Porsche Case Study

Interpretation: 53% of the total assets are financed through debts; the remaining 39% is financed through equity.

1. What does a financial analysis of Rawlinson’s options reveal? Assume that Rawlinson has a $500,000 budget and Porsche dealers and Porsche Canada earn a margin of 15% each on its winter equipment.

Since we have 8.245 million shares outstanding, the total increased value is ($13.5-$5.875)*8.245=$62.87 million. It is very close to the PV of tax shield ($64.19 million).

The industry for superior luxury cars is a highly exclusive one with a few automotive makers making their presence felt. The major market share is held by Porsche which is known to have formidable rivals like Benz and BMW. The SUV supercar segment is a highly evolving one where manufacturing style localities and units are the decisive forces that ultimately culminate towards the cost of the car.

Market value proportions of: Debt = $1,147,200 / $4,897,200 = 23.4% Pref. Share = $1,250,000 / $4,897,200 = 25.5% Common equity = $2,500,000 / $4,897,200 = 51.1%

Should the new Toyota president accelerate the launch scheduled for the Toyota Prius? The plan to introduce the car “at the end of 1998 with expected production of 1000 units per month…” (Reinhardt, Yao & Egawa, 2006) is an extremely aggressive and ambitious goal; but, is it in TMC’s best interest to speed up the planned launch? There is no doubt that the new president (Hiroshi Okuda) is under extreme pressure to compete in a global market, he believes the company should radically alter its image to attract new customers and gain a competitive advantage while systematically facilitating environmentally-socially responsible practices. It may very well be that TMC should push for a faster

Based on pro forma figures, stock price is expected to be almost $3 higher at a debt ratio of 70%. Given that most of our stockholders are institutional investors, a $3 increase is extremely significant when hundreds of thousands or millions of shares are owned.

technology project. The BPTO produced weekly status reports and monthly budget reviews helping the company gauge where it was heading towards. Thus the alignment started advancing (Austin, 2007).

1) Do you believe that Porsche’s management is appropriately concerned with stockholder wealth? Does Porsche’s ownership structure work to the benefit or detriment of public shareholders?

What are the causes and consequences of BMW’s quality problems with newly launched products? What should be done to improve “launch quality”?

The invention of automobiles had been dated long back in history. From that day till now, it had not only made our lives easier but also simpler. From times back then till now many big automobile companies had came into existence, some of them were successful and some were not, thus going out of market and competition. Among them, Porsche and Volkswagen Group(VW) have emerged as one of the world leaders in automobile industry. Through years of hardwork and sheer use of technology and engineering developments, both of these companies have carved a name for themselves in their respective markets. But sometimes, bad management and several areas of conflict arise between two companies that can lead to its downfall. In this case too the CEO of Porsche, just wanted to administer each and everything according to his own ways and rules, but on the other hand the CEO of Volkswagen, even after facing huge loses wanted to continue on with his strategy because he was quite confident about his strategy and clearly had a broader outlook of the scenario. Therefore, due to having different mindsets, there was a conflict between the ideas of two which led to the decline of one of them. These conflicts can be summed up in the following couple of questions:

1) The buyer decision process of traditional Porsche customers relies on the motivations that determine these people to select this brand. Their purchasing decision process is based on the exclusivity of the brand that is connected with the car owner. In their opinion, by purchasing a Porsche, traditional customers purchase the exclusivity and luxury associated with the brand. These customers want to purchase a car that reflects their social status and their financial power. In addition to this, they are not interested in the utility of the car, but in the characteristics that differentiate it from utility cars. These traditional buyers are rather interested in their feeling while driving a Porsche in comparison with the size, price, or fuel economy of the car.

BMW (U.S) Holding Corporation is a franchise of the high-end performance based global automotive company BMW. For the first time in its history, BMW is to launch its first American made car, the BMW Z3 Roadster. Having only made cars in Germany, this time the car is to be assembled in Spartanburg, South Carolina. BMW’s objective is to expand its market share in the U.S., make the brand name more global and improve its dealer network. With this in mind, the company developed a two phases launch plan for the BMW Z3 Roadster.

Once again, The Ultimate Driving Machine delivers high-end performance with their 4 Series at BMW of Oyster Bay. There’s something for everyone in this popular Series that ranges from Coupe to Convertible to Hatchback. The sleek, sporty design with tight steering makes for a magical ride. All Wheel Drive and Turbo are options that enhance the joy. With a MSRP price range from $43,300 to $51,450, the 4 Series blends sporty with comfort while sparing the gas.

"The mission statement up to the year 2020 is clearly defined: the BMW Group is the world 's leading provider of premium products and premium services for individual mobility."