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Marius Zechner Dominik Backs Lili Nottrott Pia Freitag

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Presentation on theme: "Marius Zechner Dominik Backs Lili Nottrott Pia Freitag"— Presentation transcript:

1 Marius Zechner Dominik Backs Lili Nottrott Pia Freitag
Porsche Porsche Changes Tack Case Study May 8th, 2013 Marius Zechner Dominik Backs Lili Nottrott Pia Freitag Risk Management and Derivatives 723G33

2 Index History / Family background Statistics Strategies Marketing
Creation of competitive advantages Risks Shareholder Wealth vs. Stakeholder Capitalism Risk Management and Derivatives 723G33

3 History and Family Background
Ferdinand Porsche, Founder of the Porsche Company (1931) Louise Piech Ferry Porsche

4 History and Family Background
Wolfgang Porsche, Former boardmember of Porsches directorate Wendelin Wiedeking, former CEO of Porsche GmbH Ferdinand Piech, Chairman of VW´s supervisory board Risk Management and Derivatives 723G33

5 Statistics Risk Management and Derivatives 723G33

6 Statistics Risk Management and Derivatives 723G33

7 Strategy 2018 “We‘ve always been ambitious.
And we‘ll make sure it stays that way.“ Risk Management and Derivatives 723G33

8 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 723G33

9 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 $ – $ Premium product market segment Risk Management and Derivatives 723G33

10 Marketing (Positioning)
Exclusive Sports Car Manufacturer High Price and High Quality Risk Management and Derivatives 723G33

11 Marketing (Marketing Mix)
Exclusive Sports Car Manufacturer Product : high quality high performance exclusive Price: high price elite status Promotion: comsumer focused advertising (TV, direct mail) Place: Europe (911) North America (Cayenne) Risk Management and Derivatives 723G33

12 Marketing (Segmentation)
Exclusive Sports Car Manufacturer Top Guns: driven, ambitious Elitists: blue blood, not price sensitive Proud Patrons: ownership is goal, trophy for hard work Bon Vivants: Jet-setters, thrill seekers, adventures Fantasists: car is escape, Everyday users: enjoy, younger drivers Risk Management and Derivatives 723G33

13 Creation of competitive advantage
Risk Management and Derivatives 723G33

14 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 % 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 Lack of social relations or good PR Risk Management and Derivatives 723G33

15 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: Porsche increases external liabilities for takeover of VW & inhouse construction of Panamera  this high liabilities in connection with the financial crisis brought down the company in the end Risk Management and Derivatives 723G33

16 Shareholder wealth vs. stakeholder capitalism
How to get capital? In general: Anglo-Saxon-Model vs. Continental-German-Bank- Model 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 723G33

17 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 shareholder‘s will  Scare off capital of investors Risk Management and Derivatives 723G33

18 sources https://www.youtube.com/watch?feature=player_embedded&v=WWRA1ABlFnw#! Risk Management and Derivatives 723G33

19 Thank you for your attention!!
We hope you all have read the case and do not have any questions!


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