ASSIGNMENT 2 FRONT SHEET
Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 32: Business Strategy (574)
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Student name Phan Thanh Minh Student ID GBH200467
Class GBH0906 Assessor name Nguyen Thuy Linh
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understand that making a false declaration is a form of malpractice.
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Minh
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P2 M2
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Table of Contents
I. Introduction ............................................................................................................................................ 4
II. Strategic capabilities of Porsche ............................................................................................................. 4
1. Benchmarking and value chain concept.............................................................................................. 4
2. Value chain and benchmarking of Porsche ......................................................................................... 5
2.1. Primary activities .......................................................................................................................... 5
2.2. Secondary activities ..................................................................................................................... 8
III. VRIO analysis for Porsche .................................................................................................................... 9
IV. Strengths and weaknesses of Porsche .............................................................................................. 10
V. Conclusion ............................................................................................................................................. 11
References .................................................................................................................................................... 12
I. Introduction
Ferdinand Porsche established Porsche AG on April 25, 1931, with its headquarters in Stuttgart, Germany.
Porsche AG is currently one of the world's premier sports car manufacturers after 87 years of adhering to
the brand's business philosophy (Porsche, 2021). Currently, Porsche has been acquired by the Volkswagen
Group, so the company will receive a lot of help from the parent company. In addition, some of Porsche's
management and operation methods will be similar to those of the Volkswagen group (Porsche, 2021).
The following report will focus on analyze the strategic capabilities of Porsche by using Benchmarking
model and value chain concept. Besides, it also use the VRIO framework to measure the competitive
advantages and Porsche’s strengths and weaknesses.
II. Strategic capabilities of Porsche
1. Benchmarking and value chain concept
Benchmarking is a technique for comparing and contrasting strategies, functions, processes, goods or
services, and performance across companies or enterprises on a continual basis (Anand & Kodali, 2008).
In this report, BMW will be selected for analysis to see the strengths and weaknesses of Porsche compared
to a competitor in the automotive industry.
The value chain is a concept that deals with the numerous business activities and processes involved in
the creation of a product or the provision of a service. A value chain can comprise various stages of a
product's or service's life cycle, such as research and development and sales (Stobierski, 2020). The
following part will illustrate the strategic capabilities of Porsche by using benchmarking and also value
chain concept.
The value chain figure (Stobierski, 2020).
2. Value chain and benchmarking of Porsche
2.1. Primary activities
a. Inbound logistic
For Porsche, the company's logistics staff will be primarily responsible for receipt of goods, for quality
control, to ensure that parts arrive on the line in proper and undamaged condition and also warehouse
management (Ludwig & Ludwig, 2010). Porsche maintains a storehouse with more than 125,000 different
pieces of material. All of these resources are handled and kept on a computer network called a server
system. This server system is in charge of estimating the position of materials so that workers may pick up
products in the most convenient manner feasible in the smallest amount of time (Schönfeld, 2020).
Benchmarking: In contrast to Porsche, where resources are inherited from the parent firm and hence do
not need to be imported, BMW is required to import practically all of the materials required to run the
production line. Raw materials from Germany account for 42.6% of the total, while raw materials from
Eastern Europe account for 19.7% of the total (BMW, 2020).
b. Operation
A Porsche product will go through three major stages throughout its operation: the body shop, the paint
shop, and the assembly line (Porsche , 2021). In specifically, the body shop is responsible for assembling
the car's body into four major pieces, which are constructed from the bottom up. The undercarriage will
be fully built first, after which the side panels and roof will be attached to the underbody of the vehicle.
Following that, the automobile will be outfitted with additional doors, a bonnet, and a trunk lid (Porsche ,
2021). The final stage is to inspect the joints, the surface quality, and the gap size and placement. After
checking that the quality matches the needed standard, the automobile will be transported to the paint
shop where the final paint coat will be applied to the vehicle. It is the final step of the operation to
reassemble all of the missing components, including the engine, gasoline tank, brakes, and the interior of
the automobile. After that, the vehicle will be subjected to a stringent quality inspection before being
released onto the market for sale (Porsche , 2021).
Benchmarking: Porsche operates in a very different manner than BMW. For BMW, the product will go
through four major phases throughout its operation: the press shop, the body shop, the paint shop, and
the mounting stage (BMW, 2020). BMW, on the other hand, concentrated its efforts in the first and second
phases of the operation on building the car's exterior frame components, in a manner comparable to the
first stage of Porsche's process. The remainder of the business operations of the two automobile
manufacturers are identical. At least one person will be on hand to meticulously inspect and test each
component as it is assembled, in contrast to BMW, where the whole assembly process will be carried out
by robots rather than humans (BMW, 2020).
c. Outbound logistic
It is imperative that Porsche's outbound logistics system be run and managed in a precise and controlled
way. Shipments arriving by plane are handled differently. They are kept separate and closed off and may
only be accessed with specific permission from Porsche (Porsche , 2021). Consequently, the corporation
will be able to remove the need for time-consuming security inspections at airports, which will allow goods
to reach their destinations more quickly. Furthermore, for large orders or orders that are not urgent,
Porsche will ship by sea and hold the goods in intermediary warehouses that are now situated in 10
countries, including significant markets such as the United States and China (Porsche , 2021). Porsche
believes that in order to achieve intelligent performance, the company must ensure that everything from
the time of order reception to the time of shipment is accomplished within 90 minutes (Porsche , 2021).
Benchmarking: BMW outbound logistics is concerned with the stability of processes, the analysis of data,
and the pursuit of continual improvement (BMW, 2020). Trains and delivery trucks will be the primary
modes of transportation for BMW products. According to BMW (2020), approximately 10,000 automobiles
leave the manufacturing line every day and must be sent to buyers all over the world, according to the
manufacturer (BMW, 2020). This enables BMW to meet the demands of the market for consumer goods
on a consistent basis. This demonstrates that BMW's transportation system is more efficient than
Porsche's.
d. Marketing and sale
Customers are delighted with Porsche's powerful sales staff, which provides them with outstanding
personal experiences. Besides, Porsche sales channels are intelligently linked, service is visibly networked,
and client orders are consistently and effectively controlled throughout the organization (Porsche , 2021).
Moreover, the organization develops strategic circumstances that allow all sales, marketing, and service
operations to be perfectly matched to the particular preferences of each consumer (Porsche , 2021).
Porsche is always convinced that it will be able to satisfy even the most demanding clients using this
approach.
e. Services
Porsche thinks that the corporation should constantly be focused on the needs of its customers. It is the
company's goal to understand consumers' journeys and follow them along the way, all while maximizing
their relationship with the brand (Porsche , 2021). Therefore, Porsche constantly strives to deliver the
finest service possible to ensure that even the most discerning clients are completely satisfied with their
purchase. Following the purchase of a Porsche product, the company provides rigorous and considerate
after-sales service and warranty packages. Furthermore, following each service at Porsche, the inside and
exterior of the customer's vehicle will be thoroughly cleaned and polished in the most attentive and
professional manner (Porsche , 2021). Moreover, when consumers are faced with an emergency situation,
Porsche provides them with 24-hour emergency support. But that's not all: Porsche provides enticing
after-sales services to guarantee that the product is always treated with the utmost care and precision
(Porsche , 2021).
Benchmarking: Porsche's pre- and after-sales services are quite comparable to those provided by BMW.
Operations, marketing, and sales are all important after-sales services for BMW since they will assist the
company build customer loyalty and enhance repurchase rates, according to the company (BMW, 2020).
Furthermore, because BMW is a well-known brand with a well-established position in the automotive
business, this will aid the firm in establishing a favorable reputation in the eyes of customers.
2.2. Secondary activities
a. Infrastructure
When it comes to servicing equipment, Porsche infrastructures exclusively utilize the most up-to-date
models, which are routinely maintained and adjusted to offer the greatest degree of safety and accuracy
possible in the field. Furthermore, Porsche infrastructures are always meticulously guaranteed and are
subjected to frequent inspection in order to provide consumers with the finest possible experience
(Porsche, 2021).
b. Procurement
Porsche procurement departments are responsible for external value add management, as well as
ensuring the highest possible pricing and usability. Procurement, as a catalyst for innovation, also makes
a significant contribution to competitiveness. Additionally, Porsche consultants build a company-specific
departmental plan using a proven four-stage procedural approach in order to reduce money and improve
income. They then develop precise measures to carry out this approach (Porsche, 2021).
c. Human resource management
At Porsche, the human element is always at the center of attention. The employees are the key factor to
determine the future development of the business (Porsche, 2020). Moreover, the company also
emphasizes the importance of balancing and continuously improving the working life of employees. For
Porsche, the company will always have equal opportunities, fair remuneration based on work performance
to promote employee performance (Porsche, 2020). Porsche always pays great attention to key factors
such as employee attraction, staff development, Corporate co-determination and Occupational health and
safety. Therefore, the company is always able to bring efficiency as well as the best opportunities and
support to Porsche employees (Porsche, 2020).
d. Technology development
Porsche places a high value on upgrading and developing technology, which is always a top priority for the
corporation. Porsche has implemented artificial intelligence in its operational process to manage
inventories as well as customer orders and requests. Aside from that, the firm is devoted to the
advancement of electric vehicle technology with a view to conserving the environment and promoting
public awareness of the issue (Porsche , 2020).
In sum up, through the use of benchmarking and value chain framework, Porsche possesses some
significant strategic capabilities such as excellent services, high technology innovation, and efficient
operating process.
III. VRIO analysis for Porsche
VRIO analysis is a good approach and analysis for evaluating a business's resources and skills that
contribute to competitive advantage. The VRIO concept is divided into four major components: value,
rarity, imitability, and organizational support (Knott, 2015).
Strategic Organizational Strategic
Value Rarity Inimitability
capabilities support implications
Excellent
Yes No No Yes Competitive parity
services
High
Sustainable
technology Yes Yes Yes Yes
competitive advantage
innovation
Efficient
Sustainable
operating Yes Yes Yes Yes
competitive advantage
process.
The first strategic capability of Porsche is excellent service and it will be proven as a competitive parity.
However, Porsche's pre- and post-sale service is rated as very good as well as providing a satisfying
experience for customers. However, other luxury car manufacturers can offer their customers the same
experience as well as after-sales services similar to those of Porsche. This will motivate Porsche to change
as well as create more attractive services as well as take care of customers more carefully and meticulously
than before to gain a competitive advantage (Porsche, 2021).
The second strategic capability of Porsche is high technology innovation. This strategic capability will be
proven as a sustainable competitive advantage. In today's car manufacturing market, there are currently
very few car companies that can apply artificial intelligence to production lines and operations as Porsche
does. In addition, although the current trend is electric vehicles, but because it has experience in
manufacturing and manufacturing these models earlier than passenger car manufacturers, Porsche can
still ensure that the It will be difficult for the industry to be overtaken in the race to develop new
technologies with rival companies in the automotive industry (Porsche , 2020).
The last strategic capability of Porsche is efficient operating process. This will be proven as a sustainable
competitive advantage. Owning an efficient operation process will bring high work productivity and
thereby help the company maximize revenue (Porsche, 2021). This will give Posche a sustainable
competitive advantage when compared to competitors in the automotive industry.
IV. Strengths and weaknesses of Porsche
By doing the aforesaid study, it is simple to identify the strengths and shortcomings that remain in
Porsche's management and operation system. Porsche's traditional qualities include high levels of service
quality as well as product quality that is always assured at the highest possible degree of perfection
(Porsche, 2021). Product lines that are targeted at clients who are wealthy and affluent are always valued
highly by the organization, as are services and goods that must be thoroughly inspected before being
offered to ensure that they meet high standards of quality. Providing transportation to and from
showrooms and consumers (Porsche, 2021).
Aside from its advantages in terms of product quality and service, Porsche also has several drawbacks that
must be addressed, the most significant of which being its limited market share and coverage. The firm
does not have many consumers as a result of this, but Porsche clients are frequently quite devoted to the
brand as a result of the high quality of the products and the great after-sales care that the automobile
company provides (Porsche, 2021).
V. Conclusion
In conclusion, it can be seen that the report has analyzed the internal environment by using benchmarking
model and value chain framework. Besides, the VRIO framework have also been used to analyze
competitive strengths to help Porsche develop their strategics short-term and long-term to develop a
more successful business in the future.
References
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