CHAPTER ONE: INTRODUCTION
Background of the Porsche A.G Company
The global automobile industry is constantly shifting to the recent innovations in the technology industry. This new innovations come with its own business opportunities for any company and also not forgetting the business challenges brought up by this changing technologies and innovativeness. This has prompted the automobile companies which include companies such as Porsche AG to respond and adapt to these changes in an efficient and effective manner so as to remain relevant, competitive and still outstanding in their respective industry. To remain competitive in the automobile industry, these companies have to apply strategies that can be embraced and lead to success for the company within a short period of time. Porsche AG is an automobile manufacturing company with its headquarters based in Stuttgart, Baden-Wurttemberg Germany.
The company was founded by Ferdinand Porsche in the year 1931 which means that Porsche AG is 87 years old in the automotive industry. Porsche AG is a short form for the Dr.-Ing. H.c. F. Porsche AG. In the early years after the invention the company was involved in the offering of motor vehicle development works and consulting on motor vehicle technology, however, the company did not manufacture motor vehicles under its name for a long time. The first major jumpstarting assignment the Porsche AG received was when the German government gave it the go-ahead to manufacture cars for the people of Germany in what was referred as the "Volkswagen". It's through this opportunity by the German government that resulted in the production of the Volkswagen Beetle which was one of the most successful car designs of all times since the inception of the automobile industry.
Porsche AG had a significant role during the world war periods. During the world war II, the production of the first automobile vehicle for the Porsche which was Volkswagen and turned them into the military version of the Volkswagen vehicle for the German Government. The company has had significant developments since the first production which was the Volkswagen Beetle. In the year 1972, the organization's authoritative document was changed from KG which implied or restricted association or limited partnership to AG which implies public limited company, since Ferry Porsche came to trust the size of the organization exceeded a "family activity", in the wake of finding out about Soichiro Honda's "no need to have relatives in a company" strategy at Honda. This prompted the foundation of an executive board with individuals from outside the Porsche family, and a Supervisory Board comprising to a great extent of relatives. With this change, most relatives in the management of the company, including F. A. Porsche himself and Ferdinand Piech, withdrew from the organization. Porsche Relationship with Volkswagen
The Porsche AG company has had a good relationship with the initially what was known as the Volkswagen (VW) marque to what is recently known as the Volkswagen Group of companies which owns the other models such as the Audi AG. The reason behind this perfect relationship with Volkswagen is attributed to the fact that the first model of the Volkswagen (VW) marque which was the Volkswagen Beetle was designed by the inventor of the Porsche; Ferdinand Porsche .
Porsche AG and Volkswagen collaborated for the first time in the year 1969 when the two companies came together to produce the VW Porsche 914 model and the 914-6 whereby the latter model had the engine picked from the Porsche while the other model i.e. the 914 had its engine picked from the Volkswagen. Further collaborations continued in the year 1976 where their combination resulted in the production of the Porsche 912E model which was only available in the United States of America. The other model that was produced due to this joint effort by these two giant firms was the Porsche 924 model. This 924 model used the components from the Audi Company and was manufactured at Audi's factory based at Neckarsulm numbers of other models of the Volkswagen series were also produced from this factory. These models include the Porsche 944s; however, these models used fewer components from the Volkswagen side. The Cayenne model, which was introduced into the automobile industry in the year 2002 whereby the model shares its chassis with that of the Volkswagen Touareg and that of the Audi Q7 series. This model is being built at the Volkswagen Group factory which is based at its headquarters in Slovakia at Bratislava.
Corporate Restructuring of the Porsche AG
Porsche has undergone a number of restructuring up to where it is at the moment. The Porsche SE was an idea created in the year 2007 in the month of June by the renaming of the old Dr.Ing.h.c.Porsche AG. After then, the company became a holding company for the families' stake in the case of the Porsche Zwischenholding Gmbh which held almost 51.1% shares in terms of the old Porsche (AG) and that of the Volkswagen AG. During this process the new Dr.Ing .H.C.F Porsche AG. It was through this restructuring that the Porsche AG was created for the manufacturing of automobiles and car business.
Late in the year, 2009, Porsche SE and the Volkswagen AG reached a collective agreement that the car manufacturing process for there would emerge again by the year 2011 to form a new thing which is known as the integrated Automotive Group (IAG). Through this agreement, the leadership of the Volkswagen AG collectively agreed that they will let 50.76% of the total Volkswagen AG to be owned by the Porsche SE which in return will lead to Volkswagen AG management taking also a certain percentage of the Porsche management positions. This will eventually lead to the Volkswagen AG acquiring the ownership of the Porsche AG.
Looking the global trends in the automobile industry, Porsche AG has come up with a number of future retail market formats that would help it market their products in both the urban areas and most importantly exploring the wider markets of the world which are the rural areas. These global trends have led to a number of impacts in any industry. Considering our case in which we are dealing with the automotive industry, these changes in the global markets have both the negative and positive impacts on any company in the sector. One of the global trends that are currently being faced by any company is the urbanization and e-mobility. Urbanization refers to the increasing number of people that live in the urban areas. The increase in the population of urban areas is one of the opportunities for the automotive companies to invest in as this is where most of the consumer of these automotive products belongs. This global trend of urbanization has had massive impacts on the development and the growth of the automotive industry. In reference to the World Economic report releases in the year 2017, since the number of person living in the big cities of the world is increasing each day, there is the need for the automotive manufacturers such as Porsche AG. To be able to appeal to these residents of this cities so that they can be able to expand the market for their products. Porsche AG has come with a substantive plan on how it is going to utilize these opportunities and market their car models. In accordance with an interview carried out by the Survey Monkey on the automotive urbanization. A total of 22% of the total respondents who are the consumers of the automotive products live or are from the survey agreed that they are currently living in the big cities of the world. Also, 42% of the consumers agreed that they live in the suburbs and the same time a total of 28% of the total respondents who are the consumers of the automotive products such as the cars also live in the rural areas. From the total number of those who are living in the big cities, 67% of them are currently own cars. From these statistics, it is evident that the rising number of people moving into the cities creates an opportunity for the automotive industries to market their products due to the increase in the demand of these automotive.
Another Global trend is that of e-mobility. Electro mobility commonly referred to us as e-mobility is the global trend in the automotive industry where the automotive are being manufactured that are being electrically powered driver trains that are designed in a way that they are able to shift the different vehicle designs away from the common ones that make use of the fuels and the carbon gas emissions. This term electro mobility refers to the inclusion of the fully electric vehicle i.e. the vehicles that wholly depend on electricity. This term also refers to the hybrid electric vehicles and those types of cars that are using the hydrogen fuel cell technology. This term generally refers to the pro...
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