Dr. Ing. h.c. F. Porsche AG (A): True to Brand? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Dr. Ing. h.c. F. Porsche AG (A): True to Brand?
Examines one of the most important entrepreneurial decisions made in the history of Porsche, made in early 1998: to build a sport utility vehicle (SUV)--the Cayenne. After decades of relying on one or two sports car models and nearly going bankrupt and losing its independence in 1993, Porsche had to diversify its product lines. Also examines the branding implications of the internationalization of production.
Swot Analysis of "Dr. Ing. h.c. F. Porsche AG (A): True to Brand?" written by Jeffrey Fear, Carin-Isabel Knoop includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Porsche H.c facing as an external strategic factors. Some of the topics covered in Dr. Ing. h.c. F. Porsche AG (A): True to Brand? case study are - Strategic Management Strategies, Corporate governance, Entrepreneurship, Financial management, Globalization, Leadership, Manufacturing, Risk management, Sales, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Dr. Ing. h.c. F. Porsche AG (A): True to Brand? casestudy better are - – challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, there is backlash against globalization, increasing government debt because of Covid-19 spendings,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Dr. Ing. h.c. F. Porsche AG (A): True to Brand?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dr. Ing. h.c. F. Porsche AG (A): True to Brand? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Porsche H.c, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Porsche H.c 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand? can be done for the following purposes –
1. Strategic planning using facts provided in Dr. Ing. h.c. F. Porsche AG (A): True to Brand? case study
2. Improving business portfolio management of Porsche H.c
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Porsche H.c
Strengths Dr. Ing. h.c. F. Porsche AG (A): True to Brand? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Porsche H.c in Dr. Ing. h.c. F. Porsche AG (A): True to Brand? Harvard Business Review case study are -
Organizational Resilience of Porsche H.c
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Porsche H.c does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Porsche H.c is one of the most innovative firm in sector. Manager in Dr. Ing. h.c. F. Porsche AG (A): True to Brand? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Porsche H.c is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– Dr. Ing. h.c. F. Porsche AG (A): True to Brand? firm has clearly differentiated products in the market place. This has enabled Porsche H.c to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Porsche H.c to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Porsche H.c is one of the leading recruiters in the industry. Managers in the Dr. Ing. h.c. F. Porsche AG (A): True to Brand? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Porsche H.c 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.
Low bargaining power of suppliers
– Suppliers of Porsche H.c in the sector have low bargaining power. Dr. Ing. h.c. F. Porsche AG (A): True to Brand? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Porsche H.c to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Porsche H.c digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Porsche H.c 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.
Superior customer experience
– The customer experience strategy of Porsche H.c in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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.
Successful track record of launching new products
– Porsche H.c has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Porsche H.c 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.
Highly skilled collaborators
– Porsche H.c 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Dr. Ing. h.c. F. Porsche AG (A): True to Brand? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dr. Ing. h.c. F. Porsche AG (A): True to Brand? are -
Increasing silos among functional specialists
– The organizational structure of Porsche H.c is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Porsche H.c needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Porsche H.c to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Porsche H.c products
– To increase the profitability and margins on the products, Porsche H.c needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Porsche H.c is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Dr. Ing. h.c. F. Porsche AG (A): True to Brand? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Porsche H.c 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand?, is just above the industry average. Porsche H.c 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.
Capital Spending Reduction
– Even during the low interest decade, Porsche H.c 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.
Need for greater diversity
– Porsche H.c 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 operating costs
– Compare to the competitors, firm in the HBR case study Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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 H.c 's lucrative customers.
Interest costs
– Compare to the competition, Porsche H.c has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Dr. Ing. h.c. F. Porsche AG (A): True to Brand?, it seems that the employees of Porsche H.c 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.
Products dominated business model
– Even though Porsche H.c 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 - Dr. Ing. h.c. F. Porsche AG (A): True to Brand? should strive to include more intangible value offerings along with its core products and services.
Opportunities Dr. Ing. h.c. F. Porsche AG (A): True to Brand? | 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand? are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Porsche H.c can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Porsche H.c has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Dr. Ing. h.c. F. Porsche AG (A): True to Brand? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Porsche H.c to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Porsche H.c 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 H.c 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.
Learning at scale
– Online learning technologies has now opened space for Porsche H.c to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Porsche H.c can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Porsche H.c can use these opportunities to build new business models that can help the communities that Porsche H.c operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 H.c can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 H.c 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Porsche H.c 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, Dr. Ing. h.c. F. Porsche AG (A): True to Brand?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Porsche H.c to increase its market reach. Porsche H.c 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.
Buying journey improvements
– Porsche H.c can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dr. Ing. h.c. F. Porsche AG (A): True to Brand? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Porsche H.c is facing challenges because of the dominance of functional experts in the organization. Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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.
Building a culture of innovation
– managers at Porsche H.c 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 Strategy & Execution segment.
Threats Dr. Ing. h.c. F. Porsche AG (A): True to Brand? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dr. Ing. h.c. F. Porsche AG (A): True to Brand? are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Porsche H.c with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 H.c needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Porsche H.c has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Porsche H.c needs to keep up with the evolution of technology in the Strategy & Execution 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Porsche H.c will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Porsche H.c 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. Porsche H.c can take advantage of this fund but it will also bring new competitors in the Strategy & Execution 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand?, Porsche H.c may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
High dependence on third party suppliers
– Porsche H.c 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Porsche H.c 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand? .
Increasing wage structure of Porsche H.c
– 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 H.c.
Stagnating economy with rate increase
– Porsche H.c 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.
Consumer confidence and its impact on Porsche H.c 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.
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 Porsche H.c.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Porsche H.c in the Strategy & Execution industry. The Strategy & Execution 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.
Weighted SWOT Analysis of Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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 H.c needs to make to build a sustainable competitive advantage.