Published on: Mar 4, 2016
Transcripts - PorscheCase
The Porsche 918 Accelerates
Porsche Hybrid Technology
14 December 2015
Seidman College of Business
Case Study: The Porsche 918 2
Table of Contents
Product Design Processes………………………………...4
Capacity Management Approach………………….....….5
Operations Management Approach……………………..6
Topics for Further Reading………..………………..…10
Case Study: The Porsche 918 3
Case Study: The Porsche 918 Accelerates
Porsche Hybrid Technology Development
14 December 2015
This case study focuses on the strategic approach utilized by Porsche A.G. in
development of the Porsche 918 Spyder e-hybrid vehicle. Emphasis will be placed on the
product design process, capacity management, and operations management level strategies
integrated by Porsche in the design of newly developed electric-hybrid automotive technology.
Successful application of planning and innovation techniques employed through 918
development are also highlighted.
During the late 2000’s, Porsche engineers in Zuffenhausen, Germany were given a task
unlike any they had encountered in nearly 80 years of Porsche’s existence. At the time, it was
the beginning of a new era in automotive technology, a technology capable of maximizing
performance while simultaneously maximizing vehicle efficiency. This was the emergence of
electric-hybrid automotive technology. This technology presents an incredible range of
possibilities for Porsche. So much that, this technology arguably represents what the Porsche
brand has stood for in all its years, a combination of motor racing technology with everyday
usability. However, there was a company-wide issue facing this emerging technology that posed
many challenges; Porsche did not possess a great deal of knowledge about this technology, and
even less about how this technology can be utilized in Porsche vehicles. Porsche understood
well the importance of implementing electric-hybrid technology in their vehicles to retain market
share and prepare for their future in the hybrid industry; but, how would they approach such a
major undertaking from a strategic point of view?
Case Study: The Porsche 918 4
Porsche decided to begin development of electric-hybrid technology by looking within
their company to recognize their greatest, core strength and breadth of knowledge; pedigree
motor racing technology. Considering that an element of Porsche racing technology is present in
all vehicles under the Porsche name, it only makes sense to begin development here. In this
pursuit, Porsche decided to begin an incredibly ambitious project to create a new vehicle that
embodies the Porsche racing heritage, while simultaneously raising the industry standard of what
it means to create a hybrid vehicle. The solution: the Porsche 918 Spyder e-hybrid.
Product Design Processes:
The 918 Spyder is originally the successor to the critically acclaimed, non-hybrid,
Porsche Carrera GT. However, the 918 was designed around the latest in innovative Porsche
hybrid technology. In the final press release for the 918, Porsche claimed that “The entire car
was designed around the hybrid drive. The 918 Spyder therefore demonstrates the potential of
the hybrid drive to a degree never seen before: the parallel improvement of both efficiency and
performance without one being at the cost of the other” (Porsche A.G.). This technology can
present considerable possibilities both within the 918, but also in the development of other
Porsche vehicle models. In the same press release, Porsche then claims “In short, the 918 Spyder
will act as the gene pool for the Porsche sports cars of the future” (Porsche A.G.). This relates
closely to the attention that Porsche gave to the strategic product design process in developing
the 918. The 918 was not only designed to be a super sports car of the future, it was designed to
develop internal knowledge of hybrid technology implementation in Porsche vehicles altogether.
To point out a statistic, upon its release in late 2013, the 918 e-hybrid used a 6.8 kWh
liquid-cooled lithium-ion battery. Today, the 2016 Porsche Panamera S e-hybrid is starting to
roll off the production line as Porsche begins integrating electric-hybrid technology in their more
widely available models. The Panamera S e-hybrid contains a 9.4 kWh lithium-ion battery
slightly modified for different fuel economy. This is not a coincidence, this is an evolved
version of the battery used in the 918 Spyder e-hybrid.
Case Study: The Porsche 918 5
In addition, the 918 Spyder featured an outlet on the vehicle to charge the battery. As
standard, the 918 came with the Porsche Universal Charger Dock (AC). This is a small charging
station that can be installed on a US 240 Volt electrical supply to plug in the vehicle at home
when it is not in use. Today, new e-hybrid models such as the Panamera S e-hybrid also come
standard with the same Porsche universal charger, allowing this external Porsche technology to
work flawlessly across multiple Porsche vehicle platforms.
This level of strategic product development is what sets Porsche apart from other
automotive manufacturers. Through product development initiatives they have gained extensive
knowledge outside the end product in developing electric-hybrid technologies, as well as
accurately recognizing future industry trends and placing their company in a position to exceed
future expectations of consumers. These strategies are necessary for any successful business
today, especially considering rising consumer demand for environmentally conscious
Capacity Management Approach:
Following the release of the 918, this vehicle became known around the world for its
incredible rarity and prestige of ownership. This is a direct effect of a strategic capacity
management approach initiated by the 918 development team in South Germany. Production of
the 918 began September 18, 2013. According to an article in Automotive News, the vice
president of marketing for Porsche Cars North America Inc., Andre Oosthuizen, stated in an
interview that the 918 Spyder is nearing sellout status, with production ending July 2015.
Oosthuizen claimed, “planned production is sold out through late March or early April (2015)”
(Wilson 1). With a base price of $845,000, selling out this caliber of vehicle so quickly can infer
that supply did not live up to true 918 demand.
This strategic approach to supply levels assisted Porsche in accomplishing three unique
things; the 918 highlighted the exclusivity of the car and the brand in a marketable way, it
allowed them to realize a high mark-up on the base price, and it allowed them to produce enough
vehicles to gain deep insight into electric-hybrid technology development within Porsche
Case Study: The Porsche 918 6
vehicles. The level of items produced within a company is sometimes a strategic advantage that
is easily looked past by firms. Porsche payed great attention to this detail in their determination
to produce 918 vehicles, the result was a maximization of sales revenue and product exclusivity.
Operations Management Approach:
In Zuffenhausen, the 918 Spyder required the Porsche production facility to create an
entirely new and unique space for the assembly of their hybrid supercar. This space utilized a
new concept in hands-on automotive creation. The Porsche 918 assembly uses a limited number
of robotic machines. Instead, vehicle components move through the production line on
motorized “carts” that deliver sections of the car to stations of highly trained Porsche
technicians. At these stations, the expert technicians install several small steps of vehicle
assembly components before signaling that they are complete, and the vehicle continues down
the line. An article in Automotive Design and Production highlighted this process saying that
“One of the areas of emphasis in developing the process was on ergonomics. So, for example,
they're using scissor lift platforms that move from station-to-station as the car is built up, in
effect, from the inside out. The lifts facilitate the handling of a 140-kg battery pack, as well as
assume that the body shell is maneuvered without any in-process damage” (“Assembling”). This
design process has managed to integrate a hand-built, craft-oriented production process
seamlessly with a mass production style assembly line. To mitigate error in this hands-on
process, Porsche also employed a groundbreaking new manufacturing integration, Bluetooth
technology. Automotive Design noted that “this is the first-ever use of Bluetooth-controlled
cordless screwdrivers at Porsche. The Bluetooth connection is with a database that has all of the
torque values for the screws” (“Assembling”). Porsche’s strategy in producing a uniquely hand-
crafted product while maintaining uniformity and consistently high quality was nothing short of
amazing for 918 development. The photo below, (Figure 1), showcases an article by Josh
Barnett of Total 911 magazine highlighting the 918 production in photos. In this photo, we see
two Porsche technicians working together to craft an interior component of the 918 at their work
Case Study: The Porsche 918 7
Figure 1: Photo Courtesy of Total 911 Magazine; Josh Barnett, Nov 22, 2015.
This innovative approach to the automotive production line has given Porsche valuable
insight to electric-hybrid manufacturing and operations strategy within Porsche vehicles. This
production line also works as a training center for Porsche experts to learn about installation of
electric-hybrid vehicle components. This is knowledge that can later be applied to less hands-on
development of future Porsche e-hybrid models. Therefore, this production line has enabled
incredibly detailed 918 design assembly, while simultaneously reinvesting in internal knowledge
of their own employee understanding to prepare for the future.
Throughout the development of the Porsche 918 Spyder e-hybrid, Porsche has set an
example of an incredibly unique and strategic approach to development of a new product. A
testament to the success of this approach was witnessed at the North American International
Auto Show in January 2015. The Porsche 918 was awarded Robb Report’s 2015 car of the year
by the largest margin of victory in the 22 year history of the award. Detlev von Platen, CEO and
President of Porsche Cars North America stated in response, ‘"Winning Robb Report's 2015 Car
Case Study: The Porsche 918 8
of the Year award emphasizes the 918 Spyder's position as a ground breaking technology leader
and the pinnacle of Porsche's strategy of performance oriented plug-in hybrid vehicles"’
(“Porsche 918”). Today, those companies who can accurately recognize evolving industry trends
and act accordingly are those who create a sustainable future for themselves. Porsche’s
recognition of hybrid technology as an evolving trend posed a great challenge to them.
However, they took on this challenge readily while maintaining a true relationship to their
heritage that sets them apart in the first place, motorsport. Appropriately, they focused their
efforts on a strategic approach to product design, capacity management, and operations
management. As a result, the 918 experienced incredible sales while amplifying the entire brand
image to a level of prestige. The important concept to take away is that the principles applied by
Porsche in this case are applicable in many other industries. Whether designing a new computer,
wind turbines, or even just understanding a developing technology; the producer who plans
ahead, innovates, and sets themselves up for success is usually the industry leader.
Case Study: The Porsche 918 9
This case study outlines the strategic approach used by Porsche A.G. in development of
the Posche 918 Spyder E-Hybrid vehicle model. The information presented pertains to
undergrad and graduate students, as well as the executive level learner of using technology to
develop strategic product and operations advantages within an organization. Emphasis will be
placed on how Porsche focused on the product design process in their pursuit of advancing
internal knowledge of a developing technology, their strategic approach to capacity management,
and their operations level development of the 918 production line. In teaching, this material
should be used to assist students in product level strategic development processes. Discussion
questions may include:
-What challenges might Porsche face in the future from this technology?
-How has this technology altered customer perception of the Porsche brand?
-What other types of product would Porsche’s strategy provide a strategic advantage for?
Relative quantitative data may include the vehicle base price of $845,000, the limited
number of 918 vehicles produced, and that the 918 e-hybrid model features two lithium-ion
batteries with an energy content of about 7 kilowatt-hours. This information gives an idea of the
918’s market competitors within the hybrid “supercar” industry. Student discussion in the past
has tended to focus on how current competitors such as Ferrari and Tesla Motors pose a sense of
urgency to Porsche hybrid development, as well as Porsche teaming with other companies such
as Volkswagen and Audi in the development of processes.
An expanse of Porsche press release information on the 918 model can be found online at:
Case Study: The Porsche 918 10
"Assembling the Porsche 918 Spyder." Automotive Design & Production 127.3 (2015): 12-5.
ProQuest. Web. 14 Dec. 2015.
Figure 1: Barnett, Josh. “The Porsche 918 Spyder production line will blow your mind.” Total
911. 20 November 2015. www.total911.com. Web. 14 December 2015.
Porsche A.G. “Introducing the Porsche 918 Spyder” Porsche Press Release. N.p., n.d. Web. 14
Porsche Cars North America Inc. “New Plug-in Hybrid and Extended Wheelbase Variants
Added to Revised Panamera Range” Porsche Press Release. N.p., n.d. Web. 14 Dec. 2015.
"Porsche 918 Spyder Named Robb Report Car of the Year." PR Newswire. Jan 15 2015.
ProQuest. Web. 14 Dec. 2015 .
Wilson, Amy. “918 Spyder nearly sold out, Porsche says” Automotive News. Oct. 2014. Web. 12
Topics for Further Reading:
APICS Strategic Management of Resources References Sourcebook
Operations and Processes Ch. I-1, Pg. 3
Product and Service Design Processes Ch. I-6, Pg. 181
Capacity Management Ch. I-8, Pg. 247