Cars

As mentioned above, the average age of a Buick buyer in the early to mid sass’s was in their early seventies. This was compared to the average age of 52 for a new car buyer in general. In 2008, Buick sold Just over 137,000 new cars for only a 4. 6% share of overall GM sales and only a 1. 04% market share In the united States. Advertising was almost non-existent. Buck’s idea of branding through corporate sponsorship of sporting events was to sponsor the Buick Open Golf Tournament. Golf Is not exactly geared towards a younger audience. Doesn’t mean that the younger audience will buy into the message and be converted.

There has to be a legitimate reason for a young audience to be attracted to the product and not Just because advertisers and marketers say you should. The main issue facing Buick was that they had a fleet of old looking cars that were not nearly as stylish as other luxury cars in similar segments. Management made a clear decision to market its class of automobiles to a young “urban” crowd in major cities with the hopes that if these urban trendsetters liked what they saw and began to purchase Buick, this would have a ripple effect into the mainstream market and would increase demand for Buick products across the board.

This strategy was pursued by customizing and detailing Buick Lucent’s with larger wheels, upgraded sound systems and detailing packages that catered to this younger urban buyer. The main problems with this strategy were threefold. The first problem highlighted in the case which I agree with is that management came across as insincere and out of touch. The media panel brought in by Buick commented that management “showed a disconnect between the brand and its target audience” and that “Buick idea of urban seems a bit old fashioned”.

Take for example Buick using Tiger Woods to remote Buick cars. As a part of Tiger’s sponsorship deal with Buick, I would believe that he may own a Buick or two but I also believe that Tiger’s car of choice is not a Buick! The second problem with this strategy was that by attempting to target a young urban audience, Buick risked alienating its core consumer which was an elderly suburbanite who didn’t have the first clue what “urban” was. If Buick customer base was alienated, that could mean the end of the brand.

The third issue that I see with the strategy is a touchy one because it’s a touchy subject and that is he issue of racism. When a predominantly Caucasian management team and brand attempt to target a Hipic and African American audience, if they are perceived as not being genuine or sincere, management could face whispers of racism and an anti-Buick backlash could easily taint and destroy the brand. Solutions In order to support management’s desire to attract a younger buyer, there has to be substance behind the marketing and advertising blitz.

Management has to seriously review the existing cars in the Buick brand and determine what young buyers are looking for in a luxury sedan. Once these consumer wants are identified, management must cater to them and design a younger looking class of cars with a level of luxury, quality, options, performance and price point that rivals or beats its competition within the class. Strong marketing campaigns can trigger consumer demand for only so long with smoke and mirrors. At the end of the day, the product has to meet customer and price determine success.

My personal observations of young car buyers are that certain aspects of a car are important to them. A sleek and sporty design is usually first and foremost. A car with regressive features like GAPS, MPH and Pod compatibility along with a high performance sound system resonate with young buyers as well. Of course young buyers don’t usually have as much money as older buyers so price and affordability are important to a young buyer. In today’s economy and society, young buyers are more conscious of going green and gas consumption so the cars should be fuel efficient and exceed emissions standards.

I also believe that Buick isn’t ready to Jump into the “urban” market. While I do believe in marketing towards a younger audience, I’m not sure I would risk the brand on ailing to the urban market in the hopes that this will crossover to mainstream America. There are plenty of marketing opportunities that can target a younger audience in mainstream America. Today, movie theaters show ads prior to movies and as we all know, young people make up the largest share of movie goers.

I like Buick strategy of displaying Buick outside of clubs, bars, trendy shops and restaurants. At this stage of their brand repositioning, any “buzz” about a Buick is great for the brand and to have it on the tips of people’s tongues is the first step in hanging consumer perception that a Buick can be an option for a young buyer. I would also look to supplement traditional marketing strategies like print, TV, billboards and national campaigns with an internet and social media marketing strategy and campaign on Twitter and Backbone.

Young consumers have a vast and important presence on these social media outlets. I would look to sever ties with the Golf sponsorship and Tiger Woods and either eliminate the use of celebrity endorsements altogether or revisit the celebrity spokesperson to be a more realistic Buick user. Any strategy to increase market share in the luxury segment must involve dealing with the strong presence that imports have. The main way that domestic cars can compete with imports is on price.

Young buyers are also very focused on price especially if they are a first time car buyer or even a baby boomer looking to save money in a tight economy. Based on my problem cited above with young buyer perceptions of what a Buick is, it would seem that Buick would struggle to get potential young buyers into their showrooms to even test drive a Buick. As such I would consider providing incentives o prospective buyers to come to a dealer and test drive a Buick. These could include cash payments or a reduction in price if they purchase a Buick.

Incredulous, you replied, “You stopped? How many billions of dollars did It cost to build brand loyalty around the Taurus name? Well, you’ve got until tomorrow to find a vehicle to put the Taurus name on. Then, you have two years to make a new Taurus which had better be the coolest vehicle that you can possibly make. ” So, in less than four hours, you made your first billion-dollar decision. It wouldn’t be your last. With billions of dollars in losses, you eliminated 46,000 Jobs, sold off Gaston Martin, Jaguar, and Land Rover, and cut truck and SUB production by 40 percent.

Despite these drastic moves. Ford still lost SSL 2. 6 billion your second year and $2. 7 billion your third. With losses still mounting, the first major issue you need to address is vehicle customization, that is, maximizing consumer choice by producing different cars with different parts for different world markets. Vehicle customization originated in 1967 when Ford’s European operations were created to design and manufacture cars Just for Europe. Consequently, when Ford attempted to cut costs by creating a common “world car” to be sold In Europe and the united States, It failed.

The resulting cars (yes, “cars”), one designed In Detroit and the other In Germany, were completely different except for two shared parts. The second major issue is that Ford’s management teams have difficulty staying on target and tracking company performance. Even with downsizing, Ford is a complex company with 205,000 employees, multiple product lines, and international operations on four continents. Surprisingly, Ford’s managers only stay in their Jobs a few years. And, If you’re off to your next Job and don’t have to live with the consequences of your decisions, why are about whether you meet your department’s or division’s goals?

The final Issue Is that contentious relationships between Ford’s divisions have produced dysfunctional decision making. Different geographic regions and functional divisions, such as engineering, production, and sales, are more interested in doing what they want than what is best for Ford as a whole. Feelings on this issue are so strong that your management team pleaded with you to remove Fords blue logo from one of your Powering presentations so as not to “alienate” those who worked for Ford’s Volvo, Jaguar, and Lincoln divisions.

At the time you agreed, but now realize it was a mistake. Three years ago, you arranged for $23 billion in loans to get the company through tough times. And with Chrysler and GM in bankruptcy, and industry sales off 35 percent, you’ve needed every dime. But, you’re 65 percent through those funds, so you’ve got to address these key Issues. Ford’s survival depends on it. If you were the CEO AT For a, want would you 00? Questions 1 . Should Ford continue to make different cars for Europe and the United States? If so, how do you lower expenses?

If not, then how do you get the company to produce the “world cars,” when it has failed to do so before? What should Ford’s strategic objective be here? 2. Beyond making managers stay longer in their Jobs, which won’t be popular, how will you change Ford’s culture so that managers pay attention to company plans and feel accountable for meeting performance targets? 3. Finally, what will you do to address the dysfunctional way in which decisions are made, where different departments and units care more about their issues than the company’s issues? Sources: M. Dolan, J. Stool, and N.

Automatic vs. stick shiftbuying a new car might be a great experience. The question is which one is better, automatic or stick shift? It all depends in what you would prefer and what do you expect from the car. Saving gas, safety and fun are three important reasons to think before making a decision. It’s important that you know your needs are when deciding what type of transmission to get. Do you want a compact car or a larger vehicle? Do you have experience with a stick shift transmission?

Will you be driving long distance, road trips, or driving in the city? Do you want to do your own repairs? Why are automatic cars so popular? Since most people drive in the city or in stop and go traffic, automatic cars are more convenient. Even though automatic cars are more expensive and tend to wear down faster. Cars with automatic transmission are a great way to drive around. They do not require much driving skills than stick shift cars. Automatic cars are made comfortable way of driving especially driving in heavy traffic.

People who don’t like to drive usually choose an automatic transmission. Automatic transmission require a lot of attention to the engine and keeping up with all of the services such as oil changes, brakes, filters and transmission fluids. Automatic transmission are improving their standards and slowly catching up with to become more fuel efficient. However in some cases vehicles can still be as much as 10% increase in fuel use for an automatic transmission! Overdrive gears can help this problem also.

Automatic shifts are not as fun as a stick shift because there not as challenging. On the other hand stick shift transmission saves you hundreds of dollars. Stick shifts are easier to repair and you may be able to do small repairs on your own. Stick shift transmissions have better gas mileage, they also have smaller engines, but they have a lot of power. For example racecar drivers prefer stick shift transmission because it allows them to take control and also the stick shift has more power.

Race car drivers use stick shift to take driving to a higher standard. Even though stick shift saves you more money and gives you better gas mileage, if you stayed in the city like New York having a stick shift wouldn’t be your choice. Stick shifts are good for driving over a long stretches are good for road trips, driving in the city with a stick shift causes wear and tear on your clutch. Which sometimes can very expensive to fix, most people say that is just too much work to keep switching gears when you are in stop and go raffic, if you have experience driving a stick shift your transmission can last a lot longer than an automatic transmission. If you are looking for a larger vehicle or an SUV it would be hard to find stick shift switching gears to reduce speed also can save you on break repairs, stick shift transmission require you to be more active with your car and it allows you to pay attention when there is something wrong with your car because you’re not in control, so it’s hard for you to pay attention when there is something wrong with your car.

How you feel in the car as well as you can handle the car. For a passive driver who is interested in learning how to coordinate the clutch then stick shift has a better handling for you. Stick shift has a lot of different gears and speed which require a stronger set of hands to control the wheel while driving. The automatic has normal handling on the wheel even when going at a faster speed an automatic can drive itself without the need to shift from one gear to another no matter how fast you go.

The stick shift transmission requires you to learn to shift between one to five different gears. The transmissions are built differently when comparing an automatic to a stick shift transmission. With a stick shift you have to switch gears while you’re driving. The difference between an automatic or stick shift transmission, both come with different prices. When you are putting on an automatic transmission can range from a few hundred dollars cheaper than a stick shift transmission. Stick shift transmission is preferred for traditional racing.

Where quick gear changes are required to exit turns quickly. Automatic transmission could not keep up with a skilled driver using a stick shift automatic transmission are preferred amongst the common drivers because of its ease of use a manual transmission requires coordination between the clutch throttle, and shifting of gears to provide a smooth ride and not damage the transmission. This decision is yours it’s your personal preference on what kind of transmission you would want to drive daily.

I prefer driving an automatic car because it is much easier and comfortable for me. I live in a small town and I drive long distance to work and automatic always have been my favorite. I never wanted to learn how to drive a stick shift car even though it saves more on gas. I like to be able to relax when I drive. A stick shift requires too much, you have to switch gears constantly and it’s difficult in lots of traffic. Automatic vs. stick shift it’s your decision cars are made for driving. The choice is yours.

Business organizations especially those dealing with fast-changing environment must encounter situations where their successes depends on several factors. The situation causes them to face uncertainty as the factors threat the company’s continuity. The factors usually can be elaborated in many details in two large groups: internal and external factors. Under such circumstances, it is useful to carry out an analysis that takes into account not only the company’s internal factors, but also external factors such as activities of the company’s competitors and current industry situation as well.

Currently, there are many business analysis tools that organizations may use depending forces that influence the companies and the complexity of markets they serve. Automobile industry is one segment in business that exhibit fierce competition due to the large number of providers/ vehicle manufacturers and the variety of customers preferences that spawn many kinds of vehicle type like SUV (Sport Utility Vehicle), MPV (Multi Purpose Vehicle), race cars etcetera.

In addition, the need to understand automobile industry is imperative since the industry experiences fast-changing environment that demands automakers to obtain appropriate strategy to win the market. BMW as an automaker of luxury automobiles realizes the condition and perform appropriate move by developing multi brands to compete with competitors that have various products in several segments at once.

There are several reasons why BMW decides to manufacture and maintain multi brands in their product lines as following:

Customers have diverse behavior that cannot meet with a single product offering

Customer relationship improvements in other industries

Fierce competition in automobile industry throughout the world Concerning the situation, this paper will discuss about markets of automobile industry especially regarding the impact on these markets by using several business analysis tools including strategic group, Porter’s five forces, and PESTLE analyses. In addition, this paper will also discuss about the product market mission of BMW and Ansoff matrix to analyze the growth of BMW’s product portfolio.

Company Background BMW

BMW (www. bmw.com) continue maintaining their strong position as one of world’s leader in premium vehicle market besides Daimler-Chrysler, Lexus, and many others. The company established in March 7, 1916 when Bayerische Flugzeug-Werke (BFW) founded. One year later, BFW was renamed to Bayerische Motoren Werke GmbH (BMW) that focused on producing cars and military aircraft at that time. Within several decades in the 20th century, the company performed several acquisitions on Rover and MINI, to name a few. However, the intense competition in automobile industry that becomes more segmented has driven BMW to focus on few brands.

Under such circumstances, BMW decided to sell Rover Group in 2000 but still retaining MINI brands in the BMW Group. Therefore, BMW group (www.bmwgroup.com) now has three major brands: BMW, MINI, and Rolls-Royce Motor Cars. The three segments are all in premium cars segment, thus lessen the company’s effort in building brand awareness for their products. The Automobile industry is one of the most competitive global industries in the world. This is because automobile companies are generally multinational in nature because they have the need to achieve economies of scale in their production.

The automobile industry represents significant portion of GDP in US and Europe. They are considered of significant importance because their existence enables other industries to work. Most automobile markets bring possess significant influence whether in their domestic as well as global markets. Moreover, there is an indication that commencing the end of the 20th century, most of the markets in modern countries are saturated and the new trend of the industry is to find new and developing markets where they can deploy their products. Similarly, automobile manufacturers are tired of facing the cutthroat competition in their markets.

The situation drives them to expand their services into Asia-Pacific regions, South East Asia and other developing regions. This strategy becomes the latest trend within the global automobile industry. This generates new trends in automobile designs and their tendencies. Cheaper and fuel-efficient cars are the design of this decade. Concerning the many facets of automobile industry, below is several business analysis tools that assess how the market behave, especially relates to the development of premium markets where BMW serves.

Strategic group: BCG Matrix

As mentioned previously, BMW (Bayerische Motoren Werke) maintains three major brands in their portfolio. Each of them has somewhat similar markets, the premium cars, but the company further determines particular markets that each of the product portfolio serve. This strategy is carried out to avoid unnecessary cannibalism among their products. In order to analyze the performance of each product portfolio in BMW group, we can use BCG Matrix. The matrix is named after the founder, Boston Consulting Group, a well-known global business consulting firm.

The basic philosophy of Boston Consulting Group (BCG) Matrix is to assess various Strategic Business Units (SBUs) in a company portfolio. By definition, an SBU is a business unit in a company that has its own missions and objectives. It could be departments, divisions, or subsidiaries. In case of BMW group, the SBUs can be BMW product lines such as BMW 3, 5, 7 series, MINI, and Rolls-Royce Motor Cars. The BCG Growth-Share matrix composes of four quadrants that each describe BMW product lines in relation to market share and market growth rate.

The BCG matrix helps BMW to understand each of their product’s life cycle and position in the market better by charting each product in one of the four quadrants. The upper left quadrants in the matrix are stars. Stars are business units or product lines within BMW Group that undergo high growth or have strong position in the market. In other words, stars are business units that have large market shares in a fast growing industry (‘Boston Consulting Box’, 2005). The characteristics of stars are they generate cash and thus revenue for a company.

However, as the market for the products grows rapidly, they require extensive investment to maintain their lead. If the strategy is successful, a star will soon become a cash cow when its industry matures. In case of BMW, the stars are their USA division since the marker experience fast growth. In 2003 alone, the USA division records a history since it become the Group’s strongest market with 8. 0% growth or represents the sales of 277,037 units in the 2003. In terms of product line, the stars are BMW 7 series as they continue achieving a growing pattern of sales.

In 2003, the sales of BMW 7 series rose 8. 2% compared to previous year. Another star is BMW X5 that record a 4. 6% of growth or represents the sales of 105,554 units. The second quadrant in the lower left is cash cows. It is similar to main sources of revenues/income for a company where it represents a product line(s) that continue exhibiting low-growth businesses or they have a relatively high market share (‘Boston Consulting Box’, 2005). Cash Cow is a business unit that has a large market share in a mature, slow-growing industry.

Due to the slowing down of market growth, cash cows only need little investment and generate cash that can be used to invest in other business units. In BMW case, the cash cow is the home market, Germany. In the home country, BMW experiences declining trend in which in 2003, it recorded -0. 9% of growth compared to the previous year. Meanwhile, concerning the product lines, the cash cows are BMW 3 series and 5 series. The BMW 3 series, for example, have many models that all of them continue showing declining sales volume.

The sales of BMW 3 series Limousine, for instances, decline by 5. 9% compared to 2002. Similarly, the sales of BMW 5 series also plummets by -23. 5% compared to the previous year sales volume. In the upper right of the matrix lie question marks. It represents BMW product line(s) that exhibit low market share but operate in higher growth markets (‘Boston Consulting Box’, 2005).

These business units require resources to grow market share, but whether they will succeed and become stars is unknown or potentially less likely. The last quadrant is Dogs. They are BMW’s products lines that have low relative market share in unattractive, low-growth markets (‘Boston Consulting Box’, 2005).

It means that dog is a business unit that has a small market shares in a matured industry. A dog may not require substantial cash, but it ties up capital that could better be deployed elsewhere. If a dog has no other strategic purpose, it had better to liquidate the product lines since the product lines have little opportunities to gain market share. Also read Axiata strategic management

JOHN DEIGHTON JILL AVERY JEFFREY FEAR op yo Porsche: The Cayenne Launch In March 2003 the Porsche brand faced a challenge without precedent in 55 years. Since the e launch of the Porsche 356 in 1948, the brand had stood for expensive, high-performance sports cars. Its designs, varying little over the decades, formed and then came to reflect the notion of a classic n sports car. It was a connoisseur’s racing vehicle, engineered for speed and maneuverability. But it was also a rebel’s car; the car James Dean died in and that Tom Cruise ditched in the motion picture Risky Business.

Always and everywhere, Porsches were sports cars. tC 2003 marked the end of this single-minded focus. In March of that year, it launched a sports utility vehicle (SUV), the Porsche Cayenne. The extension of the brand to a new product category posed many challenges. Looking ahead, the company had to think about how to position the Cayenne while protecting the Porsche parent brand. How much and in what ways would the Cayenne change Porsche’s image and brand identity? The company also had to decide what to do about the on oing consumer-to-consumer ng conversations in online Porsche brand communities.

Some argued that online brand communities were an important source of consumer research. Others argued that the consumers who participated in the online conversations held views more extreme than the average consumer. Were they of any value in deciphering the market’s renegotiation of Porsche’s brand meaning? n No The Legacya Do Ferdinand Porsche was born on September 3, 1875 in Bohemia, part of the former AustroHungarian Empire. After a brief stint as Daimler-Benz’s technical director, he left the company, which did not want to build small, fast cars for the public.

Unemployed at 55, Porsche started his own design firm. The staff grew to include some of the luminaries of German automotive engineering, Porsche’s son, Ferdinand Anton Ernst “Ferry” Porsche, his son-in-law, Anton Piech, whose son became chairman of Volkswagen, and a handful of key en ineers. Ferr became head of ng ry research and development. a This section draws from Jeffrey R. Fear and Carin-Isabel Knoop, “Dr. Ing. h. c. F. Porsche AG” (A) and (B), HBS Nos. 706-018 and 706-019 (Harvard Business School Publishing, 2006). _______________________________________________________________________________________________________________ HBS Professor John Deighton, Jill Avery (Simmons School of Management), and Jeffrey Fear (University of Redlands) prepared this case. This h case was developed from published sources. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2011 President and Fellows of Harvard College.

To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www. hbsp. harvard. edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. Porsche: The Cayenne Launch rP os t 511-068

In 1934, Adolf Hitler asked Porsche to develop a family car that was both cheap and reliable—thus the “people’s car” or Volkswagen, was born. Its design was intended to evoke the German infantry helmet and honor National Socialist ideals. During wartime, Porsche focused on tank design, including the formidable “Tiger. ” In June 1948, the company launched the 356, the first automobile to carry the Porsche brand mark. A Volkswagen factory manufactured the 356b, with its tubular spaceframe chassis, aluminum body, and rear-mounted four-cylinder engine, until Porsche opened its own production facility in Stuttgart-Zuffenhausen in 1950. See Exhibit 1 for company milestones. op yo In 1953, Porsche produced its first racing car, the 550. In 1964 came the iconic 911, also a racing car. Designed by Ferry’s eldest son, the rear-engine vehicle became a twentieth-century design landmark. In the 1970s, Porsche and Volkswagen collaborated on launching the 914. In 1972, Porsche became a joint stock company (Porsche AG) with the Porsche and Piech families on the board. Porsche AG was nearly derailed by the U. S. stock market crash in 1987.

Sales volume collapsed from a peak of 50,000 cars in 1986 to 14,000 in 1993. 2 At the time Ferry Porsche commented: “I certainly have not given away my family name to sell off and cash out the company to the highest offer. This philosophy might hold true for Americans, but not for us. ”3 tC In 1991, Porsche launched the first of several cars at price points lower than traditionally associated with the Porsche brand. The 911 RS America was a no-frills version of the long-running rear-engine 911 model; priced at $54,000, it ran about $10,000 under traditional Porsche prices.

This was followed by the entry-level 968 at about $40,000, close to the $37,000 Nissan 300ZX Turbo or the $33,000 Mazda RX-7. 4 Design and production changes continued in 1992 with the introduction of a revamped, water-cooled 911, the 996. The decision to break with the past and replace the traditional air-cooled engine with a water-cooled engine was seen as a sacrilege to many Porsche purists. No Wendelin Wiedeking became Porsche’s executive director (CEO) in 1992. In the mid-1990s he steered Porsche through one of its most noteworthy turnarounds.

He staved off bankruptcy by cutting costs, paring the product line to two models, bringing Japanese manufacturing processes to Porsche’s plants, and expanding into 70 global markets—30 more than in 1993. 5 Do In 1996, Porsche launched the $40,000 Boxster, a zippy two-seater with an “entry-level” price. In departures from tradition, the Boxster shared 40% of its parts with the 9966 and was assembled by a third party contract manufacturer, Valmet Automotive, in Finland, rather than at b Porsche 356 Photograph Courtesy of Stephen Hanafin, http://www. flickr. om/photos/shanafin/432562761/, Porsche Racing Photograph Courtesy of James Emery, http://www. flickr. com/photos/emeryjl/4620731098/, Porsche 911 Photograph Courtesy of Collector Car Ads, http://www. flickr. com/photos/48718277@N06/4586382193/, Porsche 996 Photograph Courtesy of lacomj, http://www. flickr. com/photos/40137058@N07/3813925902/, Porsche Boxster Photograph Courtesy of The Car Spy, http://www. flickr. com/photos/thecarspy/2641636681/, Porsche Cayenne Photograph Courtesy of The Car Spy, http://www. flickr. com/photos/thecarspy/47216338591. This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. 511-068 rP os t Porsche: The Cayenne Launch Porsche’s legendary Zuffenhausen plant. “We had no choice,” said Wiedeking, stressing that on-site German assemblers and engineers ensured that the Boxsters assembled in Finland were “100% Porsche”7 and just as good as those made in Germany. 8 The SUV Betc op yo In 1998, Porsche announced its plans to develop an SUV.

By then, the 50year old firm was back on solid financial footing and its stock price was outrunning the national DAX index by 180% (see Exhibits 2 and 3 for stock and financial information). The Porsche Cayenne SUV would be the company’s third model series, joining the 911 and Boxster sports cars, and the first developed and launched entirely under Wiedeking’s watch. He wanted the vehicle to combine traditional Porsche styling and performance with off-road driving capability and a spacious interior, placing more emphasis on “sport” than “utility. The new car had to retain the brand’s style and panache while accommodating family, outdoor, and transport activities. Wiedeking felt that SUVs were “nearer to the sports car business than sedans. We also looked at minivans, but we do not want an eighth ‘me-too’ product. It has to be a real Porsche in terms of chassis, performance, and design”—Porsche’s core strengths. 9 The average Porsche customer already owned three cars: an SUV, a sedan, and a Porsche sports car. 10 Wiedeking saw an opportunity: “We know from our surveys that a lot of our customers are waiting for a Porsche SUV.

Then there will be no doubt that customers can proudly park their SUV next to a Mercedes S-Class and other cars like that. ”11 tC Porsche wanted to leverage its premium brand to enter a hot, new market to capture incremental growth and to diversify the business to hedge against potential declines in the sports car segment due to economic fluctuations. The company observed other car manufacturers like BMW and MercedesBenz successfully leveraging their brands across a wide range of product categories and wanted to do the same.

SUV optimists argued that Porsche had creatively found a way to diversify its aging model range in an oversaturated market. They estimated a breakeven number of 10,000 units priced between DM 100,000 and DM 120,000. By building 20,000 SUVs a year, Porsche could boost its total sales by 50%. 12 The SUV Market Do No In the late 1980s, the Ford Explorer legitimized the SUV as the quintessential American family vehicle. The SUV’s popularity with U. S. drivers was attributed to the nation’s historic affinity for larger cars and trucks that could serve for both work and personal use.

This new breed of vehicle was viewed as innately “American. ” Its rugged and powerful appearance, and the promise to combine the carrying capacity of station wagons with the off-road capability of pick-ups, offered an alternative to old fashioned family suburban and rural utility vehicles. The sporty and aggressive design appealed even to those who would never dream of taking a car into rough terrain, namely preppy, youthful professionals, including working women and stay-at-home mothers (colloquially known as “soccer moms”) who preferred not to be associated with station wagons and minivans.

After Ford’s successful launch of the Explorer, other leading manufacturers both in the U. S. and abroad (Japan, Germany) followed with their own models. By the late 1990s, the SUV market was deemed intensely competitive,13 as many manufacturers strove to offer SUVs with car-like agility, the space of a mini-van, and the utility options of a sport vehicle. Fortunately for owners of such large c This section draws from Jeffrey R. Fear and Carin-Isabel Knoop, “Dr. Ing. h. c. F. Porsche AG” (A) and (B). 3 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013.

Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. Porsche: The Cayenne Launch rP os t 511-068 cars (SUVs weighed 4,000 to 6,000 pounds; cars 2,000 to 4,000 pounds), gasoline prices in the U. S. remained very low by global standards. In 1998, light trucks, including SUVs, captured 51% of the new U. S. vehicle market, double the share they had 20 years before, propelled by a strong economy, demand for roominess (some even had 10 cupholders) and the perception of enhanced driver visibility and safety. op yo

Porsche’s SUV would join an already crowded market, estimated at about two million units in early 1998. Still, the category ranged from pick-ups, light trucks, and small jeeps to high-end entries such as the Range Rover—the only SUV with a base price over DM 100,000. 14 A successful high-end, high-performance Porsche SUV could trigger me-too followers within two to three years, thanks to the compression of development intervals within the automobile industry. Already, Mercedes Benz was considering an M-Class SUV vehicle with a 300-plus horsepower engine. BMW was also rumored to be interested in developing what would later become the X5.

Other European, Japanese, and American brands were looking into developing luxury SUVs, including Lexus, Infiniti, Audi, Lincoln and Cadillac. The potential for such new entrants threatened the sustainability of Porsche’s sales forecasts of 20,000 SUVs each year. 15 By 1996, the premium SUV market was proving its success. Sales of the 1996 Mercedes off-roader M-Class demonstrated a demand for luxury SUVs (see Exhibit 4 for SUV market information). Luxury/crossover SUVs targeted the high-end market with top quality interior amenities such as stylish materials (wood and leather) and lowered suspensions.

Sales of high-end SUVs—those costing between $43,000 and $49,000—were expected to reach 300,000 in 1998 (up from 75,000 in 1995)16. Exhibit 5 shows SUV sales forecasts by region. Cadillac was expected to launch an SUV in 1999, and Ford was testing a 19-foot “crew wagon” with a V10 engine. tC Competition in luxury SUVs was intensified by major Asian players. Lexus, Toyota’s luxury auto division, saw its small LX 450 SUV grow to nearly 30% of all U. S. Lexus sales in just a few years. Acura (Honda), Infiniti (Nissan), and Mitsubishi already had luxury offerings in the U. S. arket. Nissan’s Xterra SUV was planned for 2000. 17 Launching a luxury SUV was an expensive bet for Porsche. R&D alone amounted to €300 million, and capital expenditures for new plant and equipment tripled between 2000 and 2002. 18 No Wiedeking was confident in his SUV strategy: “Our new sport utility vehicle will not only correspond in full with Porsche’s high technical and visual standards, but will also pave the way for future growth potential in the sales, turnover, and earnings areas” he promised. 19 An SUV would give Porsche “a new dimension in both profit and revenues. 20 Fred Schwab, President of Porsche Cars North America explained, “What is going to distinguish us from them [Porsche’s competitors] is that they are making practical vehicles that are good off-road, but are essentially there to get your groceries and take a ride on Sundays. Porsche is in the business of making fun cars. The Cayenne will go faster, handle better and you will be more comfortable in it. It won’t swing and sway… It will go from zero-to-sixty in 5. 4 seconds. This SUV will be fun to drive. It will be an SUV sports-car lovers will love. ”21 Do By 2002, SUVs were under attack in the U.

S. by cultural critics. Starting in 1997, Keith Bradsher, a prominent reporter for the New York Times, spent four years writing scathing critiques of SUVs that culminated in a book launched in 2002 entitled “High and Mighty: The Dangerous Rise of the SUV. ” In his articles and book, Bradsher debunked the widely held notion that SUVs were safer than cars and held up SUVs as a prime example of how American consumerism was contributing to global warming. Some began to question the long-term attractiveness of the SUV segment, predicting a move towards smaller, more fuel-efficient cars. 2 4 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. 511-068 rP os t Porsche: The Cayenne Launch Bradsher also painted an unflattering portrait of SUV buyers, “Who has been buying SUVs since automakers turned them into family vehicles? They tend to be people who are insecure and vain. They are frequently nervous about their marriages and uncomfortable about parenthood. They often lack confidence in their driving skills.

Above all, they are apt to be self-centered and self-absorbed, with little interest in their neighbors or communities. ”23 Bradsher criticized SUV owners for buying SUVs with functionality that they didn’t need, citing auto-industry surveys that showed that less than one in 100 SUV owners took their SUVs off-road. Bradsher connected the SUV to “soccer moms” who were rejecting minivans and opting into SUVs as their vehicle of choice. Exhibit 6 shows consumers’ perceptions of SUV drivers and Porsche drivers. Listening to Consumers in Online Communities The Rennlist Community op o Web communities provided an opportunity to observe how Porsche owners reacted to the announcements and actions of the company in the months leading up to and following the Cayenne launch. The launch lit up the numerous and diverse online brand communities devoted to Porsche, as enthusiasts around the world came together to talk about this cataclysmic event in the life of their brand in chat rooms, web discussion forums, and blogs. One such community was Rennlist. tC Rennlist, www. Rennlist. com, was an international online community of Porsche enthusiasts founded in 1998.

At the time of the Cayenne launch it had 36,000 active posters of comments and a lurker population of 200,000, a silent audience who read but did not participate in the discussions. Rennlist provided a virtual communal gathering place for Porsche enthusiasts, as highlighted in the site’s mission statement: “[Our members] look to Rennlist as their community, their international club—and their ‘daily dose’ of what we are all bonded by—an uncommon sense of loyalty to the Porsche marque as well as to other Rennlist members throughout the world. Rennlist was independently owned and run by Porsche enthusiasts and was not affiliated with Porsche, although some local Porsche dealerships enjoyed commercial sponsorship through advertising banners on the site. No One of the most used features of Rennlist was its web forums, online discussion boards where members engaged in ongoing dialogues with each other by first initiating topics of conversation with a seed post, and then listening and responding to others’ comments in asynchronous conversations. All posts were public and were archived on the website for posterity.

In the words of a Rennlist member, the web forums simulated a virtual fraternity: “I haven’t had as much fun talking about cars in many years, than I’ve had on these forums. Many times it’s like sitting around a big roundtable with everyone having beers and telling war stories & giving each other help. It’s fraternity; and I appreciate it. ” While anyone who joined could post to Rennlist’s discussion forums, the majority of posters claimed to own at least one Porsche vehicle. Most posters used a virtual signature which contained a list of their Porsche cars.

The Porsche Brand as an Identity Marker Do Rennlist posts painted a picture of Porsche as an ego-expressive brand. While postings seldom addressed the issue directly, a sense of Porsche as a masculine identity marker was palpable in the kinds of topics discussed: the focus on performance metrics, engineering standards, and admiration for Porsche’s manufacturing and racing prowess. Occasionally, however, posts like this appeared: There’s super hot women everywhere, ignoring us…tons of hotties, no love (and in some cases a bit of attitude and contempt) from any of them… ntil we walk outside and head to my 996. When it is apparent as to which car we are going to, I hear, ‘Mr. bald guy’ (I have 5 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. Porsche: The Cayenne Launch rP os t 511-068 no hair) ‘Where are you going? Come back’ from a group of about 10 absolutely drop dead beautiful, tightly clothed, amazingly sexy women on the patio. (Rennlist post)

Porsche as a socio-economic status marker was seldom expressed directly, and often expressly denied: I’d like people to see me in my Porsches and think ‘there goes a person who really appreciates his sports cars,’ not ‘there goes another yuppie with more money than brains. ’ (Rennlist post) Initial Response of Porsche Enthusiasts to the Prospect of the Cayenne Launch op yo Hostility to the launch of the SUV was intense. A scan of Rennlist showed conversations about the Cayenne reaching a fever pitch as the launch approached.

Exhibit 7 shows the number and valence of posts over time. In the New York Times, the founder of Porsche Pete’s Boxster Board (another Porsche online brand community), claimed “No other Porsche – past, present, or future – comes close to generating the kind of [on-line conversation] response that the Cayenne has. ”24 Some posts suggested that a source of pride was about to become a source of shame. It makes me embarrassed of owning a Porsche…kinda like that relative you don’t want to admit sharing the same bloodline.

Ugh! (Rennlist post) I am actually ashamed of Porsche stopping to be a pure sports car company…A SUV (SlowUgly-Vehicle)!! The ANTI-SPORT CAR, a heavy, slow, clumsy, and roll-over happy SUV will share the same emblem on its hood than our sportscars. Sad times for Porsche. (Rennlist post) tC Some Porsche owners posted that they were leaving the brand for rivals Ferrari, Aston Martin, or Maserati, after claiming that Porsche had “sold out. ” Others collectively mourned the loss of the brand they knew and loved.

As key design, engineering, manufacturing, and marketing decisions were released by Porsche, consumers used Rennlist as a place to vent displeasure. There just aint nothing Porsche in a SUV. (Rennlist post) No I have been exposed to Porsches since the age of 10. I have seen all the models come and go, but the Cayenne is the first non-sports car to come up and I really don’t like this direction at all. Porsche has always been synonymous with ‘sports car’ and now somebody can say ‘I have a Porsche…’ and mean a Cayenne! I could not imagine a Ferrari SUV for example! (Rennlist post)

Do Just as they had done with earlier models, enthusiasts criticized design and engineering attributes of the SUV. The Cayenne’s front-mounted, water-cooled engine offended “real Porsche” purists. Early photographs of the Cayenne were met with ridicule in the online community, and sparked many conversations about how ugly the Cayenne was and how it resembled the Hyundai Santa Fe. Some argued that the Cayenne’s design was feminine and lacked the manly stance of competitors like the Hummer and the Jeep. Porsche enthusiasts were also dismayed that the Cayenne included unnecessary” amenities such as cupholders and a tiptronic automatic transmission, which suggested that the Cayenne was designed for drivers who valued luxury over driving performance. These features confirmed that the Cayenne was not designed as a driver’s car, but rather, that it was designed to appeal to what Porsche owners called “suburban, yuppie, soccer moms. ” In online conversations, Porsche owners repeatedly called the Cayenne a car for “poseurs,” people who did not understand the history, 6 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013.

Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. 511-068 rP os t Porsche: The Cayenne Launch heritage, and performance of a Porsche, but who bought the brand merely for its status or imageappeal. 20 years ago, when you said you had a Porsche, people looked at you with envy. 10 years ago, when you said you had a Porsche, people looked at you with envy. Today, when you say you have a Porsche, people will reply: oh, those trucks? I got one of those too. (Rennlist post) I just felt really sad.

Now ‘soccer moms’ can drive their kids around in a Porsche. Pretty sad. Look at the level that Porsche has been brought down to. BIG MISTAKE (Rennlist post) op yo And the people who will use it!!! Suzy-Housewife, as well as Dorky Dick who’s been beaten up through high school finally bought his first – ahem, PORSCHE got the A-OK from the wife – ‘so long it’s practical dear’!!!!!!!! (Rennlist post) The Cayenne will be bought as a car for the poser wife to take the kids to school, the only time it will go off road will be when it goes up on the curb.

Come on how many real rear engined Porsche enthusiasts will buy one. (Rennlist post) Product Development and Manufacturing Criticism No tC Porsche’s product development and manufacturing decisions figured prominently in the “real Porsche” debate and became fodder for arguments against the Cayenne. By spring 1998, Porsche was negotiating with Volkswagen to jointly develop and manufacture SUVs. Under the proposed arrangement, Porsche would undertake the research and development of the SUV and Volkswagen would invest about $657 million in the project. 5 The new SUVs would share close to 65% of their parts and modules—the same chassis and some technologies—but showcase different exterior styling, engines, and chassis tuning. Porsche would develop the two models as well as the common platform. VW would be responsible for major aspects of production, with final Cayenne assembly to be conducted by Porsche. 26 Partnering with VW was “an ingenious coup,” an observer noted: “Half of Porsche’s profits come from the Cayenne. That model was developed in collaboration with VW and was built in VW plants. The car is 90 percent VW and 10 percent Porsche. 27 Skeptics worried about paying Porsche prices for a VW, but were assured that the R&D of the new model was purely Porsche’s domain, while its partner would oversee only the production of some major components, excluding the engine. 28 But as one financial analyst opined, the Cayenne would “push Porsche’s brand credibility to the absolute limit. ”29 Porsche’s partnership with Volkswagen caused consternation among Porsche enthusiasts. Earlier Porsche cars produced with Volkswagen, such as the 914 and 924, had been criticized by enthusiasts as “faux” Porsche vehicles. Many claimed that the Cayenne was a “Porsche-ized VW” built with too much

Volkswagen content. When Porsche launched a V6 model of the Cayenne which contained a Volkswagen engine, instead of the Porsche engines featured in the V8 and Turbo models initially launched, Porsche consumers cried heresy. When some independent testers chose the Volkswagen Touareg over the Porsche Cayenne in performance tests, consumers cemented their skepticism and claimed that, suddenly, “there was a substitute” for a Porsche, and it was a Volkswagen Touareg. Do Porsche and VW do not seem to be in bed on this project, they are in bed on this project. They are both exactly the same basic vehicle.

VW gave Porsche the chassis and said go and design a SUV if you want to be our partner on this…So the VW Toureg and Porsche Cayenne are both Porsche designed on a VW chassis and when they are pulled off the line to go up to Leipzig you will not be able to tell the difference. Only when the Cayenne leaves Leipzig will it look any different. When it has been Porscherised with engine and cosmetics. (Rennlist post) 7 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. Porsche: The Cayenne Launch P os t 511-068 Sorry, the Cayenne is a Porsche… While some of the design is shared with VW and some components built @ VW factories, Quality Control was still supervised by Porsche… A good analogy to your argument would be having Emeril Lagasse prepare you a dish at his restaurant and then prepare the same dish at your home. Still the same dish, just produced elsewhere… (Rennlist post) Enthusiasts were distressed to find that the Cayenne had a Japanese transmission. They saw this as a further decline in build quality that came when Porsche switched to Japanese manufacturing processes and away from its handcrafted heritage.

In their online conversations, enthusiasts yearned for the days when their Porsche cars were Porsche designed, constructed from German-made parts, and manually assembled in Germany by racing engineers. op yo I was reading in Panorama last night that the Cayenne has a 6 speed tip tranny which is produced in Japan. Is this true? Seems like Porsche is just outsourcing as much as possible to keep profits high. Both my cars have Japanese parts (A/C), but nothing so substantial as a transmission. What’s next, engines from the Far East? I’m less and less impressed every day I read more. Rennlist post) IMHO a German car with German Ing should have German parts, especially for something as major as the tranny. Isn’t that part of the identity of the brand? oops.. forgot, Porsche doesn’t value the brand identity that was built over the last 50 years anymore. The old professor [Ferry Porsche] dies and look what happens… an SUV. (Rennlist post) No tC Personally the thought of purchasing a Porsche with some of its major components outsourced to the Far East is analogous to buying what you think is a fine Swiss time piece that turns out to have a cheap(er) Japanese movement inside.

To me that would be unacceptable. Yes, both work, and work well, but the reason you bought the Swiss one in the first place was to get the hand crafted Swiss quality and workmanship that dates back hundreds of years…I certainly hope this will not be the future for Porsche cars. Those who know the real definition of build quality know exactly what I am talking about. Most Japanese stuff isn’t even worth rebuilding, because it is designed to be replaced when it is done. The old German design and build philosophy was much different than the modern Japanese design (if there is such a thing) and build philosophy.

Porsche cars used to be about hand crafted high quality performance, but all that seems to have gone out the window these days just to make more profits. (Rennlist post) Wiedeking defended his design and manufacturing decisions, claiming that Porsche focused on its core competencies: engine manufacturing, R;D, body shell work, assembly, quality control, and “highly professional” distribution, while relying on “extended work benches” at Valmet, VW, and its network of suppliers. It reduced its in-house production depth to one of the lowest in the industry, shared some components with VW such as electronics, and split R;D costs with VW. 0 Do Finally, Porsche’s decision to build the Cayenne in Leipzig, in the former East Germany, put into question whether the Cayenne could be a “real Porsche. ” Rennlist members who visited the Leipzig plant brought back bad news. The Leipzig plant was little more than a final assembler, with most of the assembly work being done by automated machines. To enthusiasts, the Cayenne’s assembly in Leipzig put into question its “Made in Germany” moniker. Leipzig did not carry the German manufacturing heritage of Zuffenhausen; its location in East Germany was associated with the Communist era.

Nice try, but aren’t our Cs actually built out in some Skoda plant in Eastern Europe and then final assembled in Leipzig? This may explain some of the initial build quality problems. 8 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. 511-068 rP os t Porsche: The Cayenne Launch I’ve read that the Eastern European manufacturing workforce has some of the attitudinal and work ethic habits of 1970s era Detroit car builders. God forbid. (Rennlist post)

Here is a firsthand report of someone who visited the Leipzig factory on March 19, 2004: What amazed me most was how small it was. They really were just integrators and assemblers there. Much of the car (the upper shell and interior) comes in from Bratislava, and the power plant from Zuffenhausen. The tranny from Asia and it is all put together and “married” with 18 BOLTS! That’s it! Funny. After it is put together, they test drive EACH ONE on the track. I found that to be very interesting quality control, and also a testament to the difference between a VW and a Porsche. Clearly, the Cayenne is not built in Leipzig.

Leipzig is where the final assembly and final QC are done. I’m sure that the quality control of Porsche is much better than that of VW. But it is not a car manufacturing plant. (Rennlist post) op yo Having toured the factory in Leipzig two weeks ago, I can assure you that the Cayenne final assembly is mostly by machine, NOT by hand. The level of automation is amazing. It takes 170 production workers per day to produce 130 Cayennes per day. It takes 80 production workers per day to produce 2 Carrera GT’s per day! (Rennlist post) And on their website they are boasting about how it’s Made in Germany and what that means.

Maybe the thing should say kinda-put-together in Germany. (Rennlist post) tC Wiedeking defended his decision to assemble in East Germany: “The Leipzig location brings our firm advantages, otherwise we would have never built the plant there. But we also create jobs in an economically weak region. ”31 However, a Porsche spokesperson confirmed the importance of manufacturing location to Porsche enthusiasts, “[Location] is not an uncritical issue. People think that as a car comes off the line at Zuffenhausen, Ferdinand Porsche comes by and caresses the car with his hand, and that makes it an official Porsche.

Of course, Ferdinand Porsche hasn’t been doing that for some time. ”32 Hostility Toward Cayenne Buyers In December 2002, European dealers began to sell the Cayenne, and in March 2003 it was on sale in the United States. Postings by some Porsche owners took on a threatening tone. Try owning a Cayenne and see how you’re treated by other Porsche owners. (Rennlist post) No Oh and just so you guys know…you are the laughing stock of all other Porsche owners. (Rennlist post) One thing is for sure: the SUV is NOT my brother! I always accepted the other models in the family – the 928s, 924s, Boxsters, etc.

They were all sports cars. But the SUV: never! (Rennlist post) Others echoed the earlier concern that the new car would shame them. Do People will buy these Porsche S. U. V. ’s because they’re a fad, and they’ll embarrass the real Porsche crowd. They’re not going to know how to drive and they’ll do stupid things. It’s scary to think about. (Rennlist post) There was a wish to purify the community by exclusion or ostracism. On the road, Porsche owners refused to extend their fraternal greeting to Cayenne owners, limiting it to sports car owners only.

They tried to block Cayenne owners from joining local Porsche clubs and refused to allow them to race alongside sports cars in club-sponsored racing event. 9 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. Porsche: The Cayenne Launch rP os t 511-068 So how about the Cayenne? Seems kinda funny flashing lights at an SUV even if it has a Porsche badge…Don’t think I can… (Rennlist post) I’m with you guys on the Cayennes. I don’t wave to drivers of re-badged VW Touregs either. Rennlist post) Please don’t flash your lights or honk your horns at me. You will only see my longest finger back at you. (Rennlist post) My point it that all SUV owners should take their toys and play in their playground. NOT in mine. Find other SUV’s go to the track and have fun together. (Rennlist post) op yo There’s still one problem: A Cayenne, driven by the owner of other Porsche cars may be able to perform miracles that would embarrass all competitors in an autocross situation but the scary thought is that PCNA [Porsche Cars North America] are betting that many Cayenne owners will not be previous Porsche drivers.

Having these people who could be unaccustomed to a vehicle of such power, may very well overstep their abilities in trying to keep up (or prove themselves) to the rest of us and cause some real damage. Yes, I’m biased against the Cayenne. Yes, I think the whole idea of a Porsche SUV is a mistake. (Rennlist post) The newcomers would not understand the values of the community they sought to join. They have little of no feeling of belonging, no understanding of the lineage of Porsches and where their cars were derived from. They don’t care about that, most are probably just poseurs. Rennlist post) tC It’ll be piloted by folks who woulda bought the Mercedes Benz/Range Rover if there weren’t five of them in the subdivision already, who wouldn’t consider a Lexus because it’s ‘jap crap’ and who think BMW/VW is beneath them. They’re not enthusiasts, they’re consumers. They won’t know or care that old time P-snobs will shun them. (Rennlist post) Cayenne Buyers Respond Some Cayenne buyers sought to broaden the Porsche community to include themselves as members of good standing, or at least to appeal to the better natures of the old guard.

No This sense of kinship is getting lost due to lines being drawn between one group to another. (Rennlist post) I thought being a Porsche owner was like joining some sort of fraternity of something… but it’s more like [Boxster, Cayenne] owners are the red-headed step child of some dysfunctional Porsche family. Did all entry level Porsche owner’s get this much crap when they bought their new Porsches? (Rennlist post) Do So am I to understand that you are allowed to rail against and hurl invective and others are not? Look. You like your car, I like mine.

I’m not going to bash yours, and I go out of my way to salute yours. Why do you continue to bash my choices? (Rennlist post) Please start being nicer to each other. This is not the correct time to start having a go at each others throats. (Rennlist post from a site moderator) Sadly, the ranks of Porsche owners seems to be populated by those into model specific devisiveness and comparison pissing matches. Where once a camaraderie of enthusiasm existed, now lies a state of SUV owners looking for the next status symbol and those remaining 10

This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. 511-068 rP os t Porsche: The Cayenne Launch few who love the maker of their dream cars fight with one another over which model is best and how effeminate or inadequate another model is compared to theirs. (Rennlist post) Spillover into the Offline World While the “real Porsche” debates raged on Rennlist, Porsche enthusiasts began to take their criticisms into the offline world.

Consumer-generated-advertising spoofing the Cayenne made its way around the Internet (see www. flickr. com/photos/alecmcint/447172 for a sample). Consumers circulated bumper stickers, license plate frames, and t-shirts for the Cayenne with slogans like “My other car is a REAL Porsche. ” Cayenne’s advertising featuring headlines such as “Only one sport utility vehicle has bloodlines like these” and “Another twisted branch on the family tree” set off online rants. An article in Internet magazine Autoextremist captured the mood: op yo

Porsche’s advertising campaign for the new Porsche Cayenne is the latest attempt to link its ungainly SUV to its greatest sports car and traditions, and in doing so it achieves a new low for the once-bulletproof brand by at once dismissing its own legacy and insulting the intelligence of every auto enthusiast—Porsche, or otherwise—in the process…A stretch that only delusional Porsche marketers could possibly attempt—and a flat-out insult to every great Porsche sports car that has come before it…To link it [the Cayenne] in any way to some of motordom’s most historic and legendary machines is an outrage. 3 tC What was said and done on Rennlist traveled beyond the online community. Compelling posts were often copied and pasted to other online communities and to personal and professional blogs. Press reporters used online brand communities like Rennlist to find consumers who were willing to talk about the brand in the press. Porsche owners quoted in news stories about the launch were longstanding, active online brand community members. The mainstream press began to reflect the online zeitgeist of the Porsche enthusiasts.

Autoextremist warned that “[The SUV] threatens to destroy the very soul of the company,”34 while the Los Angeles Times announced that “Snowballs are rolling uphill in Hades. Porsche—shudder—will build an SUV. ” 35 Porsche probably has the purest DNA of any sportscar maker. I don’t care how good an allwheel-drive wagon is, it’s not a sportscar. If you add a car that does not fit with your brand’s image, you must reduce the power of that image. (Porsche consumer quoted in Herald-Sun)36 No Everything about the Cayenne is completely the opposite of what Porsche is and does.

It will be the death of a tradition. (Porsche consumer quoted in the New York Times)37 It’s blasphemy…I’m not hot on the idea at all. I’ve lived with Porsches all my life and the marquee has always been Porsche sports cars. To bring out an SUV doesn’t sit well with me. (Porsche consumer quoted in the Los Angeles Times)38 Any truck made by Porsche deserves to be a failure. It’s a disgrace to the Porsche name. (Porsche consumer quoted in Autoweek)39 Do Cayenne Owners Become Assertive Cayenne owners began to speak in support of their vehicles.

They deflected soccer mom, yuppie, and poseur stereotypes, claiming to be fellow Porsche enthusiasts. They told stories about how they would take their SUVs off-road, or use them to tow their Porsche race cars or boats, or to access adventure sports like skiing, hiking, hunting, and fishing. They bragged about the performance of their Cayennes and wrote of beating other sports cars, including the Porsche Boxster, off of the line at traffic lights. They described positive reactions they received from others. They referred to their 11

This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. Porsche: The Cayenne Launch rP os t 511-068 SUVs as “sports cars” and circulated a revisionist history of Porsche in which the Cayenne is a logical descendant of Porsche classics. They reminded readers that Ferry Porsche was the driving force behind the Cayenne: By now, I gotta say the C [Cayenne] is a winner. It’s not really even an SUV in the traditional sense.

It’s primary focus, like all porsches is performance, and with a straight face, I can tell you it’s pretty much a sports car with some suv traits. (Rennlist post) op yo You may not need a vehicle that can carry kids, go to the snow, haul a few things and is fun to drive, but that doesn’t mean no one does. The Cayenne may not match the 996 (almost nothing else does) but if it outhandles and outbrakes 90% of the vehicles out there, has great power, is fun to drive, offeres good utility, and has room for more of your stuff (including the dog) if that is required, why on earth wouldn’t you want one if you were ooking for that type of vehicle. Why wouldn’t ANYONE want one who can afford the price of admission? (Rennlist post) The Sports Car Owners Respond Not all sports car owners were hostile to the Cayenne. Indeed 18% of the first wave of buyers owned Porsche sports cars. As time passed, postings began to appear on Rennlist embracing the Cayenne. The posters noted that, unlike many SUVs built for the road, it handled like a sports car with sports car acceleration and nimbleness, yet had the ability to perform like a true off-roader and had impressive towing capacity. C All this over an SUV :rolleyes: And all this talk about how the newer porsches aren’t true to their sportscar heritage, seems to me all new cars are going this way, in the end a car company has to worry about selling new cars a lot more than selling old cars and new car buyers for the most part want all those luxuries…If Porsche thinks it needs a SUV to remain strong in the marketplace let them build it. Mercedes has an SUV for chrissakes are they any less of a luxury car company because of it? (Rennlist post) No

If you’re really a Porsche enthusiast, you recognize that they’re first and foremost the world’s best automotive engineering firm, and the Cayenne looks to be more proof of that. Conceptually, I don’t see it as being that far away from the 928. I can’t imagine a reason in the world why anybody would care that it has four doors. (Rennlist post) Pity you feel that way. Do you wave to 914 owners? How about 924 owners? Who decides which Porsche are worthy and which are not? I know plenty of enthusiasts that have Cayennes as second vehicles. While the Cayenne is not my cup of tea I’ve driven a few and they are pretty impressive for an SUV.

Do you really want to be one of those drivers that wave to some Porsche’s and not others? No flame intended…… just something to consider. After all there are some out there that don’t think a 986 or a 928 are real Porsche’s either! (Rennlist post) Do I have to say that negative opinions (regarding what is and is not a real Porsche) DO, in fact, piss me off. Who the hell is ANYONE, other than Porsche, to say what is and is not? I, personally, would NEVER buy a 924. I don’t like them. I don’t like how they look. I think they are underpowered and somewhat boring. Is it a real Porsche? Of course it is!!!! You know why?

Because PORSCHE built it and SAYS it is!!! Some shmuck who owns a 911 decides that a 944 isn’t real. Show me how he is qualified to make that assesment. Does it have a Porsche badge placed there, at the factory, by PORSCHE???? Then it is!!!!! (Rennlist post) 12 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. 511-068 rP os t Porsche: The Cayenne Launch However, the majority of the community continued to attack the Cayenne, relegating it to the bottom rung of the group’s status hierarchy.

Feeling the pressure, Cayenne owners posted their feelings. So SICK OF THIS, like the Cayenne, and plan to buy one. I come to this forum to get updated info, whats new. What I find is the same people making post after post of the same thing, Its ugly, I don’t like the name, why isn’t Porsche racing Bla Bla Bla. Do these same people go to the 914 forum and tell them their cars have VW motors, or the 924 forum and harp about Audi truck motors? (Rennlist post) op yo I have the V8 Porsche [Cayenne] and guess I get a little defensive when people call it a VW and I paid close to 69K for a quote un-quote VW.

I know deep down in my heart that I have a Porsche (Rennlist post) …well, maybe the ‘bashing’ was mild this time…but its being going on day in day out for the past year…Yeah, I shouldn’t let it bother me…but after a while anything starts to wear thin…trust me. (Rennlist post) Any of you guy’s ever hear the expression ‘if you don’t have anything good to say don’t say it. ’ Almost every time someone is excited about purchasing this vehicle some of you guys have to post something negative. Please next time post what you drive so I can use every opportunity to tell you what junk you drive. Rennlist post) Looking Ahead No tC Porsche’s senior management shrugged off the negative buzz from consumers. Despite the withering criticism from consumers, shareholders, and the press, Wiedeking claimed he was not concerned, though he admitted that the decision to build the Cayenne “was certainly not selfevident. ” He said that Porsche was “richly scolded” for moving away from its “brand core” so it knew that it had to be a success. Wiedeking argued that launching the Cayenne took the same courage that Porsche’s founder had demonstrated when he founded Porsche in 1931 during the Great Depression. 0 Schwab, Porsche’s North American President, labeled consumers’ response naive, “Those in the Porsche Clubs of America will castigate us for the SUV decision, but they just don’t know business. For them to keep having their beloved 911s, we have to find a niche elsewhere. That is modern business. ”41 Do Wiedeking and Schwab were already looking ahead to their next big launch, the Porsche Panamera, the company’s first ever four-door sedan. Envisioned as a rival to Maserati, BMW, Audi, and Jaguar sedans, Panamera would further diversify Porsche’s product portfolio and customer base. The Panamera is a perfect fit for Porsche,” Wiedeking professed, “It has all the typical DNA characteristics of a genuine sports car. In terms of performance, design, and driving dynamics, it meets Porsche’s high standards in every respect. ”42 13 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. Porsche: The Cayenne Launch Exhibit 1 Porsche Milestones rP os t 511-068 Ferdinand Porsche born Sept. 3 in Maffersdorf, Austria-Hungary. 1909 Ferdinand Anton Ernst (“Ferry“) Porsche born Sept. 9, in Wiener Neustadt, Austria. 1950 Porsche begins 356 production in Stuttgart-Zuffenhausen. 1951 The senior Ferdinand Porsche dies at age 70. 1953 Porsche introduces the 550, its first racing-specific car, which meets immediate success. 1964 Porsche introduces the 911. The company had produced 78,000 Type 356s in 14 years. 1972 Porsche KG becomes a joint stock company (AG). Ferry Porsche, chairman of the supervisory board, precludes all family members, including himself, from direct management roles. 1978 Launch of the front-engined 928 touring car. 1982 Launch of the 944 sports car. 1984

A third of Porsche AG’s capital is offered to the public in the form of nonvoting preference shares on April 25. On Sept. 19, his 75th birthday, Porsche receives the honorary title of “Professor. ” 1990 Butzi Porsche (Ferdinand A. ) succeeds Ferry Porsche as chairman of Porsche AG’s supervisory board. Butzi began his own firm, Porsche Design, in 1972. 1992 Wendelin Wiedeking becomes CEO of Porsche. 1996 Launch of the Boxster two-seater sports car. 1997 Porsche introduces its all-new, water-cooled 911 (the 996) at the Frankfurt Motor Show. 1998 The company prepares to celebrate 50 years of building sports cars with the Porsche name.

Ferry Porsche, honorary president of the Porsche AG supervisory board since 1990, dies March 27 at the age of 88. 2001 Porsche releases its plans to build an SUV. 2002 European launch of the Cayenne in December. 2003 U. S. launch of the Cayenne in March. No tC op yo 1875 Do Source: “Porsche Timeline,” AutoWeek, April 6, 1998, and casewriters. 14 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. Exhibit 2 511-068 Porsche Relative Stock Price Performance 600 500 rP s t Porsche: The Cayenne Launch January 1998 US$168 300 200 100 January 1997 US$87 Ja nM 90 ay -9 Se 0 p9 Ja 0 nM 91 ay -9 Se 1 p9 Ja 1 nM 92 ay Se 9 2 p9 Ja 2 nM 93 ay Se 9 3 p9 Ja 3 nM 94 ay Se 9 4 p9 Ja 4 n9 M5 ay -9 Se 5 p9 Ja 5 nM 96 ay -9 Se 6 p9 Ja 6 nM 97 ay -9 Se 7 p9 Ja 7 n98 0 op yo 400 DAX 30 tC PORSCHE DATASTREAM GERMAN AUTOMOBILE INDEX Do No Source: Thomson Financial Datastream, accessed February 13, 1998. 15 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 83. 7860. Porsche: The Cayenne Launch Exhibit 3 Porsche Group Highlights 1995–2002 rP os t 511-068 1995–1996 1996–1997 1997–1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 € million € million € million 1,437. 7 527. 7 910. 0 2,093. 3 671. 9 1,421. 4 2,519. 4 735. 5 1,783. 9 3,161. 30 955. 6 2,205. 70 3,647. 70 893. 2 2,754. 50 4,441. 50 1,001. 30 3,440. 20 4,857. 30 1,121. 00 3,736. 30 5,582. 00 1,482. 50 4,099. 50 Vehicle Sales Domestic Porsche Export Porsche Other Models Vehicle Sales Porsche 911 928 944/968 Boxster Cayenne Units Units Units Units Units Units Units Units Units Units 19,262 ,873 13,346 43 19,219 19,096 104 — 19 — 32,383 9,670 22,713 — 32,383 16,507 — — 15,876 — 36,686 9,174 27,512 — 36,686 17,869 — — 18,817 — 43,982 10,607 33,375 — 43,982 23,090 — — 20,892 — 48,797 11,754 37,043 54,586 12,401 42,185 54,234 12,825 41,409 66,803 13,896 52,907 48,797 23,050 54,586 26,721 54,234 32,337 66,803 27,789 25,747 27,865 21,897 18,411 20,603 Production Porsche total 911 Carrera GT 928 944/968 Boxster Cayenne Other Models Units Units Units Units Units Units Units Units Units 20,242 20,242 20,132 — 28 — 82 — — 32,390 32,390 16,488 — — — 15,902 — — 38,007 38,007 19,120 — — — 18,887 — — 5,119 45,119 23,056 — — — 22,063 — — 48,815 48,815 22,950 55,782 55,782 27,325 55,050 55,050 33,061 73,284 73,284 29,564 7 25,865 28,457 21,989 18,788 24,925 Employees Personnel expenses At year-end € million 7,107 392. 1 7,959 464. 4 8,151 528. 2 8,712 574. 9 9,320 631. 3 9,752 709. 9 10,143 799. 4 10,699 849. 5 Balance Sheet Total Assets Shareholders’ Equity Fixed Assets Capital Expenditures Depreciation Extended Cash Flow Net income before taxes Net income after taxes Dividends € million € million € million € million € million € million € million € million € million 951. 4 239. 1 482. 5 213. 6 67. 7 ,249. 7 298. 1 565. 3 234. 8 107. 6 27. 9 24. 6 1. 8 84. 5 71. 3 13. 0 1,490. 9 415. 8 579. 6 175. 8 157. 1 413. 1 165. 9 141. 6 21. 9 1,916. 10 587. 4 525. 6 155 183. 7 592. 5 357 190. 9 21. 9 2,205. 40 782 577. 7 243. 7 196. 6 506. 5 433. 8 210 26. 4 2,891. 60 1,053. 30 731. 8 293. 8 132. 7 764. 4 592. 4 270. 5 45 5,408. 70 1466. 80 2,207. 70 1,119. 50 278. 80 1,067. 30 828. 90 462. 00 297. 00 6,315 1,754. 50 2,663. 30 1,295. 20 392. 20 1,389. 60 933. 00 565. 00 59. 00 Do No tC op yo Sales Domestic Export Source: Casewriters, compiled from data listed in Porsche Annual Reports, 1995-2002, http://www. orsche-se. com/pho/en/ investorrelations/mandatorypublications/, accessed December 2005. Note: HGB and IFRS denote accounting standards. In 2003 Porsche adopted IFRS, or International Financial Reporting Standards. 16 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. 511-068 rP os t Porsche: The Cayenne Launch Premium SUV Market Information (1996–1998 forecast) (in units) Exhibit 4 400,000 350,000 300,000 op yo 250,000 200,000 150,000 100,000 0,000 0 1996 tC Luxury 1997 Upper middle class 1998 Middle class Do No Source: Casewriters, compiled from data contained in IHS Global Insight Report, “World Light Truck Industry Forecast”, 1999. 17 This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. This document is authorized for use only by Uma Jaidev at VIT UNIVERSITY until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp. harvard. edu or 617. 783. 7860. – –

When I look at my car all I can think about is the future for it and how glorious it will look when I am finished. I drive a carbon steel grey 2013 Volkswagen GET and I love it. Currently I only have a couple of modifications done to it but I have a list of plans for the future, for when I get the money. On my list of modifications, current and future, I can divide the modifications into three main categories; engine power, cosmetic appearance, and handling.

Some of the modifications may be in for than one category but all of the modifications lead to my car looking, sounding, and feeling tremendous. Engine power was the first thing I started to work on when I first got my car. First I went too tuning shop and had Leo, the owner of the shop, install an PAR stage 1 refresh which took the car from pH to about pH. That modification really woke the car up making it a little faster and a lot more fun to drive.

The next power modification I did was a cat-back exhaust which claimed to give the car 15 ore horse power but I did not feel any difference. The cat-back exhaust only made the car louder and gave the car a more aggressive look from the back. After the cat- back exhaust I installed an air intake which make the car more fuel efficient, gave it about 5 extra horsepower, and allowed the car to have an awesome blow off sound. The final power modification I have done so far was putting on a three inch downside and a stages refresh which took the car from about pH to about pH.

My power edification I hope to get in the future are an intake manifold, larger fuel injectors, Audit re coil packs, a key turbo kit from PAR, and a larger intercooler. For cosmetic appearance I have not done too many things yet but the things I have done made the car look much better and gave it a little bit of my own personal style. The first thing I did for appearance was changing my head light and for light to HID light, this made the car look much more aggressive and gave me better visibility in the night.

The next wing I did was tint the windows, I made them very dark in the back I believe it was a 5% tint. After that I painted my grill strips teal and added four teal stickers around the car. Two stickers are on the rear window and the other two are on my rear side windows. For cosmetic appearance that is all I have been able to do so far but I do plan to eventually get new headlights, new taillights, larger wheels, and the lower the car on coil oversee. Handling is the category where I have done very little to affect it.

I eave only done two things to affect handling and those two things are lowering springs and new tires. The lowering spring affect handling because they lower the car center of gravity making the car not lean so much in the corners. The tires help handling by allowing the car to get more traction so it does not slide around as much and because the car have more traction it can take corners at a faster speed. I plan to eventually get coil oversee, stronger sway bars, and new wheels. All of those items will help the car handle much better.

Looking at my car now makes me think of all the hard work I have put into it and how I look forward to doing a lot more work on it. Out of engine performance, cosmetic appearance, and handling I have done the most work on engine performance and the least work on improving handling. I hope in the next coming year I can save up enough money to do all of modifications I would like to do on my car and when I am finally finished my car will look, sound, and feel amazing. But, as every car person knows, a project car is never finished.

In the merger acquisition scenario across the world, the decision of Daimler and Chrysler to become one entity is a remarkable one and has become one of the largest mergers in the automotive industry. The partners got united in the wedlock with the vision of becoming a world enterprise by the year 2001. The promise of the merger to become a sure global winner is yet to be fulfilled even after one decade of the post merger. The talks for the merger spurted up in the beginning of the year 1998 during an Auto-exhibition conducted by the North-American international Auto show in Detroit.

The deal agreement was put into effect by November 1998 (Levin 1995). Daimler-Benz, famous known as the maker of luxury line of Mercedes-Benz vehicles, was one of the biggest and well known automobile industries of Germany. The Daimler-Benz union came into force following the First World War which led to the merger between Daimler and Benz in 1926 (Tom 2002). Its popularity and reputation as a quality auto maker is impeccable. Its quality engineering skills with production perfection eased the company to come up as a one of the most sought after auto maker the world over (New York Times 2005).

The company’s flagship brand Mercedes, which is one century old, is still popular among the luxury lovers across the world. At the time of merger, it had units in many parts of the world spread as part of fulfillment of its long cherished expansion strategy (Morosini 2004). On the other side, Chrysler, the maker of renowned brands such as Chrysler, Dodge, Plymouth and Jeep, was known mostly as the most efficient auto maker in the world. The operations of the company were confined only to the home market and sales outside the home market were nominal (Glascock 2000).

Exploring the history of the company, it was comprised of a mix of ups and downs and had been close to bankruptcy not less than two times. Realizing this and also that the home operations would not be sufficient enough to sustain in the market and compete with its rivals, the company decided finally to go ahead with the decision to unite itself with Daimler-Benz. The reasons for the significance of the deal between Daimler-Benz and Chrysler are manifold. The first being, it is the biggest deal ever found in the automotive industry.

Moreover, it is the largest merger between two profitable and successful companies. The main motive behind the union of the two successful companies was that after the merger with Daimler-Benz, Chrysler could enjoy the fruits from across the world, particularly in Europe and would be in a position to avail a ready-made wide network of distribution network which otherwise would remain as a dream for the latter. On the other hand, Daimler-Benz on marrying Chrysler could attain a share of not less than 15 percent in the Chrysler’s home market where the former had been facing stiff competition (Hansen 1995).

Furthermore, Daimler-Benz would be befitted by the access to the small car segment trendy designs that its counterpart had enjoyed. As a result of the association between these ‘two equals’, the merger would solve the deficiencies of both by serving each other. The success of any merger rests mainly on the effectiveness of post-merger integration (Marchand 1998). Synergies possible in various areas might just be lying in corners here and there idling away unless tapped properly through effective integration process (Dyer 2001). And DaimlerChrysler seemed to realize this right from the beginning.

The process of integration that DaimlerChrysler adopted was very well planned right from the beginning. Their past experiences with mergers coupled with the obsession for perfection led the German managers go to a great extent to leave anything concerning the merger to chance (Schwab 1996). The first is where one of the partners takes the lead and guides the merged entity towards one vision and set of values. The other being a bottom up approach where a series of task forces involving large number of executives from both the merging companies discuss and resolve key implementation issues in a decentralized way.

One reason for Daimler-Benz to get into the merger was the idea of growing into a global motor company, to borrow Lee Iacocca, the charismatic chairman of Chrysler (during one of its worst phases in history) `s terminology and dream, “Global Motors”, a fully integrated international car builder and seller. That surely seems to be one of the essential factors during this merger. For Chrysler it meant survival, which from its history, Chairman Eaton figured, would be difficult for it to achieve on its own.

While for Daimler-Benz it meant expansion, growth, newer turfs and ready-made addition to the product line besides a well-knit distribution system and an established presence in one of the largest auto motive markets in the world. All this was necessary if Daimler-Benz wanted to be global player and a leader in the new millennium. DaimlerChrysler went a step ahead and adopted an integration strategy that was above the limitations of each as it adopted a hybrid approach that combined both these methods. The board structure would oversee a series of integration task forces but with a centralized co-ordination team.

The company’s integration team was structured as follows. A Management Board consisting of 18 members drawn from both Daimler-Benz and Chrysler. A subset of 8 board members was created as the Chairman’s Integration Council (CIC). A post merger integration structure was put in place in which 12 issue resolution teams were assigned specific areas to proceed with the integration. This team met weekly and debated via the video-conferencing. The merger was regarded as a combination of equals and so the company decided to have co-chairmen in place.

Both Juergen Schrempp and Robert Eaton were to be the co-chairmen and Co-CEOs of the company for a period of three years after which Eaton was to leave the seat to Schrempp and step down. They decided upon a structure, which maintained two headquarters one in Stuttgart, the throne of Daimler-Benz and the other in Auburn Hills, Michigan Chrysler’s headquarters. Furthermore, the merger proceedings were clear about one thing, the maintenance of unique identity of each company’s brands. They decided that it to be an area where nothing would change because of the merger.

References Curcio, V. (2000). Chrysler: the life and times of an automotive genius. New York, NY: Oxford University Press, Inc. Dyer, J. , Kale, P. , & Singh, H. (2001, Summer). How to make strategic alliances work, Sloan Management Review, 42(4) (B) Glascock, J. (2000). The role of AT&T’s public relations campaign in press coverage of the 1982 breakup. Public Relations Review, 26(1), 67-83 Hansen, A. , Cottle, S. , Negrine, R. and Newbold, C. (1998). Mass communication research methods. New York, NY: New York University Press. Levin, D. (1995).

Behind the wheel at Chrysler: the Iacocca legacy. New York, NY: Harcourt Brace & Company Marchand, R. (1998). Creating the corporate soul. Berkley, CA: University of California Press, Ltd. Morosini, Piero & Steger, Ulrich (2004). ‘Managing complex mergers: real world lessons in implementing successful cross-cultural mergers and acquisitions. ’ London (FT Prentice Hall). New York Times, 19 November 2005. (Maynard, M. ) Daimler’s Mitsubishi exit spurs Goldman Sachs consolidation Schwab, K. , Smadja, C. (1996). Facing the perils of the global economy. International Public Relations Review, S