Porsche Case Study
Porsche: The Cayenne Launch
Synopsis of the Situation
Porsche has a legendary existence of more than 55 years with a brand image of being high-end, masculine, status-oriented sports car. Finding great growth and revenue opportunities in the light truck industry, Porsche announced to extend the product line by launching an SUV named ‘Cayenne’. This offended the Porsche enthusiasts and their negative responses overwhelmed the internet, press and media. Further, SUVs being associated with soccer moms, safety and conservatism withered Porsche’s brand image and even led to face-to-face confrontations between Cayenne owners and Porsche sports car owners who declined to accept Cayenne drivers as their Porsche brothers. The community backlash intensified when Porsche shift from the German handcrafted heritage of the brand to Japanese manufacturing processes for the new model. Such negative online and offline buzzes critically challenged Mr. Wiedeking’s decision to build Cayenne.
In-depth Analysis of the Situation
After 1992 under the leadership of Mr. Wiedeking, Porsche had been through major turnarounds. Company limited its production to two models i.e. Porsche 911 and Boxster in 1996; which were almost at the maturity stage of product life cycle. Hence, there was a need for a new model series to sustain the sales and revenue stream. A Sports Utility Car (SUV) was chosen as the new product category pertaining to its high demand in the U.S.; representing a lucrative sales opportunities and being the car type that relates to Porsche’s sporty image.
Key Challenges faced by Cayenne
During the course of Cayenne’s development and launch various major challenges were posed to the company which endangered the new product’s success. The most prominent ones included:
1. Entering an Intensely Competitive Market
2. Expected Shift towards Smaller, Fuel-efficient Cars
3. Changing Brand Image
4. Displeased Porsche Online Community
5. Escalating Capital Costs
6. Questioned Brand
Synopsis of the Situation
Porsche has a legendary existence of more than 55 years with a brand image of being high-end, masculine, status-oriented sports car. Finding great growth and revenue opportunities in the light truck industry, Porsche announced to extend the product line by launching an SUV named ‘Cayenne’. This offended the Porsche enthusiasts and their negative responses overwhelmed the internet, press and media. Further, SUVs being associated with soccer moms, safety and conservatism withered Porsche’s brand image and even led to face-to-face confrontations between Cayenne owners and Porsche sports car owners who declined to accept Cayenne drivers as their Porsche brothers. The community backlash intensified when Porsche shift from the German handcrafted heritage of the brand to Japanese manufacturing processes for the new model. Such negative online and offline buzzes critically challenged Mr. Wiedeking’s decision to build Cayenne.
In-depth Analysis of the Situation
After 1992 under the leadership of Mr. Wiedeking, Porsche had been through major turnarounds. Company limited its production to two models i.e. Porsche 911 and Boxster in 1996; which were almost at the maturity stage of product life cycle. Hence, there was a need for a new model series to sustain the sales and revenue stream. A Sports Utility Car (SUV) was chosen as the new product category pertaining to its high demand in the U.S.; representing a lucrative sales opportunities and being the car type that relates to Porsche’s sporty image.
Key Challenges faced by Cayenne
During the course of Cayenne’s development and launch various major challenges were posed to the company which endangered the new product’s success. The most prominent ones included:
1. Entering an Intensely Competitive Market
2. Expected Shift towards Smaller, Fuel-efficient Cars
3. Changing Brand Image
4. Displeased Porsche Online Community
5. Escalating Capital Costs
6. Questioned Brand