Porsche: The Cayenne Launch Case Solution
Introduction &Problem Statement
Porsche is famous for expensive and high performance sports cars. The company launched its first model 356 in the month of June of the year 1948. Porsche has established brand equity associated with its sports cars which the company acquired by the launch of various successful sports cars models. In the year 1998, Porsche released its plan to build an SUV as the SUV became popular in different countries along with US, Australia, UK and Canada and it became the most popular model for female drivers in US.
As the company made announcement about the launch of Porsche Cayenne in order to expand its product range,the company faced certain problems with respect to its launch as it is expected to be the first SUV model of the company.The positioning of the Cayenne became a challenge for the company and the management of the company is facing a lot of criticism with respect to the launch of Cayenne.
In addition to this, SUV model faces criticism in the US by cultural critics and by its consumers on social community such as Reenlist. Therefore, in order to avoid such criticism the management of the company should identify a course of action that would help the company in order to respond its loyal customers and in order to reduce the negative impact of the Cayenne that could harm the Porsche’s brand image and long term strategy of the company.
Company Analysis
Porsche is operating in an automobile industry and it is famous for producing luxury sports cars. In order to remain competitive and to get a competitive advantage over its competitors, the management of the company focuses on its quality and upgrade technology which helps the company to produce high quality and sustainable sports cars which builds the brand image of the company throughout the world.
The company produces its first sports car in the year 1953 and it launch edits model 914 by the collaboration of Volkswagen in the year 1970. Due to the collapse in the US stock market, the sales of the company declined significantly and reached to the volume of 14000 cars per year by the end of the year 1993 and it is expected that it was 50000 cars per year at the end of the year 1986.
This financial crisis affects the purchasing power of the people, therefore in order to overcome this financial crisis the management of the company took certain measures such as it follows the cost cutting and low pricing strategy in order to increase sales which helps the company to avoid bankruptcy.
The company is currently focusing on the niche market and it is considered as the most profitable niche car manufacturer and all sports model of the company are also considered as highest profit margin models.In addition to this, Porsche is also considered as a business of making fun cars and most of the consumers of the Porsche are sports car lovers.
Market Analysis
Porsche is operating in an automobile industry. Moreover, the automobile industry is a continuously growing industry. It is expected that great number of market players are operating in this industry therefore, the competition in the automobile industry is extremely high as each player is focusing on high quality and pursuing advance technology in order to attract great number of customers and in order to attain greater market share.
It is expected that SUV market has established its root deep into the automobile industry and gained grip upon the market in late 90’s. Now SUV is considered as the fastest growing market in the automobile industry although financial crisis and economic downturn affect the market adversely however, SUV market strengthens the automobile industry as SUV are considered as most powerful vehicles.
Due to low prices it is expected that the fastest growing group of the SUV consumers is middle class and upper middle class.
However, in the 2000’s, SUVs and SUV owners began to be criticized. In particular, the “perception of enhanced driver visibility and safety”2 widely associated with SUVs was debunked, and concerns about global warming led to a trend toward smaller, and more fuel-efficient cars. It was at this time (2003) that Porsche entered the SUV market with its SUV Cayenne. The fact that these associations were strengthening at this time can help explain the level of negativity that Porsche encountered among its enthusiasts on Rennlist. Posts that criticized soccer moms and their associated uses of a car are very similar to the comments made by Keith Bradsher in his book, which painted these associations as opposite to Porsche’s target demographic of male sports car enthusiasts....................
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