Ferdinand Porsche Case Study Solution

Contents

I. Ferdinand Porsche

II. Analysis

III. Alternatives

IV. Recommendations

V. Action Plan

VI. Conclusion

Introduction

Ferdinand Porsche together with his son and son-in-law, Anton Piềch founded Porsche in 1931 as a design and engineering firm that sold it services to other automakers. It was until 1948 that Porsche produced its first car, a Porsche branded sports car. However, in early 1930s Porsche had been involved in the manufacture of Volkswagen also known as the “people’s car,” which led to the opening of the first manufacturing plant for VW in 1938. Porsche, the automaker firm had, by 2007 become the most profitable carmaker on the per unit basis, having only produced an average of 100,000 cars per annum. Porsche for three consecutive

Through its strategy and philosophy of quality designs, Porsche rose through the ranks to become the number one automobile firm in the world at least on the basis of revenue per manufactured unit. In comparison with other major car makers such as Ford, GM, and Toyota, Porsche had, by 2007, on 12,202 employees and only sold approximately 98,600 units whereas the other big firms made unit sales in millions, yet Porsche still managed to have the highest net revenue of 9, 400 million dollars. Is enabled Porsche to up its stakes to 50.7% in VW, thus acquiring a controlling stake. In that case, Porsche, a 100,000 expensive sports car maker per annum, took over a national institution that makes and sells more than five million automobiles per annum. Acquiring VW will enable Porsche to harmonize and reduce its production cost especially with regards to electronics by spreading the 35% of the development cost incurred in electronics for 100,000 units spread over to the manufacturing of more than 2 million

However, Porsche should take completely control of VW to not only to leverage on synergies but, so that it streamlines the management and strategies of the two firms into one, thus ensuring that VW does not act as a disturbance as was the instance with Daimler and Chrysler. However, earlier in the 1990s, Porsche saw its sales volume slump by more than 36,000 units and teetered on the verge of bankruptcy that it was almost taken over. Alternatively Porsche should seek to amend the law at VW that states that a company owning 20% shares, such as Lower Saxony, can block strategic decisions made by the majority shareholders instead of a German law that sets it at 25%. This will ensure protect its control in VW, in terms of decision making. Most importantly, Porsche should endeavor to up its stakes in VW from 50.7pc to 75pc so that it to seal a domination contract enabling to have the groups full financial control(Jacobs and