Case Study Description of Porsche Canada: Selling Winter Driving
Porsche Canada wants to encourage their Canadian customers to drive their cars in winter. The prize is increased sales of cars (by consumers currently unwilling to buy a Porsche only for summer driving) and winter accessories, such as snow tires. This is a three-fold challenge because Canadians generally believe that luxury vehicles should not be driven in winter due to to ice and salt; that sports cars generally performed poorly in winter conditions; and it was unwise to drive a luxury car in winter where it could be more easily scratched or damaged.
Swot Analysis of "Porsche Canada: Selling Winter Driving" written by Ken Mark, Dante Pirouz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Winter Porsche facing as an external strategic factors. Some of the topics covered in Porsche Canada: Selling Winter Driving case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Porsche Canada: Selling Winter Driving casestudy better are - – technology disruption, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, wage bills are increasing, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
increasing energy prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Porsche Canada: Selling Winter Driving
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Porsche Canada: Selling Winter Driving case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Winter Porsche, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Winter Porsche operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Porsche Canada: Selling Winter Driving can be done for the following purposes –
1. Strategic planning using facts provided in Porsche Canada: Selling Winter Driving case study
2. Improving business portfolio management of Winter Porsche
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Winter Porsche
Strengths Porsche Canada: Selling Winter Driving | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Winter Porsche in Porsche Canada: Selling Winter Driving Harvard Business Review case study are -
Successful track record of launching new products
– Winter Porsche has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Winter Porsche has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Winter Porsche is present in almost all the verticals within the industry. This has provided firm in Porsche Canada: Selling Winter Driving case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Sales & Marketing industry
– Porsche Canada: Selling Winter Driving firm has clearly differentiated products in the market place. This has enabled Winter Porsche to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Winter Porsche to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Winter Porsche has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Porsche Canada: Selling Winter Driving - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Winter Porsche in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Winter Porsche in the sector have low bargaining power. Porsche Canada: Selling Winter Driving has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Winter Porsche to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Winter Porsche digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Winter Porsche has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Winter Porsche is one of the most innovative firm in sector. Manager in Porsche Canada: Selling Winter Driving Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Winter Porsche has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Winter Porsche to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Winter Porsche has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management
– Winter Porsche is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Winter Porsche is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Winter Porsche is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Porsche Canada: Selling Winter Driving Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Porsche Canada: Selling Winter Driving | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Porsche Canada: Selling Winter Driving are -
Need for greater diversity
– Winter Porsche has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Porsche Canada: Selling Winter Driving HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Winter Porsche has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Porsche Canada: Selling Winter Driving HBR case study mentions - Winter Porsche takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Winter Porsche is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Winter Porsche needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Winter Porsche to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Winter Porsche supply chain. Even after few cautionary changes mentioned in the HBR case study - Porsche Canada: Selling Winter Driving, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Winter Porsche vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Winter Porsche has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Porsche Canada: Selling Winter Driving should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Ken Mark, Dante Pirouz suggests that, Winter Porsche is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Winter Porsche has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Porsche Canada: Selling Winter Driving, is just above the industry average. Winter Porsche needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Winter Porsche needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Winter Porsche has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Porsche Canada: Selling Winter Driving | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Porsche Canada: Selling Winter Driving are -
Manufacturing automation
– Winter Porsche can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Winter Porsche can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Winter Porsche can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Winter Porsche can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Porsche Canada: Selling Winter Driving, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Winter Porsche is facing challenges because of the dominance of functional experts in the organization. Porsche Canada: Selling Winter Driving case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Winter Porsche can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Winter Porsche can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Winter Porsche can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Loyalty marketing
– Winter Porsche has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Winter Porsche to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Winter Porsche can use these opportunities to build new business models that can help the communities that Winter Porsche operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Winter Porsche to increase its market reach. Winter Porsche will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Low interest rates
– Even though inflation is raising its head in most developed economies, Winter Porsche can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Porsche Canada: Selling Winter Driving External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Porsche Canada: Selling Winter Driving are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Winter Porsche in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Winter Porsche demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Environmental challenges
– Winter Porsche needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Winter Porsche can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Porsche Canada: Selling Winter Driving, Winter Porsche may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Winter Porsche.
Regulatory challenges
– Winter Porsche needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Stagnating economy with rate increase
– Winter Porsche can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Winter Porsche needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Winter Porsche in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Winter Porsche has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Winter Porsche needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Winter Porsche
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Winter Porsche.
Shortening product life cycle
– it is one of the major threat that Winter Porsche is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Porsche Canada: Selling Winter Driving Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Porsche Canada: Selling Winter Driving needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Porsche Canada: Selling Winter Driving is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Porsche Canada: Selling Winter Driving is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Porsche Canada: Selling Winter Driving is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Winter Porsche needs to make to build a sustainable competitive advantage.