Marius Zechner

Dominik Backs

Lili Nottrott

Pia Freitag

PorschePorsche Changes TackCase StudyMay 8th, 2013

Risk Management and Derivatives 723G33

Index

1.History / Family background2. Statistics3.Strategies4.Marketing5.Creation of competitive

advantages6.Risks7.Shareholder Wealth vs.

Stakeholder Capitalism Risk Management and Derivatives 723G33

History and Family Background

Ferdinand Porsche,Founder of the Porsche Company (1931)

Louise Piech Ferry Porsche

History and Family Background

Wolfgang Porsche,Former boardmember of Porsches directorate

Ferdinand Piech,Chairman of VW´s supervisory board Risk Management and Derivatives 723G33

Wendelin Wiedeking, former CEO of Porsche GmbH

Statistics

Risk Management and Derivatives 723G33

Statistics

Risk Management and Derivatives 723G33

Strategy 2018“We‘ve always been ambitious.And we‘ll make sure it stays that way.“

Risk Management and Derivatives 723G33

Marketing (Portfolio)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

Exclusive Sports Car Manufacturer

Risk Management and Derivatives 723G33

Marketing (Portfolio)

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 $125.000 –

$175.000- Premium product market

segment

Exclusive Sports Car Manufacturer

Risk Management and Derivatives 723G33

Marketing (Positioning)Exclusive Sports Car Manufacturer

High Price and High Quality

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Marketing (Marketing Mix)

Product : high qualityhigh performanceexclusive

Price: high priceelite status

Promotion: comsumer focused advertising (TV, direct mail)

Place: Europe (911)North America (Cayenne)

Exclusive Sports Car Manufacturer

Risk Management and Derivatives 723G33

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 driversRisk Management and Derivatives 723G33

Creation of competitive advantage

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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 20% 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

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

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 rightsstakeholder 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

Shareholder wealth vs. stakeholder Capitalism

Porsche refuses to make quarterly reports (rational strategy – less information for potential competitors)Not listed at a german stock exchangeThey 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

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

Thank you for your attention!!

We hope you all have read the case and do not have any questions!