Is Porsche Killing the Golden Goose? One day a farmer going to the nest of his g

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Is Porsche Killing the Golden Goose? One day a farmer going to the nest of his goose found there an egg all yellow and glintering. He took it and found that the egg was pure gold. The farmer could hardly believhis luck! Every morning the same thing occurred, and the farmer grew richer, day by day. Thinking he could get all the gold at once, he killed the goose. After he opened i Aesop's Fable WHEN PORSCHE REVEALED its 911 sports car design innew model line Panamera, a premium-category four- 1962,' it caused a worldwide sensation. Ever since scat sports sedan, to extend its customer base. The line Porsche has been one of the world's finest performance as launched on time in 2009 and like Cayenne, it car manufacturers. The Porsche 911 is a legendary outsold the 911 in the subsequent years. As of 2012, sports car icon. Although focusing on a niche market Cayenne and Panamera together accounted for 73 per- with a small output every year, Porsche was extremelycent of Porsche's total sales volumes. profitable. Even today, it still enjoys the largest profit margins among all major auto manufacturers, thanks tos in 2008-2009, Porsche was attempting a hostile the hefty premium it can command for its cars. the years leading up to the global financial cri- takeover of the much larger Volkswagen (VW). Part More than 50 years after its birth, the 911 remains of the competition was motivated by a bitter family the heart and soul of Porsche. However, it is no longer feud resulting from estranged members of the Porsche the company's best-selling model. The number-onefamily holding leading executive positions in both spot has bcen taken by the Cayenne, a five-scat sports companies. As the global financial crisis took hold, utility vehicle (SUV) launched by Porsche in 2002. Porsche collapsed under a heavy debt burden caused Porsche views the Cayenne as a way to reduce the by the hostile VW takeover attempt. VW turned the company's dependence on the traditional sports mod tables and took over Porsche in 2012. Now Porsche is els and to provide for future growth in sales and prof cearly gunning for economies of scale as it ramps up ts. The Cayenne may be the most successful modeunit sales, and VW overall is aiming to overtake GM launch of Porsche since the 911: Porsche sold theand Toyota as the word leader in unit sales. 200,000h Cayenne unit only six years after its debut at the Paris Motor Show. In 2012, the Cayenne's world- ? "Strategy 2018," as part of Volkswagen group's grand wide sales reached a record 77,822 units, accountingvision: Porsche plans to increase unit sales to 200,000 for more than half of the company's overall sales vol per year by 2018, up from 30,000 units in 2002. To ume (see Exhibit MC13.1). The popularity of Caychieve this goal, Porsche needs to inspire more buy- enne is seen across regions, especially in the U.S. and ers. It continues to push overseas sales of the Cayenne China, the two largest markets of Porsche overall (see and the Panamera models, setting up more dealerships Exhibit MC13.2). In fact, China has become the larg here growth is the strongest. To address potential est market for Cayenne, and the model will continue tocstomers concern over the 91l's drivability as an be the strategic sales focus of Porsche in that country. everyday vehicle, Porsche launched an advertising Porsche developed its own growth blueprint, termed The Cayenne has made Porsche more appealing to people who are not sports-car drivers but are happy own the sportiest SUV on the market. While the model expansion may upset the purists, Porsche did not stop there. In 2005, Porsche announced its plan to build aYng2014 Frank T. Rothacrmel and Carrie Yang (GT MBA, MS) prepared this Mini- Case from public sources. It is developed for the purpose of class discussion It is tae intended to be used for asy kind of endaeetica, sorce of data, oe depiction of eicie or inefciers monagement. All epinions expeessed, and all erroes and onissios, are entirely the asthoes. O Rethaemel and s 434

Explanation / Answer

1.

Porsche means that the ultimate sports car, it is synonymous with sports and luxury. Its iconic looks and awe-inspiring experience was unique and this perception was the driver of its sale.

So, the competitive advantage is the perception of sports luxury along with premium performance in terms of experience.

2.

The brand expansion was on the lines of sport utility and actually helped people to get a sporty feeling driving the SUVs and similar cards.

So more and more people could relate to the sports concept and still drive thier type of car, and the design and experience was similar and conformed the perception. So, overall it was good but extending the brand too much is never a good thing, which might happen if all new cars which do not fall on the same perception are rolled out as the same brand, it might dilute the brand and hurt the company in long term.

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