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Summary
1 | INTRODUCTION .......................................................................................................... 2
2 | PRESENTATION OF THE
GROUP...................................................................................... 2
The companys history ..................................................................................................... 2
Present situation | Porsche in numbers.............................................................................. 3
3 | THE MACRO-ENVIRONMENTAL FACTORS (PESTEL
ANALYSIS) ............................................... 4
4 | ANALYSIS OF THE
INDUSTRY......................................................................................... 5
Porters 5(+1) Forces....................................................................................................... 5
Market segmentation....................................................................................................... 7
5 | STRATEGIC ANALYSIS OF
PORSCHE ................................................................................ 7
6 | SWOT ......................................................................................................................10
7 | POSSIBLE STRATEGIC REASONS FOR PORSCHES INVOLVEMENT IN
VW.................................10
8 | CONCLUSION ............................................................................................................12
Porsche mastering VW ....................................................................................................12
9 | BIBLIOGRAPHY .........................................................................................................13
Books & Annual Reports.................................................................................................13
Websites.......................................................................................................................13
1 | Introduction
Strong growth, solid benefit: For years Porsche has been driving on the fast track. While
Opel,
Ford, VW and Mercedes need to cut jobs, the Swabians have the opportunity to create new
jobs.
What is Porsche CEO Wendelin Wiedeking doing differently? How does Wiedeking
realize his
strategy? And why should a small and highly profitable maker of sports cars suddenly
invest its
fortunes to a struggling mass-producer? That was the question that alarmed shareholders
asked
on September 25th, 2005 when Porsche announced plans to buy a 20 % stake in
Volkswagen,
Europes biggest carmaker. Today in January 2007, Porsche holds 27.4 % of VW stocks
(wants an
increase to 29.9 %) and is the biggest VW shareholder.
2 | Presentation of the Group
The companys history
The Dr. Ing. h.c. F. Porsche AG is a German manufacturer of sports cars in the luxury
segment
with his domicile in Stuttgart - Zuffenhausen, Germany. Porsche was founded as an
engineering
office in 1931. Ferdinand Porsche gathered experience in the development of military
vehicles
during the First World War and worked for a number of companies as a constructing
engineer
(e. g. management board member and supervisor in the engineering office of the
Daimler-Motor-
Association).
On December 1st, 1930 he opened his first engineering office, which transformed into
Dr. Ing. h.c. F. Porsche GmbH, engineering and consultancy for engines and vehicle
constructions on April 25th, 1931. There his greatest successes were the construction of
racing
cars for Auto Union and his major impact on the construction of Volkswagen.
In 1937 the legal form of organization changed into private limited partnership (German:
KG).
Between 1944 and 1950 the company evacuated the fabrication to Austria, where Ferry
Porsche
constructed the first Porsche named the 356 Nr. 1 Roadster. Ferdinand Porsches son, Ferry
Porsche, took over his fathers chairmanship in 1947, while Ferdinand was in French
imprisonment. Ferry inherited half of the shares and built up the sports car company under
the
trademark known today.
The daughter of Ferdinand Porsche, Louise Pi*ch, inherited the other half of the shares.
Her husband, Anton Pi*ch, was factory manager and director of the Volkswagen GmbH in
Wolfsburg, Germany during the Nazi regime.
Over time, the personal interaction of the family members and their management functions
led
to controversy and family conflicts. Therefore in 1972, Ferry Porsche and Louise Pi*ch
decided
for future generations that no family members were allowed to participate in the
management
any more. The Dr. Ing. h.c. F. Porsche KG was transformed into a corporation
(German: Aktiengesellschaft AG).
One of the founders grandsons, the young engineer Ferdinand Pi*ch, was forced to quit his
service for the development of Porsche and needed to found his own construction office.
Shortly after, he preceded his professional career at Audi and Volkswagen where he
became
chairman of the supervisory board.
Present situation | Porsche in numbers
The equity capital of 45,5 million Euros is divided into two halves: 8.750.000 ordinaries *
held in
equal parts by the members of the families Porsche and Pi*ch * and 8.750.000 preference
shares
listed on the stock exchange.
In autumn 2005 Porsche became the biggest shareholder of Volkswagen with a 25.1 %
stake.
On January 26th, 2007 Porsche will ask for the increase of the shares from the recent 27.4
% to
29.9 % at the annual shareholders meeting. The acquisition costs of over 4 billion Euros
were
financed from Porsches company assets.
The German federal state Lower Saxony is now only the second biggest shareholder.
Mr. Wiedeking denies rumors about an acquisition of VW. His company is satisfied with
its
29 percent, does not believe in the sense of a total acquisition and also wants to stay
independent, he explained to the Wall Street Journal during the Detroit Motor Show in Jan.
07 1.
The reason for the percentage barrier is, that as soon as Porsche would own 30 % they
would be
forced to launch a takeover bid to the other shareholders of VW.
20,8%
29,9%
49,3%
Percentage of shares in Volkswagen 2007
Porsche 29.9 % | Lower Saxony 20.8 % | Others 49.3 %
1 Dow Jones Newswires, Finance, 10.01.2007
For a few years now, Porsche is the most profitable fabricant of automobiles in the world
and at
the same time one of the greatest taxpayers of Stuttgart. Porsches profitability (Margin
2005)
can be seen in the chart below, the comparison is made on the European automobile
market.
Company Name Country
Margin
2005
Sales
2005
Profit
2005
Margin
2004
Sales
2004
Profit
2004
Market
Capitalization
2006
Porsche D 11,9% 6.574 783 9,7% 6.359 616 6.583
Renault F 8,1% 41.338 3.367 8,7% 40.715 3.551 25.559
Ford TK 6,6% 3.801 250 8,1% 3.033 247 2.207
BMW D 4,8% 46.656 2.239 5,0% 44.335 2.222 24.188
Audi D 3,1% 26.591 824 3,5% 24.506 868 5.394
Fiat I 2,9% 46.544 1.331 -3,4% 46.488 -1.586 11.469
Avtovaz RUS 2,6% 4.261 113 2,6% 4.261 113 953
Daimler-Chrysler D 1,9% 149.776 2.846 1,7% 142.059 2.466 41.425
Peugeot Citro*n F 1,8% 56.267 1.029 2,4% 57.038 1.357 11.637
Volkswagen D 1,2% 95.268 1.120 0,8% 88.963 677 15.454
In Million Euros | actualization: 31.12.2005 (because annual reports for 2006 are not
complete) | source: Handelsblatt.com
Last month, Porsche gave an outlook for the current financial year, which ends July 31,
saying
car sales and earnings will be around last years level but it would be unlikely to match the
2.11
billion Euro pretax profit reached in the financial-year 2006 as that figure was inflated by
several
one-time effects (e. g. the sale of CTS Fahrzeug-Dachsysteme GmbH with a profit of 80.7
