Porsche Marius Zechner Dominik Backs Lili Nottrott Pia Freitag Porsche Changes Tack Case Study May 8th, 2013 Risk Management and Derivatives 723G33
Index History / Family background Statistics Strategies Marketing Creationofcompetitiveadvantages Risks Shareholder Wealth vs. StakeholderCapitalism Risk Management and Derivatives 723G33
Historyand Family Background Ferdinand Porsche, Founderofthe Porsche Company (1931) Louise Piech Ferry Porsche
Historyand Family Background Wolfgang Porsche, Former boardmemberof Porsches directorate Wendelin Wiedeking, former CEO of Porsche GmbH Ferdinand Piech, Chairman ofVW´ssupervisoryboard Risk Management and Derivatives 723G33
Statistics Risk Management and Derivatives 723G33
Statistics Risk Management and Derivatives 723G33
Strategy 2018 “We‘vealwaysbeenambitious. Andwe‘llmakesureitstaysthatway.“ Risk Management and Derivatives 723G33
Marketing (Portfolio) Exclusive Sports Car Manufacturer • 911 • Presentingthebrand • Growingold; replacementneeded • Salespeak in 2001/02; 15% decrease after • Prices high; highestmargin • Not priceelastic • Boxster • Introduced in 1996 • Enteringlowpricemarket • Less sensitive forbusinesscycle • Salespeaked in 2000/01 • hadtocompetewith BMW Risk Management and Derivatives 723G33
Marketing (Portfolio) Exclusive Sports Car Manufacturer • Cayenne • Enteringsportsutilityvehicle (SUV) • Very quick success • Criticism; Comparableto VW Touareg • Panamera • Premium class, fourdoor, four-seatscoupsportscar • Price between $125.000 – $175.000 • Premium productmarketsegment Risk Management and Derivatives 723G33
Marketing (Positioning) Exclusive Sports Car Manufacturer High Price and High Quality Risk Management and Derivatives 723G33
Marketing (Marketing Mix) Exclusive Sports Car Manufacturer Product : high quality high performance exclusive Price: high price elitestatus Promotion: comsumerfocusedadvertising (TV, directmail) Place: Europe (911) North America (Cayenne) Risk Management and Derivatives 723G33
Marketing (Segmentation) Exclusive Sports Car Manufacturer Top Guns: driven, ambitious Elitists: blueblood, not price sensitive Proud Patrons: ownershipisgoal, trophyforhardwork Bon Vivants: Jet-setters, thrillseekers, adventures Fantasists: carisescape, Everydayusers: enjoy, youngerdrivers Risk Management and Derivatives 723G33
Creationofcompetitiveadvantage Risk Management and Derivatives 723G33
Risks Currency: - Productionbase in Euro-area, thereforeriskonlyatsales - demandfocuses on global markets FOREX trading(exchangeratesvariations) againstrisktheyapplyhedging(derivatives, forwards, futures) Political uncertainty: affectsany MNE, politicaldecisionscandestroycorporatestrategy. EU isrelativelyfreeofpoliticaluncertainty. However: - Lex VW (lawof VW), thatno shareholder mayhavemorethan 20% ofvotingrights, despitethenumberofshares - 2009, countryofLowerSaxonypubliclyopposedthetakeoverof Porsche - Friendlyjointventure was soonconsideredashostiletakeoverby Porsche management Lack ofsocialrelationsorgood PR Risk Management and Derivatives 723G33
Risks Outsourcing:decayofqualityofmanufacturedproductsandcontrol in general lack ofknowledgeandindustry countrybecomeslessdesirableforinvestors Porsche fightsagainstthisriskbyinvesting in human capital (theirbiggestasset) Credit: Porsche increasesexternalliabilitiesfortakeoverof VW & inhouseconstructionof Panamera this high liabilities in connectionwiththefinancialcrisisbrought down thecompany in the end Risk Management and Derivatives 723G33
Shareholder wealth vs. stakeholdercapitalism Howtogetcapital? In general: Anglo-Saxon-Model vs. Continental-German-Bank- Model Porsche: - preferencesharesandordinaryshares different votingrights stakeholderorientated(stakeholders = family) - dividend was not issuedtoshareholders cashflowof high profitable carsector was usedtotakeover VW Risk Management and Derivatives 723G33
Shareholder wealth vs. stakeholderCapitalism • Porsche refusestomakequarterlyreports (rational strategy – lessinformationfor potential competitors) • Not listedat a german stock exchange • Theygaincapitalfrom outside at London Stock Exchange • Riskofscaringshareholders, becausemanagementignoresshareholder‘s will • Scare off capitalofinvestors Risk Management and Derivatives 723G33
sources http://www.porsche.com/middle-east/_ghana_/aboutporsche/overview/strategy2018/ http://www.iei.liu.se/fek/frist/723G33/yinghong-files/1.460514/Porsche_Changes_Tack.pdf http://www.porsche.com/ https://www.youtube.com/watch?feature=player_embedded&v=WWRA1ABlFnw#! Risk Management and Derivatives 723G33
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