Porsche Volkswagen Merger Case Study

GET HELP INSTANTLY

Place Your Question Here

Porsche Volkswagen Merger Case Study

Porsche Volkswagen Merger 

 

Type of Industry

Auotmotive

Headquarters

Stuttgart, Germany; Wolfsburg, Germany

Sales/Revenue

Volkswagen: €235.849 billion 

Porsche: ‎€21.533 billion (2015)

Area Served

Worldwide

Number of Stores

NA

Competition

  • Lamborghini
  • Mercedes Benz

USP

Advanced technology  

Target Group

Higher income groups

Products

Automotives

Website

www.porsche.com; www.volkswagen.com

Porsche Volkswagen Merger Case Study Introduction

The Porsche Volkswagen merger case study reveals the importance of business mergers in terms of business expansion and in respect of ensuring business growth and development. It should be noted that though Porsche had been a better financial position than Volkswagen, the former needed to merge with the latter in order to ensure its business growth and expansion in newer markets. It should also be noted that though Porsche first thought of taking over Volkswagen, the decision was altered with the view of sustaining Porsche’s strong financial position. The Porsche Volkswagen merger case study has been conducted to understand the factors that led to the merger eventually. A SWOT and PESTLE analysis has to be conducted in order to strengthen the Porsche Volkswagen merger case study.

Porsche Volkswagen Merger SWOT Analysis

Strengths

The Porsche Volkswagen merger case study reveals that the primary strength of the merger has been technology and workforce development. A closer look into the Porsche Volkswagen case study reveals that Porsche took the step primarily to develop its technology and to sustain its market hold. Moreover, the financial vigor provided by the merger should also be considered a strength of the merger. It should also be noted that the merger paved the way for Porsche to strengthen its workforce and it provided opportunity to Volkswagen to enhance its financial position and growth proposition. Besides, the merger fueled Porsche’s profitability and helped the Company in avoiding excessive outsourcing that was actually weakening the internal performance of the Company in a thorough manner. Furthermore, it must be noted that the merger provided opportunities to Volkswagen to protect itself against a hostile takeover by an automotive giant.

Weaknesses

The primary weakness of the merger as revealed by the Porsche Volkswagen merger case study is that, it compromised the individual standpoint and market reputation of both the Companies. The merger resulted in clash of cultures and this eventually, for a brief period, made the internal environment of both the Companies dilemmatic. Moreover, it has been observed that, adding to the weaknesses, the merger eventually brought about diseconomies of scale for a considerable period of time. Besides, it has been noticed that the merger made it tougher for the managements of both the Companies to coordinate between the employees who belong to different cultures.

Opportunities

Despite weaknesses, as revealed by the Porsche Volkswagen merger case study, the merger provided some specific growth opportunities to both the Companies. In this respect, it should be noted that, the merger helped the Companies to grow the market share in a thorough manner. Moreover, the merger made it possible for both Porsche and Volkswagen to reduce the cost of operations in an explicit manner. Owing to the larger economy of scale, the merger eventually was able to contribute to the reduction in the cost of overall operations of both Porsche and Volkswagen. Besides, the merger also provided opportunities to the Companies to ensure revenue and profit growth.

Threats

The Porsche Volkswagen merger case study reveals that the primary threat posed by the merger is negative customer perception. The merger can eventually trigger misconceptions among the customers about the actual strength and reliability of the merged companies, and this can be a serious threat to the future business of the merged Companies. Also, the merger poses serious threat of increasing the price of products that can eventually encourage customers to refrain from purchasing the vehicles manufactured by the merged Companies. Also, the merger poses a serious threat to Porsche and Volkswagen in terms of increasing the marketing cost in the long run.

Porsche Volkswagen Merger PESTLE Analysis

Political Environment

Political environment plays a crucial role in shaping the future of any merger. This holds true for the Porsche Volkswagen merger too. The Porsche Volkswagen merger case study reveals the reviving political vigor of the European Union (EU) provided opportunity to both Porsche and Volkswagen to go for a merger, and moreover, thorough government support for business growth and expansion for strengthening the economy also provided opportunities to the Companies to indulge in a merger. Besides, strong customer protection regulations implemented by the government also compelled Porsche and Volkswagen to come together with a plan to overcome undue market hindrances.

Need Full Solution?

Request a FREE quote now!

Ask Now

Economic Environment

The economic environment plays a decisive role in terms of determining the success or failure of a merger, and in this respect, the Porsche Volkswagen merger is no exception. The Porsche Volkswagen merger case study reveals that the dilemmatic economic condition of the EU instigated both Porsche and Volkswagen to strive for safeguarding their financial and market position. This led to the merger eventually. Moreover, it has been observed that the financial growth opportunities that are usually provided by mergers allured both Porsche and Volkswagen to enter into the merger. Besides, Porsche knew that through merging with Volkswagen it can utilizes pure financial leverage and this economic opportunity eventually propelled Porsche to enter into a merger with Volkswagen.

Social/Socio-Cultural Environment

The social demand for more energy efficient vehicles that are environment-friendly eventually triggered the need of a merger that was eventually successfully conducted by Porsche and Volkswagen. The Porsche Volkswagen merger case study reveals that the social pressure of integrating sustainable practices in business operations eventually compelled Porsche and Volkswagen to enter into the merger and enhance their business practices and policies. Moreover, it has been observed that the European social culture of technology diffusion also instigated Porsche and Volkswagen to enter into a merger to reap the benefit of advanced technology integration in a thoroughly effective and fruitful manner.

Technological Environment

The need for integrating advanced technology into the production process eventually compelled Porsche to enter into a merger with Volkswagen. In this respect, it must be noted that Porsche largely manufactures engine and transmission and rest of the vehicle parts are usually outsourced. To overcome the problems triggered by outsourcing and to enhance the internal technology of the Company (in terms of production and manufacturing) Porsche eventually entered into a merger with Volkswagen.

Legal Environment

Stringent consumer protection law and stricter patent protection laws provided opportunities to Porsche and Volkswagen to enter in a merger that could eventually safeguard their market monopoly in a thorough manner.

Environmental Factors

The merger eventually paved the way for Porsche and Volkswagen to infuse sustainability in the business process and practice. The merging of technologies paved the way for Porsche and Volkswagen to develop vehicles that are more energy efficient and environment-friendly. Moreover, the merger also propelled carbon neutrality that helped the Companies to establish their brand image in the European markets in a positive manner.

GET 20% OFF On your first Porsche Volkswagen Merger Case Study Order Now

whatsApp
whatsApp