C’mon, be a sport Wendy!

If there is one thing that Wendelin Wiedeking, German sports carmaker, Porsche’s CEO for 16 years would be remembered for after he steps down from his post, it will have to be his horrendous plan to acquire Volkswagen because of which Porsche is saddling with huge mountains of debt to the tune of $14 billion. Maybe this is why the supervisory board of Porsche Automobil Holding SE unanimously accepted the CEO’s resignation. Did we tell you that Wiedeking is also Germany’s best paid CEO! Had Porsche been an American company, Barack Obama would have definitely thrashed Wiedeking with his famous ‘Say on Pay’ bill! Coming back to Germany, it is believed that despite much controversy surrounding Porsche’s buyout of Volkswagen (that actually triggered the CEO exit), talks of merger may revive once again following Wiedeking’s exodus. But it ain’t as easy as it seems to be. Before the merger talks take any form, certain issues still need to addressed gingerly before the merger gets a green signal.

Interestingly, Wiedeking was the one who got Porsche back from the brink of bankruptcy in 1992. But his idiosyncratic attempts to acquire Europe’s largest automaker, Volkswagen has taken Porsche into deep realms of debt. In fact, the hostile takeover attempts by Porsche opened the doors to Ferdinand Piech, Volkswagen’s powerful Chairman and a part-owner of Porsche, to turn the tables on Porsche. Piech even went to the extent of convincing the company to take over Porsche on the condition that the sports carmaker will improve its finances first. There is no denying the fact that Porsche will have to test the rough waters carefully before going ahead with its decision as experts expect the desired merger to be driving the growth of Porsche for many more years to come.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Social media helping in brand advocacy?

Ever wondered how active users of social networking sites can help enhance the equity of a brand? Anderson Analytics conducted an online survey in June with 5,000 demographically representative respondents to identify users’ likely interests, buying habits, media consumption, et al, and concluded that there are definite data-driven segments in the social networking site market, both for non-users and users. “Most of the marketers don’t understand the nature of social networking. They are responding with little thought or strategy and are wasting money as a result,” says Rob Enderle, Principal Analyst and President, Enderle Group. Marketers need to advertise where the likely customers are spending most of their time and target the ad so that it will be consumed in the context of their activities and find a way to capture metrics of the success so that they can improve upon it. Enderle further adds, “They first have to profile their customers and then design a program that works within the context of this media.” Take for instance Facebook. It has been observed that Facebook-users are non-youth and average in the level of interest shown in the site compared to Twitter and MySpace. LinkedIn, on the other hand has a more professional user base. These social networks can be used to create forums that encourage consumers to share their experiences with a brand. Not only will this increase brand awareness, but it will also lead to higher levels of word of mouth advertising and will increase brand advocacy.

Arun Kumar Roy

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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