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 - – cloud computing is disrupting traditional business models, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
wage bills are increasing, increasing commodity prices, 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 -
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.
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.
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.
Analytics focus
– Porsche H.c 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 Jeffrey Fear, Carin-Isabel Knoop 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.
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.
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.
High brand equity
– Porsche H.c has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Porsche H.c to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Diverse revenue streams
– Porsche H.c is present in almost all the verticals within the industry. This has provided firm in Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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.
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.
Learning organization
- Porsche H.c 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 Porsche H.c is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dr. Ing. h.c. F. Porsche AG (A): True to Brand? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Porsche H.c 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 H.c in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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 -
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.
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.
Aligning sales with marketing
– It come across in the case study Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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 Dr. Ing. h.c. F. Porsche AG (A): True to Brand? can leverage the sales team experience to cultivate customer relationships as Porsche H.c is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Dr. Ing. h.c. F. Porsche AG (A): True to Brand? HBR case study mentions - Porsche H.c 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Porsche H.c 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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Dr. Ing. h.c. F. Porsche AG (A): True to Brand? 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 H.c has relatively successful track record of launching new products.
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.
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 -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Porsche H.c in the consumer business. Now Porsche H.c can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Leveraging digital technologies
– Porsche H.c 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.
Creating value in data economy
– The success of analytics program of Porsche H.c has opened avenues for new revenue streams for the organization in the industry. This can help Porsche H.c to build a more holistic ecosystem as suggested in the Dr. Ing. h.c. F. Porsche AG (A): True to Brand? case study. Porsche H.c can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Porsche H.c 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 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.
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.
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.
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.
Manufacturing automation
– Porsche H.c can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Porsche H.c 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.
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.
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.
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 -
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Porsche H.c can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Porsche H.c business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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.
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.
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.
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 .
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.
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.
