Strategic analysis of Porsche AG - Research Paper Example

analysis of the firm is provided aiming to indicate the policies that should be adopted by the firm in order to increase its competitiveness within its industry. Porsche is one of the key competitors in the automotive industry worldwide; the competition in the specific industry is extremely strong; however, the recession seems to have influenced the performance of the sector’s firms; in accordance with a relevant report certain firms, like Honda and Mazda, have standardized their profits, while others, like Chrysler and Toyota face severe financing or operational problems (BNET News, 2010).

The firms that operate in this industry are likely to face five different ‘forces’- as indicating in the Porter’s five forces model in Figure 1- Appendix; these forces are: a) the customers – their preferences on expensive and advanced-technology cars are likely to continuously increased, b) the suppliers – certain materials required for the production of the firm’s products are unique, a fact increasing the power of the firm’s suppliers to bargain for increased prices, c) substitute products – cars with similar characteristics with those of the specific firm continuously appear in the market; the difference in their quality is the only element for ensuring the superiority of the firm towards its rivals, d) threat of new entrants; periodically, new firms enter the automotive industry, a fact that could threaten the firm under the terms that these firms’ products could reach the level of quality of the firm’s automobiles and e) the competition, which is likely to be continuously increased as each firm fights to standardize its performance securing its position in the automotive industry.

At the next level, the survival of firms in the specific industry is depended on the following factors: a) the demands and the preferences of customers (in terms of quality of products but also of the time required for processing the customers’ orders/ availability of