Before analyzing all the critical issues of management of the Porsche Company, it is imperative to understand its background. Ferdinand Porsche founded the company in 1931 and began as a firm that dealt with the selling of design and engineering services to other people in the car making business. It is the best company in terms of profit making in the field of auto-making. In 2008, it made a landmark gain after it gained a majority stake in Volkswagen. The focus of the discussion will on identifying the management issues that need to be addressed, their analysis, and a proposing the best action plan that could address the identified issues.
Identification
The first critical issue that the management needs to address with regards to Porsche Company is their acquisition of Volkswagen (VW). Many people believed that the acquisition of VW by the company is a wise move, but there are still many concerns with this decision. Among the concerns is that it would serve as destruction especially at a time when Porsche is engaged in a new market that seeks to sell its luxury sedan the Panamera. There are also fears that that acquiring VW would jeopardize its culture and brand quality. Another major challenge facing the company is whether to put Porsche and VW under separate operations. Fears also exist that the acquisition of the VW will have an impact with regards to affecting the engineer’s sense of belonging.
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Another vital management issue that faces the company is on competitors and markets. It is imperative to note that Porsche is a company that deals with the outsourcing of engineering services for carmakers, and industry that has been on growth in the recent years. Therefore, this means that the company is facing a potential competition and fight for the market with companies such as Stola in Italy and Hawtal Whiting in the U.K among others. However, among the many businesses in the world, Lotus engineering is the only company that competed with Porsche in the area of outsourcing engineering businesses (Henderson & Reavis, 2009)
Evaluation
In relation to the issues identified in the case, it is essential to carry out quantitative and qualitative analysis. Some of the threats identified in the case include new entrants leading to competition, both the bargaining power of the buyers and the sellers, loss of brand and cultural identity due to its amalgamation with VW, and rivalry among the competitors. However, from a keen analysis of all these factors, it remains apparent that some elements remain pertinent and therefore are non-issues with regards to the smooth operation of the company. It is imperative to understand that the entry of new entities in the business remains low. However, the bargaining power of the business has been reported to be on a high in the recent years. On the contrary, the bargaining power of the suppliers is still considerably low. Another threat, regarding the substitution of the products and services, is significantly low hence ensuring the survivability of the business. Competition in this industry remains low as see n that the only serious contender that can challenge Porsche Lotus Engineering hence giving the company a competitive advantage.
Qualitatively, the brand and reputation of the company are one of its major strengths, and therefore it is impossible that its acquisition of VW will offer any challenges with regards to the company's identity. It has a long history of operation dating back to 1931 when it was invented thereby asserting its authority in the market. Other than having a strong brand name, it is also a giant in lean manufacturing and synchronized engineering. Its products are high quality, and this is shown by the report made by the ‘'Initial quality study'' which put it at the top between 2006 and 2008.
Recommendations
For the company to ensure that acquiring VW does not affect its brand identity and operations in general, it should first focus on technological and innovational advancement. Aqeel, (2015) asserted that this would ensure that there is an improvement of both the current and new models that the company intends to produce. The company must also utilize the presence of VW by using the wealth of resources it acquires from the company. The company should furthermore focus on developing sister companies that deal in the affordable sports cars for people in the middle to high class. Secondly, in managing competition and its authority in the market, the company must expand its market segment which will also assist it in making more profits. The focus of the company should also be directed towards inventing products that have excellent features which will emphasize on the prestige of the company and most importantly attract new customers. Employment of qualified and distinguished professionals in the field of information technology (IT) will play a critical role in advertisement and car exhibition. Finally, the company must focus on niche market segmentation which will improve their authority and market position for their varieties of sports cars.
Despite the few management issues that the company is dealing with, Porsche remains a force in the market due to its long history, strong brand name, fewer competitors, and their emphasis on brand quality. In dealing with some of their issues, they must focus on market segmentation, technological advancement, and increase their scope of operations and market.
References
Aqeel, A. B. (2015). Development of visual aspect of Porsche brand using CAD technology. Procedia Technology , 20 , 170-177.
Henderson, R., & Reavis, C. (2009). What’s Driving Porsche? Pearson.
