Porsche mission e

Baggio Michela

876690

Bijin Babu

876654

Cheli Filippo 876241

19391931

Short history of Porsche

Ferdinand Porsche founded

the company

The Porsche 64 was developed using

many components from the Beetle

1948

Ferry Porsche launched the Porsche

356 (the first real Porsche)

1964

After many victories in racing competitions,

Porsche 911 was presented

1972

A new executive board without family

members was established

1990

Porsche introduced the lean

manufacturing learned from Toyota

2007

A revolutionary model was launched: Porsche

Cayenne

2004

Toyota assisted Porsche in

developing hybrid technology

2014

Porsche announced several hybrid models (Panamera, 918 spider,

Cayenne S)

1984

The company goes public

What now?

Porsche Mission e 5

“Efforts aimed at offering unmistakable emotional design withexcellent performance for the first Porsche four-seat batterypowered; this is the new Porsche Mission E.”

«Creating tomorrow»

Index

1. Questionnaire «1» - Electric cars' market

2. External analysis 1. S.T.E.E.P analysis

2. Porter’s five forces

3. Internal Analysis

4. S.W.O.T

5. Porsche Mission e1. The product

2. Things are going to change…

3. Direct competitors

4. Switching cost

6. The business model

7. Questionnaire «2» - Porsche’s perception

8. Our proposals

Ind.it group started the analysis of the context in which Porsche operates with a brief market research. Using the Google forms, we built up aquestionnaire aimed to understand what people generally know about the world of electric cars. Here we report some of the most interestingquestions and the results that we obtained.

Questionnaire «1» - Electric cars' market

External analysis – S.T.E.E.P analysis

SOCIAL

- Customers need new ways of understanding transports;- People are better informed and can have easily access to

data;- Population is increasing very fast;- Eco-products are very appreciated by customers and

enforce brand image;- Customers have the necessity of high batteries’

autonomy.

TECHNOLOGICAL

- Patent protection;- New developments are opening a wide horizon of

opportunities;- Technology became a key feature for products;- New technologies have to guarantee reliability and

performances.

ECONOMIC

- High R&D and marketing costs;- Cost for training;- Necessity of new kind of raw materials vs. finiteness of

resources;- High investments in new production system.

ENVIRONMENT

- Awareness of environmental issues;- Governments are signed strict protocols;- Fossil resources will not have infinite life;- Increase in number of electric stations.

POLITICAL

- Governments are supporting new technologies;- Countries characterized by high pollution level have to face

higher taxation;- Governments encourage customers to change their habits.

External analysis – Porter ’s five forces «New entrants»

1. Medium concentration high attractiveness ofthis industry because it’s still young and with ahigh possibility of development.

2. The CO2 emissions regulations and theinvestments in subsidies and incentives bygovernments around the world are encouraginggreater industry participation and adoption in themarketplace.

3. Continuous innovations in battery technology.4. Electric cars are far easier and cheaper to build

compered to the gasoline-powered automobiles.This contributes to make more attractive thismarket.

1. Existence of strong brands. The most importantplayers in the EV industry are companies thathave already a strong position in the automotiveindustry.

2. Despite the expected growth of this industry, theeconomies of scale are not so profitable yet. Stillnowadays the cost for the battery of an electriccar represents the 27% of the entire cost of thevehicle.

3. The existing partnerships between the electriccars’ makers might discourage new entrants.

Hydrogen cars.The hydrogen is turnedinto electricity throughfuel cells that powerselectric motors. But thesevehicles are stillprototypes.

ICEs cars.Fuel efficiency of InternalCombustion Engine vehiclescontinues to improve. Inaddition, the cost advantageof EVs increases as gasolinecosts rise and decreases asthey fall.

Hybrid cars.Many notable parts essential for hybrid and gasoline vehicles are removed entirely in electric cars. But individuals could prefer an hybrid car; in fact, they might find it safer than an electric one because if you run out of battery, you will still have fuel.

Solar cars.It’s an electric vehiclepower by solar energy.Today solar panels canonly be used to extendthe range of Evs.

External analysis – Porter ’s five forces «Substitutes»

Medium concentration. The main brands in the automotive industry, like Toyota Motors, General Motors, BMW, Nissan Motors,Ford Motors, are involved in the manufacturing and development of their own electric vehicles, but these cars are in most casesonly prototypes or projects. The real actors on the EV industry are not so numerous until now (they mainly come from China andIndia). It’s possible to better understand the internal rivalry considering also other factors:

→ The industry is still young. Nevertheless, the market is expanding very fast thanksto the quick development of innovative technologies and the new customers’behaviours towards sustainability and energy saving.

→ Technically-savvy and automotive-oriented nations like the US, Germany, Chinaand Japan, have plans to increase considerably the number of electric cars in theirown country. (I.e. UK Government’s vision is that by 2050 almost every car will bean ultra-low emission vehicle).

→ There are no consistent exit barriers. This contributes to make the EV industry amarket with a medium internal rivalry.

External analysis – Porter ’s five forces«Internal rivalry»

BARGAINING POWER OF BUYERS: moderate→ Direct consumers in the EV industry are especially of middle-

upper class, environmentally conscious, tech savvy, politicallyactive. Thus, they are generally less price sensitive.

→ Customers have growing expectation about range and chargetime met today. This key aspect is increasing their influence onautomakers strategies.

→ Companies which are more developed in the EV industry areoften suppliers for the other new firms entering this market.They can’t lose these companies because, throughpartnerships with them, they are allowed to share and increasetheir profit with the earnings made by their buyers.

BARGAINING POWER OF SUPPLIERS: high→ Strong partnerships between automakers and batteries

manufacturers. Nowadays, the outsourcing of technological toolsis the most common solution; however, automakers are stilldeeply involved in the design and the production of batteries fortheir vehicles.

→ This young industry is creating some very dominant suppliers.This increasing relative concentration contributes to the growthof their power.

→ The EV market now is all about technology. If Companies reallywant to compete with ICE makers, they have to accelerate theprocess and researches of innovation by acquiring technologyexternally.

→ The manufacturing of new technological electric cars mightincrease the usage of some specific resources. One of them isthe lithium. The Lithium-Ion Battery is rapidly expanding as analternative to the nickel-metal hydride batteries in the hybridelectric vehicles. The consume of lithium is expected to grow inthe next years.

External analysis – Porter ’s five forces«Bargaining power»

Internal Analysis – Porsche in the automotive industry

→ Porsche has a lean organisation structure which allows the companyto increase its efficiency and consistency with its exclusive products.

→ The firm uses a class-leading technologies that competitors finddifficult to imitate.

→ Its sports car maker occupies the pole position, with maximumappealing in US.

→ Porsche offers vehicles with high performances and prestige yet atmore affordable prices compared to BMW M6 or Mercedes-Benz SL-class.

→ Customers choose Porsche for its: innovative features, exceptionalstyling, European origin.

Differently from premium brands like Alfa Romeo, BMW AG andMercedes-Benz, that base their strategy on ramping upproduction to grab volume, Porsche is limiting its availability. Sinceit’s a luxury brand, it lives from its exclusivity and as the Porsche’sCEO also stated: “If everyone drives a Porsche, it’s not exclusive”.

As a consequence, despite it offers differentproducts (SUV, 4-doors, sedan and truck), Porscheresults smaller than most of its competitors. Thecompany exports its products all over the worldbut it’s not international expanded.

What is driving Porsche?

S.W.O.T Having analysed in details both the external and internal contexts, we decided to resume allthe key points using the S.W.O.T. tool.

• Global presence thanks to exportation

• Well performing brand & iconic design

• Already existing full portfolio of hybrid cars

• High quality of products offered

• Waiting list & low volume production

• Specialized employees

• Huge investements requirement

• Very targeted customers

• New market segment focused on fully electric cars (Environmental issues)

• Tax reduction for companies offering EV

• away the shame of dieselgate

• Many potential substitutes

• Competitors are expanding their products’ gamma

• New disruptive technologies

Strenghts Weaknesses

ThreatsOpportunities

Porsche Mission e

With Porsche Mission e project the companyaims to sell and create an eco-system and notonly an EV car. The offer includes:

- Car;

- System of battery charge;

- Application for car’s management.

→ 600 CV full electric engine (440 Kw);→ From 0 to 100Km/h in less than 3,5

sec;→ Automatic torque distribution to

individual wheels;→ Low centre of gravity;→ Energy recovery during braking.

→ Full charge provides an autonomy of500 km;

→ 80% charge in 15 min sufficient for400 km;

→ Loadable also wireless, thanks to abuilt-in coil in the floor;

→ Plug very versatile and battery lessheavy .

The product

→ Digital key opens the car to theowner and people authorized;

→ Eye Tracking System andinstrumentation eye commands;

→ Connection with Porsche connectstore via smartphone or tablet.

The car The battery The extras

Things are going to change…

The electric car industry got a sharp rise after the arrive of Tesla Motors whichentered the market in the 2008 with the fastest ever production electric car.Nowadays, Tesla Motors is the uncontested technological leader in the EVindustry. Its cars are modern design with unprecedented engineeringstandards and it’s the only company making long-range pure electric vehicles.

Investements in electric cars market

Level of tecnology

However, things are going to change. Theglobal luxury marques are making plans tocompete more directly with Tesla Motors andits Model S all-electric long-range luxury sedan.The histogram shows the expected growth ofthe industry: electric vehicles will be 35% ofglobal new cars sales by 2040. Porsche is oneof the few brands that has already presented aprototype ready to be produced: Mission e.

0

5

10

15

20

25

30

35

40

45

Price [10^4 $] Speed 0-60 mph [sec] Autonomy [10^2 km] Charging time [min]Porsche Mission e Tesla model S Karma Revero

Direct competitors

The value curve shows how Porsche with the lowest price is able to provide anyway very good performances close to the TeslaMotors’ Model-s (the delta price is quite high, around 41,300$). The Mission e achieves better results in one of the mostimportant fields: charging time. This selling point should allows Porsche to gain an important market share embeddingeveryday users of EV.

Switching cost

Panamera S Panamera hybrid Mission e

Fuel [€/10’000km] 9,4[L/100km]*1,6[€/L]*100[10^2 km] = 1504€ 5,8[L/100km]*1,6[€/L]*100[10^2 km] = 928€ 2,5[€/120km]*10000/120[120km] = 208€

Investment required for hybrid or electric solution

Recharge station 600€

Charging cables single phase 32A (type 3C) 209€

Panamera S Panamera hybrid Mission e

Taxes ↑ ↓ ↓↓

Insurance * = ↑ ↑↑

Maintenance** ↑ ↓ ↓

(*) The insurance price of hybrid and EV vehicles is higher due to:→ Higher price of these cars compared to the ICE’s ones;→ The payout is higher when these cars are stolen or

damaged (repair costs are more expensive due to themore sophisticate technologies used).

(**) The maintenance cost for gas vehicles is higher because thecheck up for ICE’s car is more frequent.

The business model

Customer sideCompany side

+1. Key partners2. Key activities3. Key resources4. Cost

1. Value proposition2. Customer Relationships3. Channel4. Revenue5. Customer

Business model – Customer side

Customer RelationshipsPorsche aims to provide its customers a unique purchase andownership experience. It tries to reach its purpose through:→ Relevant and personalized communications with its clients over

different touchpoints throughout their sales journey;→ Each customer has a personal sales contact operator;→ A global Porsche CRM system, designed to consolidate customer

contacts across channels and to create an individual customerjourney that is tailored to the customer's needs.

ChannelPorsche is using motorsport events to present its newall-electric car, that it will be available in 2020 in all itscentres around the world.

RevenueThe company expects annual sales of about 20,000 units for its first all-electric car, the Mission e.

Valueproposition

Soon, the customers willbe able to drive aincredibly powerful carwith amazingacceleration and to savea lot on fuel cost. Theproduct will offerunmistakable emotionaldesign with excellentperformance for the firstPorsche four-seatbattery powered. new

CustomerMission e could be theanswer for customers that:→ Look for luxury and high

sport performances;→ Belong to the middle-

upper class;→ Are environmentally

conscious, but need avery reliable product(like fast charging).

Business model – Company side

Key partners

Porsche wants toconcentrate thedevelopment of new coretechnologies internally.While the company isworking with a number ofother organisation to builda network for charging itsnew all-electric cars.

Key activities→ Porsche is expanding its plant in Zuffenhausen for electric drives manufacturing;→ To support innovative products Porsche has created its own Digitalization

Competence Centre.

Cost→ Porsche is investing almost a billion plant in

Zuffenhausen;→ Relevant efforts in training people;

Key resources→ The most difficult aspect of electric car development is finding talented

experts capable of designing, developing and constructing this new type ofvehicle. Porsche already counts on 24,000 employees in the plant whereMission e will be implemented and it will hire 1,400 new people tocomplement its staff;

→ IT and electronics will account the 30% of value added share in future Porschecars.

→ New patents right;→ High costs in R&D;

→ Marketing & promotion.

→ New investment ICT;

Questionnaire «2» - Porsche’s perception

The group made a second questionnaire in order to understand the perception of people about the binomial between Porsche and EV cars. Themain results are reported here below.

Our proposals

Analysing the previous data collection of questionnaire, Ind.It hasidentified two main areas of possible improvements.

To fulfil the customers expectations and to support Porsche’sbusiness model canvas, the group proposes two main options :

1. Purchase combinations;

2. Porsche green network.

Purchase combinationsCustomer property Porsche property Type of contract

Insurancecontract for thecar’s battery

Leasing contractfor the car’sbattery

Full leasingcontract

Customer

Ind.It group thinks that to facilitate the transition to electric cars the costumers should have a wide range ofofferings among which they can decide their purchase. To do that, four purchase combinations have been designedbalancing three main purchasing’s aspects: customer property, company property and contracts.

Porsche green network

The second proposal of Ind.It is to build up a network among all possible Porsche electric car’s useurs.Porsche green network aim to allow to everyone who get a personal recharge station to share it with otherPorsche’s family members.

By doing this:1. The customer who shares its own recharge station gets some

Porsche coins spendable for example to make lighter the rateod battery insurance of leasing costs;

2. The number of recharge station increase simplifying long traveland services for all customers;

3. The future extension of electric technology to other Porschemodels can rely on well structured infrastructure;

4. The customers create a social-network based on similar valueand needs;

5. The company looks more closed to its clients.

Guest Host

Porsche Mission e 27

Thanks for your time…