Porsche: The Organisation, Management and its Marketing Strategy - Case Study Example

Research Project on Porsche – The Organisation, Management and its Marketing Strategy This research project deals with the marketing and corporate strategies of Porsche, a leading car manufacturing and selling company and the name Porsche symbolises status and power as Porsche remains one the most innovative and pioneering companies in automobile manufacture across the world. Introduction: Porsche was established in 1948 and has been marked by its approach to innovations and marketing. Porsche has the pioneer in innovative sports car designs and development and have 3000 globally valid patents. Porsche is driven by its heritage and claim that its ideas are unique and moulded by the Porsche philosophy. According to the Porsche philosophy, the company stands for emotion, fascination and innovation. The company sells and develops high quality sports cars, emphasises on keeping environmental impact at a minimum by developing environmentally low impact products and processes. Porsche manufactures products that have long term sustainability and continuous improvement of operational strategies and decisions is a high priority for the company. The company is also open in its communications and inform the public directly abut environmental impact. The Porsche guidelines emphasise on employee contribution to save the environment and the production centres regularly check on environmental issues although business partners of Porsche tend to emphasise on protection of the environment. The environmental impact of the company and its products is regularly assessed and concrete environmental aims have also been formulated by the company. Thus the focus of the Porsche philosophy seems to be the company responsibility on environmental sustainability and maintaining a positive environmental impact is its core business agenda and attribute of corporate social responsibility. As far as its marketing strategy is concerned, Porsche follows a strong policy of internationalisation and maintains an objective of balance between demand and supply. Porsche has a global presence in 100 countries and so if demand is low in one country, it is quickly compensated by demand in another. The established markets in Europe and America remain the guarantors of Porsche’s success although in some saturated markets too like Japan, Porsche seems to be doing remarkably well. Porsche has been maintaining satisfactory delivery and also has high levels of customer satisfaction and with its primary strategy on keeping a balance between demand and supply, the company has made a secured position in all major automobile markets in the world. The sales organisation of the company has high performance records and is a primary tool for the company’s success. Research Question: The focus of this research agenda is on whether Porsche’s marketing strategy and organisational objectives are in accordance with company goals and mission. If yes, how do the corporate social strategy and corporate social responsibility issues affect the distribution and sales of Porsche or its wider impact on global markets? Research Approach: The approach is research would be primarily qualitative and all research articles on Porsche’s marketing strategy and impact on the environment as well as marketing goals and objectives could be studied. The research process would involve consulting books, journals, articles, websites and if possible some primary research may also be suggested. The research process is thus about mainly gathering information available from various databases and compiling them to analyse the various aspects of marketing and management within Porsche. Some of the sources that could be consulted would be the Porsche website and annual reports, investors relations reports and shareholder information and stock values, markets data, Porsche’s own market share and distribution of its products and the corporate strategy followed by the company given in terms of its mission and objectives. The journal databases of sciencedirect, ingentaconnect, JSTOR and such others are consulted and search terms used to select articles would include Porsche, management strategy, marketing strategy, automobile industry etc. The research approach as discussed will be qualitative and all the articles selected will be thoroughly studied in terms of methodology, research questions and focus and strategies used to study the approach to marketing and management. These are the issues compared and a comparative table is drawn to show how Porsche conducts its business and how its marketing strategies over a period of time have developed and could be compared to established marketing strategies or strategies followed by other automobile manufacturing companies. If primary data is collected the organisations and individuals who could be approached would be owners or manufacturers of Porsche or even sales people and managers as well as higher corporate bosses if access to them is possible for that matter. Potential and real customers of Porsche could also be found out from Porsche sales records and questionnaires could be constructed and sent to them as well as to what kind of marketing strategies they find most effective and would motivate them to buy the car for that matter. Theory: The theoretical framework that could be considered for the project would include the theories on the marketing strategy to determine whether Porsche’s policy of a balance of demand and supply would ultimately serve its purpose to remain a stronghold in established markets and make greater impact in not so established ones. The theories of marketing and marketing strategy could also include the ones dealing with motivation as well the marketing mix and 4Ps or 7Ps of marketing and a SWOT analysis could also be done on Porsche’s market presence in various parts of the world and a worldwide marketing strategy report could be presented. The different theories of marketing could be followed and Porsche’s success story could be placed within these theories to suggest further strategies that the company can follow successfully. Zinser et al (1998) brings out the case of Porsche and suggest that successful reengineering and manufacturing would be useful for implementation and tools and also for critical success factors. The reengineering process is an important part of the Porsche’s development centre and Zinser et al (1998) discusses the structure of such projects and the experiences gained from it. Reengineering seems to be about reducing the time taken for parts procurement and after some time the success of reengineering could be stabilised. Some of the success factors identified within the marketing and project management criteria are developing an established and competent team leader, successful process control and IT implementation, and establishing decision making tools for effective marketing strategies of the company. Analysis The analysis of Porsche’s marketing strategy could be done with the help of the theoretical management tools and concepts such as Porter’s 5 forces, SWOT, 4Ps etc. In 2006-2007 Porsche, as the leading manufacturer of sporting premium cars has shown a profit of 1,450 million especially due to enhancement of the model mix which is being sold. The costs of the new models have also added to Porsche’s profits. Porsche is optimistic about the next year in business and the company intends to reach a high level of sales and emerging markets in Asia and this would be a significant contribution to the positive development of the company. The Porsche company report show that ‘the distribution of sales by regions shows how difficult the US market has become: in North America, sales were down by 19.2 per cent to 14,570 units, while in Germany Porsches sales were up slightly by 0.9 per cent to 5,540 units, in the rest of the world by an even more significant 5.0 per cent to 19,640 units’ (Porsche.com, 2007). The process of expansion of Porsche’s sales and distribution in Asia and especially in China, has increased expectations for profits within the company. The marketing analysis of the company shows that a total of 17,490 Porsche vehicles were registered in Germany, a plus of 5.6 per cent against the previous year. There were several new registrations for 911, Cayman and Carrera GT. The new models have better performance. However in this part of the project, I will focus on the marketing strategies used by Porsche and analyse Porsche’s marketing strategies on the basis of the theoretical tools in management. Porter’s 5 forces are given as rivalry, buyer power, supplier power, threat of substitutes, and barriers to entry. Any business framework or industry is modelled on the basis of supplier power or relative cost of purchases and volumes of materials supplied. In this case Porsche’s business approach is based on how many new models or units they can produce to keep up with the demands of the market and this leads to the buyer power that deals with buyer volume and information as well as brand identity and product differentiation. In case of buyer power, the number of models or units that could be sold to the consumers in Asian or European market has been increasing in recent times so both buyer and supplier power are on the rise. However rivalry could be measured with the diversity or range of products or rival companies and there may be threat of substitutes from other competitors and companies such as the Ferrari and Chrysler. Barriers to entry in any specific market could relate to cost issues, capital requirements, differences in economies or distribution problems. In case of Porsche, the company has forayed into all major Asian, American and European markets and has its presence in over 100 countries but may still need to consider certain socio political barriers while entering a new market. The 4Ps model of marketing suggests the importance of product, price, place and promotion (Gronroos, 1993). The product in this case would be the quality and brand identity of Porsche and its models, the price is that which is suitable for both the company and the consumers and Porsche’s pricing is done in a way that the brand image is also reflected in the price although it is kept at a competitive level with other cars. The place would represent the different markets in which Porsche has made its entry and the special focus would be on specific markets such as Germany, America or even Japan where many Porsche units are sold and the socio economic conditions of these markets will have to be considered for understanding the significance of place. Promotion and advertising is an important aspect of marketing and promoting Porsche as the best and most innovative sports car is a marketing strategy that has been universally used and along with Ferrari, Porsche is the most well known brand of sports car across the world. Even the 4Ps are extended to the 7Ps of marketing, then the marketing mix would be an extended on and would also include processes, provisions of customer service used by the company, and physical layout or features of the products or production units. Along with these aspects, the SWOT analysis (Dealtry, 1992) of Porsche would suggest brand name and customer loyalty as major strengths, entry into geographically and politically difficult markets would be a major weakness, opportunities would relate to more production units, profits and funds for the company and threats are competitors or rival companies that could bring down the sales and profits for Porsche. Action Plan and Activities The action plan established for this project would relate to gathering and collecting data on Porsche and articles on the marketing and management strategies used by the organisation. The SWOT, 7P and Porter’s 5 forces analysis should also be done for the analysis of marketing strategy. The Porsche website would be an important source of data for the project as will be articles on Porsche. The annual reports and market data or press releases by the company are important sources of information and the action plan could include not just gathering information but tabulating and arranging them to conduct a comparative research and possibly market research as well. Some collection of primary data along with secondary published data could also be done. The activities could be done over a period of time considering a 6 month project January – February – Research proposal and Research question March – April – Literature Review and Questionnaire construction, Methodology sorted out May – June – Data Collection and Interpretation Conclusion and recommendations on Porsche’s marketing strategy Bibliography Dealtry, T. Richard. 1992. Dynamic SWOT analysis : developer’s guide : when looking to the future look for the opportunities and threats and consider your strengths and weaknesses / T. Richard Dealtry. Birmingham (Prince’s Corner, Harborne Park Road, Harborne, Birmingham. B17 0DE) : Dynamic SWOT Associates  Grönroos, Christian (1993) From marketing mix to relationship marketing : toward a paradigm shift in marketing / Christian Grönroos. Helsingfors, Finland : Svenska handelshögskolan,  Koudal P.; Wellener P. (2003) Digital loyalty networks: continuously connecting automakers with their customers and suppliers Strategy and Leadership, Volume 31, Number 6, pp. 4-11(8) Zinser S.; Baumgrtner A.; Walliser F-S. (1998) Best practice in reengineering: a successful example of the Porsche research and development center Business Process Management Journal, Volume 4, Number 2, pp. 154-167(14) Porsche business website, accessed 2007 http://www.porsche.com/usa/ Read More