Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911
The Porsche 911 has long been the face of the company's product line. Over the years, Porsche has added models priced either above or below the 911, but only the lower-priced models have sold well. Porsche seems to struggle between what an executive calls the "pull of the market" and the "tug of brand equity." This case provides an opportunity for students to analyze the optimal breadth of a product line that will balance sales, profitability, dealer satisfaction, and long-term brand health and customer satisfaction.
Authors :: Paul W. Farris, Eric Kang, Jordan Mitchell
Swot Analysis of "Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911" written by Paul W. Farris, Eric Kang, Jordan Mitchell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Porsche 911 facing as an external strategic factors. Some of the topics covered in Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, wage bills are increasing, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Porsche 911, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Porsche 911 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 Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 can be done for the following purposes –
1. Strategic planning using facts provided in Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 case study
2. Improving business portfolio management of Porsche 911
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 Porsche 911
Strengths Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Porsche 911 in Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Porsche 911 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Porsche 911
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Porsche 911 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Porsche 911 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Porsche 911 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Porsche 911 is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Paul W. Farris, Eric Kang, Jordan Mitchell can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Porsche 911 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Porsche 911 are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Porsche 911 is one of the leading recruiters in the industry. Managers in the Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Porsche 911 in the sector have low bargaining power. Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Porsche 911 to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Porsche 911 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Porsche 911 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.
High switching costs
– The high switching costs that Porsche 911 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.
Ability to lead change in Sales & Marketing field
– Porsche 911 is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Porsche 911 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 are -
Aligning sales with marketing
– It come across in the case study Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 can leverage the sales team experience to cultivate customer relationships as Porsche 911 is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911, it seems that the employees of Porsche 911 don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring
– The stress on hiring functional specialists at Porsche 911 has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Porsche 911 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.
Low market penetration in new markets
– Outside its home market of Porsche 911, firm in the HBR case study Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Porsche 911 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Porsche 911 's lucrative customers.
Lack of clear differentiation of Porsche 911 products
– To increase the profitability and margins on the products, Porsche 911 needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 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 Porsche 911 has relatively successful track record of launching new products.
Products dominated business model
– Even though Porsche 911 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 - Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Porsche 911 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.
Opportunities Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 | 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 Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 are -
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. Porsche 911 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Porsche 911 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, Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Porsche 911 has opened avenues for new revenue streams for the organization in the industry. This can help Porsche 911 to build a more holistic ecosystem as suggested in the Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 case study. Porsche 911 can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Porsche 911 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Porsche 911 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Porsche 911 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.
Leveraging digital technologies
– Porsche 911 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Porsche 911 is facing challenges because of the dominance of functional experts in the organization. Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Porsche 911 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Porsche 911 to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Porsche 911 to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Porsche 911 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Porsche 911 can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Porsche 911 can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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. Porsche 911 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 are -
Increasing wage structure of Porsche 911
– 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 Porsche 911.
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. Porsche 911 needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Porsche 911 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.
Regulatory challenges
– Porsche 911 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
– Porsche 911 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911, Porsche 911 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 .
Technology acceleration in Forth Industrial Revolution
– Porsche 911 has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Porsche 911 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.
Shortening product life cycle
– it is one of the major threat that Porsche 911 is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Porsche 911 can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Porsche 911 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Porsche 911 high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
Weighted SWOT Analysis of Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 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 Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 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 Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 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 Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 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 Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911 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 Porsche 911 needs to make to build a sustainable competitive advantage.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Product-Line Strategy at Porsche: The Effect of New Models on the Porsche Brand and the 911
