www.youtube.com/watch?v=Lwfv54f-4MU

D.http://www.dmnews.com/porsche-launches-integrated-campaign-to-shift-consumer-
perception/article/199269/
E.http://www.porsche.com/
http://www.porsche.com/usa/aboutporsche/responsibility/socialcommitment/

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