Porsche Case Study: Strategic Management in a Global Context

Porsche, a truly magnificent sports car. After understanding the situation from the case study, the author understands the history as well as the progression of this branded car. According to the case study, Porsche won many competition and was truly a well-made car with many trophies to its brand. Unfortunately, due to the financial crisis in 2008, Porsche finally gave in and was taken over by VW Auto Group in 2010 (Boatcallie, Brandon et al., 2013).

In 2007, oil prices were on a record high which makes it hard for potential competitors to enter the market. Also, to tackle this problem, Porsche made many fuel-efficient motorcars that can potentially reduce the amount of fuel intake and to maximise the distance the car can run. In this industry, according to the case, it is evidently expensive to run a sports vehicle company as many companies experience tight cash flows which makes it hard for new competitors to emerge. As building and making a car requires specialised skills, it is hard for new entrants to acquire this skills easily.With complex and unique technology as well as high investments to design and build a supercar, there are very few alternatives brands that can substitute Porsche. There are only a handful of brands that are capable of that. This can evidently be seen from the case study: “Porsche competes in a market segment where relatively few can compete. Manufacturing a car of any calibre – no less the calibre of Porsche – Requires sizeable capital investments. Additionally, the engineering expertise required to design a car capable of competing with Lamborghini, Ferrari, Aston Martin, Porsche and others keeps all but the truly intent from entering the field.”

According to the case study, supercars are evidently hard to maintain as it requires a high fee of maintenance with a high frequency of maintenance needed. This will greatly reduce buying power. Due to the fact that Porsche uses its own technology and manufactures its own vehicle, they only...