Porsche Automobile Holding SE (POAHY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Porsche Automobile Holding SE (United States)
Based on various researches at Oak Spring University , Porsche Automobile Holding SE is operating in a macro-environment that has been destablized by – there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing energy prices, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Porsche Automobile Holding SE
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Porsche Automobile Holding SE can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Porsche Automobile Holding SE, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Porsche Automobile Holding SE 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 Automobile Holding SE can be done for the following purposes –
1. Strategic planning of Porsche Automobile Holding SE
2. Improving business portfolio management of Porsche Automobile Holding SE
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Porsche Automobile Holding SE
Strengths of Porsche Automobile Holding SE | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Porsche Automobile Holding SE are -
Diverse revenue streams
– Porsche Automobile Holding SE is present in almost all the verticals within the industry. This has provided Porsche Automobile Holding SE 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.
Low bargaining power of suppliers
– Suppliers of Porsche Automobile Holding SE in the sector have low bargaining power. Porsche Automobile Holding SE has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Porsche Automobile Holding SE to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Porsche Automobile Holding SE is one of the leading players in the industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Porsche Automobile Holding SE 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 Automobile Holding SE is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Porsche Automobile Holding SE emphasize – knowledge, initiative, and innovation.
Training and development
– Porsche Automobile Holding SE has one of the best training and development program in industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Porsche Automobile Holding SE 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.
Sustainable margins compare to other players in industry
– Porsche Automobile Holding SE has clearly differentiated products in the market place. This has enabled Porsche Automobile Holding SE to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Porsche Automobile Holding SE to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Porsche Automobile Holding SE has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Porsche Automobile Holding SE 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.
Analytics focus
– Porsche Automobile Holding SE 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 of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Porsche Automobile Holding SE in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Porsche Automobile Holding SE digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Porsche Automobile Holding SE 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.
Effective Research and Development (R&D)
– Porsche Automobile Holding SE has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Porsche Automobile Holding SE staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Porsche Automobile Holding SE | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Porsche Automobile Holding SE are -
Slow to strategic competitive environment developments
– As Porsche Automobile Holding SE is one of the leading players in the industry, it 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.
Employees’ less understanding of Porsche Automobile Holding SE strategy
– From the outside it seems that the employees of Porsche Automobile Holding SE 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.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Porsche Automobile Holding SE 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.
Products dominated business model
– Even though Porsche Automobile Holding SE has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Porsche Automobile Holding SE should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Porsche Automobile Holding SE is just above the industry average. It 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 industry, Porsche Automobile Holding SE 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.
Aligning sales with marketing
– From the outside it seems that Porsche Automobile Holding SE 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 at Porsche Automobile Holding SE can leverage the sales team experience to cultivate customer relationships as Porsche Automobile Holding SE is planning to shift buying processes online.
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 Porsche Automobile Holding SE supply chain. Even after few cautionary changes, Porsche Automobile Holding SE is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Porsche Automobile Holding SE vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Porsche Automobile Holding SE is dominated by functional specialists. It is not different from other players in the industry, but Porsche Automobile Holding SE needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Porsche Automobile Holding SE to focus more on services in the industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Porsche Automobile Holding SE 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Porsche Automobile Holding SE is slow explore the new channels of communication. These new channels of communication can help Porsche Automobile Holding SE to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Porsche Automobile Holding SE Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Porsche Automobile Holding SE 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 Automobile Holding SE can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Porsche Automobile Holding SE in the industry. Now Porsche Automobile Holding SE can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Porsche Automobile Holding SE 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 Automobile Holding SE 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Porsche Automobile Holding SE 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 Automobile Holding SE to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Porsche Automobile Holding SE 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.
Developing new processes and practices
– Porsche Automobile Holding SE can develop new processes and procedures in 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 industry, but it has also influenced the consumer preferences. Porsche Automobile Holding SE 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 Automobile Holding SE can use these opportunities to build new business models that can help the communities that Porsche Automobile Holding SE operates in. Secondly it can use opportunities from government spending in sector.
Buying journey improvements
– Porsche Automobile Holding SE can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. It 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 Automobile Holding SE is facing challenges because of the dominance of functional experts in the organization. Porsche Automobile Holding SE can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Porsche Automobile Holding SE 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 Porsche Automobile Holding SE to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Porsche Automobile Holding SE in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Porsche Automobile Holding SE has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Porsche Automobile Holding SE to build a competitive advantage using analytics. The analytics driven competitive advantage can help Porsche Automobile Holding SE to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Porsche Automobile Holding SE External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Porsche Automobile Holding SE are -
Stagnating economy with rate increase
– Porsche Automobile Holding SE 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 industry.
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 Automobile Holding SE business can come under increasing regulations regarding data privacy, data security, etc.
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 Porsche Automobile Holding SE in the sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Porsche Automobile Holding SE may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
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.
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 Automobile Holding SE.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Porsche Automobile Holding SE 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 Porsche Automobile Holding SE prominent markets.
Consumer confidence and its impact on Porsche Automobile Holding SE 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 industry and other sectors.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Porsche Automobile Holding SE can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Porsche Automobile Holding SE 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 Automobile Holding SE can take advantage of this fund but it will also bring new competitors in the industry.
Increasing wage structure of Porsche Automobile Holding SE
– 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 Automobile Holding SE.
Shortening product life cycle
– it is one of the major threat that Porsche Automobile Holding SE is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Porsche Automobile Holding SE with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Porsche Automobile Holding SE Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Porsche Automobile Holding SE 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 Porsche Automobile Holding SE 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 Porsche Automobile Holding SE 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 Automobile Holding SE 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 Automobile Holding SE needs to make to build a sustainable competitive advantage.