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
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5. Statistics
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6. Statistics
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7. Strategy 2018 “We‘ve always been ambitious.
And we‘ll make sure it stays that way.“
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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
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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
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13. Creation of competitive advantage
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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
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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
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18. sources
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19. Thank you for your attention!!
We hope you all have read the case and do not have any questions!