Klaus Zellmer, President and CEO of Porsche-North America, in Fortune Magazine (15th January, 2016) Porche's Historical Backdrop: Porche started as an engineering and design company that offered services to other automakers. When it started as an automaker, after World War II, it deliberately kept itself small. Other automakers were not threatened and trusted Porche's capabilities. Porche Engineering Group (PEG) was a 100% owned subsidiary of Porche and consisted of an R&D team of around 2500 engineers, who also simultaneously worked for other automakers. PEG is often considered Porche's secret weapon that gives it an edge in technology and product development. There are deals with clients that in case some design is not adopted by them, the same can be adopted by Porche. Porche is known for tradition with innovation. Interview Excerpts: You've said you're trying to strike a balance between making Porsche a brand that is accessiblebut also still exclusive. Can you explain? KZ: If you are only socially acceptable, you are not exclusive anymoreyou are nothing special because everybody can have you. But you must also never exclude people just because they can't afford a car. That's when you get the wrong finger sign [held up] when you drive by! We only want the thumbs-up. The other balance we have to strike is between tradition and innovation. And as much as we love our tradition, you have to show people that this brand has a future and that it's on eye level or above with offerings from other car manufacturers. Porsche has a history of pushing that line. But are you ready for how Porsche lovers will react to an all-electric Porsche? KZ: I love this subject because we've had this situation for as long as Porsche has existed. When I started at Porsche, I was the personal assistant to the executive vice president of sales and marketing. For the first four weeks, I had to answer letters from people saying, 'You have lost it because you changed [engines] from air-cooled to water-cooled.' It was '96-'97. I thought what's wrong with these people? It's a great car! But they were so in love with the old car. Changing something always causes uncertainty. Now, striking the right balance is about sustainabilitysustainability to drive your business into the future. Now when we talk about the all-electric Mission E, people are saying, 'But how can you build a Porsche without sound?' This is where we can innovate unlike other manufacturers and where we will find ways to differentiate.

What is the generic strategy of Porche? How has the generic strategy helped Porche

What is the core competence of Porche? Why do you think so?

Do you think Porche has a competitive advantage? How sustainable do you think the competitive advantage is? Justify your answer