Nike's Core Competency: Is Porsche Killing The Golden Goose?

Strategic Management in Organization
Portfolio Assessment Details

Part A-i “Is Porsche Killing the Golden Goose? (Business Strategy)”
Word count: 543

Part A-ii “Nike’s Core Competency: The Risky Business of Fairly Tales”
Word count: 621

Part A-i Porsche Business Strategy
In the luxury car industry that Porsche has developed for more than 100 years built a strong industry barrier for new comers, including the aspect of capital, technology, reputation and experiences. Recently, Porsche modified its business strategy from focused differentiation to broad differentiation. From only sports car like 911 to more models, such as Cayenne SUV, Panamera sports sedan, Macan (Rothaermel, 2015)
Here are several risks of Porsche’s repositioning. First,
First, Porsche enjoys large profit margins from its more multiple models. Appendix A clearly shows that Porsche sold 84,041 Cayenen SUV in 2014, achieved the best sales in history, Macan attained best sales in 2015, and had been sold 80,216 units (Porsche, 2015). Thus Porsche earns a great more revenues from its multiple models rather than revenue that only come from 911 before. Appendix B shows that multiple models help Porsche achieved significant sales revenue growth in the volatile environment from 2011 to 2015, especially the sales revenue in 2015 increase by 25% from 2014 (Porsche, 2015). Porsche no longer solely focus on its traditional target customer but instead be forced to appeal to multiple consumer segments, thus its multiple revenue stream also lower the risk, even one kind of its models cannot sell well, Porsche can earn revenue from other models. Secondly, economy of scale, after VW’s acquisition Porsche increased its output greatly, it lets Porsche be able to reduce the production and operation cost of each unit. As a result of Porsche sharing same technology with other vehicle lines, such as using common electronics components and instrument (Meiner, 2006). For example, Cayenne SUV and VW Touareg use the same platform (Kurylko, 2010). It helps Porsche lower the costs of
From 1984 to 1996, Nike signed the endorsement contract with Michael Jordan, thus shaping the brand image of the professional basketball shoes, surpass Adidas and Puma as a leading brand in the industry (Kincade, 2010). The success of Nike air shoe let Nike acknowledge, design and promotion is the most powerful weapon in the competition. In order to concentrated on its core competency in the design and promotion, Nike didn't go to set up their own production base, instead of be supplied by around 146 footwear factories located in 14 countries, around 408 apparel factories located in 39 countries (Nike,