Porsche’s strategy and brief financial assessment Car manufacturing industry is one of the most competitive industries in the world. Besides the large amount of capital investment required, the industry is also characterized by high level of engineering expertise. Therefore, car manufacturing companies have to incorporate lots of technology to compete favorably in the industry. Regulations also pose some challenges to car manufacturers. To survive in this industry, Porsche uses a number of strategies. Some of the approaches used by Porsche include: diversification to global markets, manufacturing top brand cars, innovation, creating strategic companions, divergence and loyalty. Porsche sought to expand to international markets through exportation which is perceived to be a cost effective method compared to establishing branches. Effective expansion to transnational markets is believed to result not only to greater economy of scale but it also intensifies market penetration. Rather than modifying its brand in the international markets as other manufacturers do, Porsche provides the same brand throughout the world. This can be viewed as a low risk trade-off strategy that is helpful in preventing intercontinental product dilution and allows it to remain steady in terms of costs. Producing high quality sports car is also an important Porsche strategy. Porsche manufactures high performance cars that provides long term dependability compared to any other brand. To produce high quality cars, Porsche applies innovation and technology advancement generated from its racing programs. Even though they continue to produce high quality cars, they have kept their car cost comparatively cheaper to capture many customers. Another useful strategy employed by Porsche is the development of strategic partners. The corporation forms alliances with other companies in a bid to acquire modern technologies in car manufacturing. For instance, in 1999 Porsche acquired 49% of Miseschke Hoffman and Partner (MHP), which served to improve the information technology services and Porsche’s process Engineering. Porsche is also keen in forming associations that do not require equity capital. Porsche has continued to diversify its brands to meet the changing demands of its clients. For example, when the customer preference to SUV hit the market in 90s, Porsche decided to diversity its production to include SUV. This move became so lucrative that it fueled Porsche’s developments in many years that followed. Finally, loyalty to production of top brand quality remains the commitment of Porsche. Therefore, customers also remain devoted to Porsche because they provide whatever the needs of their customers. Analysis of the financial statements of Porsche indicates a continued economic growth. For instance, in the 2008/2009 financial year Porsche made a net profit of 8 million Euros while net profit for the period 2009/2010 was 4,496 million euros. Analysis of the balance sheet also indicates an increment from 7,993 million Euros in financial year ended July 2009 to 16,977 million euros in July 2010. This economic growth could have been contributed by expansion to international markets and continued customer preference to Porsche. Internal and External Issues Even though Porsche strives to ex