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HSBC'22 Internationals Case, 2nd Round

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Josephine Lau prepared this case under the supervision of Professor Bennett Yim solely for class discussion. Though interv...
22/725C Porsche Taycan: Service Failure and Recovery
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development of mission E variants and derivatives,4
the electrifica...
22/725C Porsche Taycan: Service Failure and Recovery
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Figure 1: Taycan Deliveries in 2020—Top 10 Countries11
Porsche in 2...
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HSBC'22 Internationals Case, 2nd Round

  1. 1. Josephine Lau prepared this case under the supervision of Professor Bennett Yim solely for class discussion. Though interviews were conducted as part of developing the case, the case should not be considered a primary source as certain information has been altered or is fictional to protect confidentiality or to otherwise facilitate teaching of the case. Accordingly, the case should not be considered a factually accurate depiction or a record of any specific situation or event. Cases are written in the past tense, this is not meant to imply that all practices, organizations, people, places or facts mentioned in the case no longer occur, exist or apply. © 2022 by The Asia Case Research Centre, The University of Hong Kong. No part of this publication may be digitized, photocopied or otherwise reproduced, posted or transmitted in any form or by any means without the permission of The University of Hong Kong. Ref. 22/725C Last edited: 19 April 2022 BENNETT YIM JOSEPHINE LAU PORSCHE TAYCAN: SERVICE FAILURE AND RECOVERY Eileen Chau, Head of Customer Relations at Porsche Hong Kong, was at her desk going through the monthly report on service satisfaction, a routine put in place to ensure the health of the company’s customer service. A flagged entry caught her attention. She decided to listen to the audio recording. At the other end of the line, a new Porsche Taycan owner was airing his frustration. Critical options were missing from the new Taycan he ordered, he said, and he was disappointed with the dealership’s handling of his complaint. To Chau, it was obvious that this was a case of service failure and the dealership’s unsuccessful service recovery, and she must do something about it. Porsche: Mission E and the Birth of Taycan Automakers worldwide were planning to address the global climate issue sometime after 2015. A McKinsey report pointed out the noticeable adoption of electric vehicles (EVs) that occurred in the second half of 2020, despite the economic downturn caused by the pandemic.1 Global sales of EVs accelerated, led by Europe, resulting from policy mandates for emission targets and government tax incentives for consumers. Taycan, an all-electric sports car, was the flagship of Porsche’s mission E initiative.2 Porsche first laid out its agenda for electrification and digitization in the company’s “Strategy 2025,” announced in 2016. Two years later, the company said it would inject more than €6bn in electromobility by 2022, doubling the planned investment.3 It used the resources to fund the 1 Julian Conzade et al., “Why the automotive future is electric,” McKinsey & Company, 7 September 2021, https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/why-the-automotive-future-is-electric, accessed 9 February 2022. 2 “Mission E: Porsche’s first fully electric sports car is named Taycan,” press release, Porsche AG, 8 June 2018, Porsche.com, https://newsroom.porsche.com/en/products/porsche-taycan-mission-e-name-of-series-production-electric-sports-car- electromobility-concept-study-70-years-sportscar-15602.html, accessed 15 January 2022. 3 Porsche AG, “Porsche Strategy 2030,” https://newsroom.porsche.com/en/company/annual-sustainability-report-2020/porsche- strategy-2030.html, accessed 15 January 2022. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  2. 2. 22/725C Porsche Taycan: Service Failure and Recovery 2 development of mission E variants and derivatives,4 the electrification and hybridization of the existing product range, the expansion of manufacturing sites, and investments in new technologies, charging infrastructure, and smart mobility. Taycan: The All-Electric Sports Car The name Taycan, which came from two terms of Turkic origin to mean “the soul of a spirited young horse,” was selected from 600 proposals. It stood for what Porsche’s first all-electric sports car was to be: “lively, impetuous, vigorous, light-footed on long stretches without tiring, and free-spirited.”5 The company projected annual sales of 20,000 units a year, roughly two- thirds of the sales figure of its classic sports car 911 at the time.6 Deemed “a true Porsche for the age of electromobility,” the Taycan was produced at a new, carbon-neutral facility in Zuffenhausen in Stuttgart, Germany, using flexible, networked, 4.0 production technology. The electric sports car featured a line of seven models from a saloon to a coupe. Prices varied with the model and the options, from HKD1,184,0007 for a Taycan to HKD3,160,000 for a Taycan Turbo S with standard options. Customers could go to Porsche.com to “build” their own car before placing an order with the only authorized dealer. A quick browse through the Taycan Forum (https://www.taycanevforum.com/) yielded proud owners’ expressions of excitement. The online Taycan community and owners’ club boasted over 3,000 global members. Overwhelming Demand for Taycan The world premiere of Taycan took place on 4 September 2019, simultaneously in North America, Europe, and China.8 Immediately, it met overwhelming market success. In the year 2020, Porsche delivered 20,015 Taycans to customers around the world, despite production disruptions caused by COVID-19.9 Demand was strongest in the US, followed by Germany and the UK [see Figure 1]. The lead time for delivery of a Taycan ranged from three to six months, depending on the specifications and the market.10 4 The development of mission e variant and derivatives referred to the prototyping of Taycan. 5 “The Genesis of ‘Taycan,’” press release, Porsche AG, 9 April 2019, Porsche.com, https://newsroom.porsche.com/en/products/porsche-taycan-name-meaning-soul-spirited-young-horse-electric-sports-car- electromobility-emobility-16292.html, accessed 21 February 2022. 6 “The Genesis of ‘Taycan’”, press release, Porsche AG. 7 Since the mid-1980s, the value of the Hong Kong dollar has been pegged at HKD7.8 = USD1 through the currency board system, with a trading band of HKD7.75–7.85. 8 “World premiere of the Porsche Taycan: Sports car, sustainably redesigned,” Porsche AG, 4 September 2019, https://newsroom.porsche.com/en/2019/products/porsche-taycan-world-premiere-live-all-electric-sports-car-18445.html, accessed 11 January 2022. 9 “Porsche achieves robust level of deliveries in 2020,” press release, Porsche AG, 12 January 2021, Porsche.com, https://newsroom.porsche.com/en/2021/company/porsche-deliveries-2020-worldwide-23368.html, accessed 19 February 2022. 10 “How much lead time do I need to buy a new Taycan in the spring?,” Taycan Forum, 5 December 2021, https://www.taycanforum.com/forum/threads/how-much-lead-time-do-i-need-to-buy-a-new-taycan-in-the-spring.7923/, accessed 20 February 2022. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  3. 3. 22/725C Porsche Taycan: Service Failure and Recovery 3 Figure 1: Taycan Deliveries in 2020—Top 10 Countries11 Porsche in 2021: A Brand Stronger Than Ever At the centre of attention in all business units is the enthusiasm of our customers. It is not only the products but also the service and communication with our customers around the world that are so important for us. - Porsche press release12 Porsche AG delivered a record high 301,915 vehicles to its customers worldwide in 2021.13 The number represented an increase of 11% compared to 2020. China continued to be Porsche’s single largest market, with 95,671 vehicles delivered, a leadership position the country had held since 2015.14 Benefiting from the economic rebound, the company also enjoyed impressive growth in the US, selling 70,025 units of its prestigious fleet to North American customers. [For a breakdown of Porsche’s worldwide deliveries by region, see Exhibit 1.] Sport utility vehicles (SUVs) led the brand’s portfolio, with 88,362 units of Macan and 83,071 units of Cayenne sold during the period. Sales of Taycan overtook that of the model 911 in 2021, delivering 41,296 vehicles to worldwide customers. [For a breakdown of Porsche’s deliveries by model, see Exhibit 1.] In 2021, around 40% of the Porsche cars delivered in Europe in 2021 were electric, either plug-in hybrids or all-electric cars.15 Porsche (China) Motors Ltd. The year 2021 also marked the 20th anniversary of Porsche’s entry to China. Porsche (China) Motors Ltd., a subsidiary of Porsche AG, commenced operations in 2001 to support Porsche 11 Porsche AG, 2020 Annual and Sustainability Report, https://newsroom.porsche.com/en/2021/company/porsche-annual-press- conference-financial-year-2020-annual-and-sustainability-report-23936.html, accessed 19 February 2022. 12 “Porsche has the most satisfied customers,” press release, Porsche AG, 27 July 2016, https://newsroom.porsche.com/en/company/porsche-jdpower-market-research-2016-customer-satisfaction-top-places- 12764.html, accessed 25 February 2022. 13 “Porsche delivers more than 300,000 vehicles,” press release, Porsche AG, 12 January 2022, Porsche.com, https://newsroom.porsche.com/en/2022/company/porsche-deliveries-2021-worldwide-27003.html, accessed 15 January 2022. 14 “Porsche delivers more than 300,000 vehicles,” press release, Porsche AG. 15 “Porsche delivers more than 300,000 vehicles,” press release, Porsche AG. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  4. 4. 22/725C Porsche Taycan: Service Failure and Recovery 4 partners in sales and marketing, as well as after-sales servicing. By the end of 2021, there were 138 appointed Porsche Centres in Greater China distributed throughout the mainland, Hong Kong, and Macau. In 2018, the company announced a strategic upgrade to its China management team with an emphasis on “customer centricity” to support the growth of its largest market.16 A dedicated customer relations function was established in China to implement professional customer relationship management and meet individualized customer needs. As a practice, Porsche ran a customer survey within 30 days after the completion of service to gauge customers’ satisfaction and to gather input on how to exceed their expectations.17 “Porsche has the most satisfied customers”18 The claim that “Porsche has the most satisfied customers” was in the headline of a press release when the brand ranked highest overall in the industrywide Automotive Performance, Execution and Layout (APEAL) Study. APEAL was a benchmark study initiated by J.D. Power, a market intelligence company, which measured buyers’ emotional attachment and level of excitement with their new vehicles across 30+ attributes in a variety of experiences such as setting up and starting, driving feel, safety, infotainment, driving comfort, and fuel efficiency. The Porsche brand consistently claimed the top spot in the annual benchmark study for almost two decades. Market Rankings in China In addition to the APEAL Study, J.D. Power also tracked a range of industry benchmarks, such as the Dealer Attitude Study (DAS), Sales Satisfaction Index (SSI) Study, and Customer Service Index (CSI) Study and reported them in a country-specific context. In 2021, Porsche maintained its lead among luxury brands in the China APEAL Study, scoring 761 points compared to the industry average of 743 points [see Exhibit 2]. In terms of relationship with local dealers, Porsche came in 10th in the China DAS tracking, but it had the highest score among premium European brands [see Exhibit 2]. As for sales satisfaction, the brand stayed within the top three positions in the China SSI Study [see Exhibit 2]. Taycan: An Enthusiast’s Dream Turned Sour On a relatively warm spring day in March, Paul Chan was all geared up for his first encounter with his dream car, the Porsche Taycan. At the Porsche Centre Hong Kong, he was greeted by David Wong, a young energetic sales executive. Paul had read a lot about the new all-electric sports car and had checked reviews online and did his homework on what best suited his needs. He had his mind set on the Taycan, a much- anticipated dream car for enthusiasts around the world, for its affordability and its rear-wheel 16 “Porsche China management team is undergoing a strategic upgrade emphasizing on Customer Centricity,” press release, Porsche AG, 26 February 2018, https://www.porsche.com/china/en/aboutporsche/pressreleases/international/?lang=en&pool=china&id=2018-02- 26#:~:text=Gary%20Shone%20has%20been%20appointed,ultimately%20lead%20to%20customer%20delight, accessed 25 February 2022. 17 Porsche, “Porsche Service Satisfaction Survey,” https://after-sales.porschehk.com/en/general-maintenance/porsche-service- satisfaction-survey/, accessed 25 February 2022. 18 “Porsche has the most satisfied customers,” press release, Porsche AG, 27 July 2016, https://newsroom.porsche.com/en/company/porsche-jdpower-market-research-2016-customer-satisfaction-top-places- 12764.html, accessed 25 February 2022. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  5. 5. 22/725C Porsche Taycan: Service Failure and Recovery 5 drive. However, David arranged for him to test-drive the Taycan 4S, as the Taycan model was unavailable. Initial Specification After the test-drive, Paul was more than convinced and immediately placed an order with a nonrefundable deposit of HKD200,000. He was so excited that he lost no time and accepted the specification of options [see Exhibit 3] that David recommended. And the young salesperson assured him that an official receipt would be issued once the deposit, which was paid by credit card and a personal check, cleared. Second Specification Two days later, after thinking more about the options he had committed to, Paul decided to make some changes. So, he sent a revised specification to David via WhatsApp messaging. Specifically, he had removed the adaptive air suspension option and added the options of 14- way comfort seats, ambient lighting, and an electric charging cover [see Exhibit 3]. Another 10 days went by before Paul received a completed order form from David confirming the revised specifications via WhatsApp. Paul checked the details and confirmed the order was correct. With the order set, Paul waited anxiously for news on when his dream car would be delivered. After a few days, David called and explained the production and delivery timeline. He advised that production of Paul’s order was scheduled between July and August. Following that, the vehicle would be shipped to Hong Kong, and Paul could expect a delivery between October and November 2021. Paul was very excited; and in the meantime, he reminded David that he had yet to receive the official receipt for his deposit. About a week after the reminder, Paul finally received the invoice in the mail. As time passed, and as he read more about the Taycan, Paul was feeling unsure about two specific options missing from his dream car—the rear-axle steering and the adaptive air suspension. According to multiple sources, including the Porsche website, forums, and YouTube, in addition to much improved riding comfort, the adaptive air suspension had a special feature to raise the car. As the Taycan had very low clearance, this option would help avoid scratching the body when driving over a speed bump. The rear-axle steering helped reduce the turning radius or circle of the car by 60cm to improve ease of parking, which was important in Hong Kong where parking spaces were very tight. He asked David if it was too late to add the two options and was told the freeze date (deadline) for the final specification was 1 June 2021. By then, Paul was convinced that the two options were critical to his driving pleasure. So, in spite of the hefty additional cost of HKD93,496 (inclusive of a 132% tax), he decided to pay for it. Final Specification Two weeks prior to the deadline, Paul told David to add the two options, (1) adaptive air suspension and (2) rear-axle steering, to his order. A prudent customer, he asked if a new contract was necessary, but David assured him that he could make the changes to his order, and all Paul had to do was to sign an amendment form. A few hours later, David returned a final specification [see Exhibit 3] and asked Paul to review and confirm. In the same communication, he also asked when Paul could stop by to sign the amendment form. When Paul asked if the document could be sent via email for his signature, David replied that it was company policy to have the customer’s signature on a hard copy. Paul felt assured This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  6. 6. 22/725C Porsche Taycan: Service Failure and Recovery 6 to know that the dealership took customers’ revision of order specifications seriously and seemed to have a system to ensure that amendments were officially recorded and confirmed. The following day he went to the Porsche Centre and signed the amendment form. Like all new owners of a Taycan, he eagerly anticipated its arrival. By late June, he decided to ask David for an update. After some back-and-forth, David sent him a partial screen capture of the production schedule, reconfirming delivery in October or November 2021. In August, Paul’s existing car registration was due for renewal; he contacted David for another update.19 David confirmed that the delivery date remained unchanged, and production was completed. The following month, he contacted David twice for updates and repeatedly he got the same reply—October or November. Arrival of the Dream Car—Good News and Bad News One day in October, David called to inform him that his Taycan had arrived in Hong Kong and was being prepared for clearance. However, Paul’s order had not been delivered in its complete form. Due to a shortage of parts, his Taycan was delivered with a manual steering column and one key only. The electric steering would need to be retrofitted, and the spare key would be provided when parts were available. There was no date as to when that would happen. To make up for the inconveniences, Porsche offered Paul a HKD8,000 service voucher. Despite the missing parts, Paul was excited that finally he was one step away from taking possession of his dream car. He also appreciated Porsche’s offer of the service voucher as a gesture of apology and compensation for his inconvenience. It was time to scrap his old car in order to qualify for the one-for-one replacement scheme under the HKSAR’s first registration tax concession for EVs. After a little negotiation, the scrap sale was arranged, and the moment of truth arrived. A Roller-Coaster Ride Two days later, Paul arrived at the Porsche Centre to complete the outstanding paperwork before delivery, including a sales contract dated 4 October 2021 with the options listed and an insurance plan Porsche recommended. David pushed the documents to him, seemingly too busy to go through them with him. Instead, his focus was on a customer service evaluation card, which he asked Paul to sign for him while he told Paul that he would fill it out for him later. A little disappointed about the parts shortage, nonetheless, Paul was so overwhelmed that he decided to let David have his way. When Paul returned to his office, he took out the sales contract and checked the listed options against his specification. To his surprise, the last two options he had added were missing! He called David immediately to relay the issue. To his further surprise, David seemed totally unaware of this mishap and said he would check with the factory production team and get back to him. A few hours later, David called back and confirmed that the two options were indeed not included in the car that arrived in Hong Kong. Paul felt he had been cheated. By around 9 p.m., he received a message of apology from David, admitting that it was not Paul’s fault, but rather the dealer’s oversight in handling his order. David asked Paul to give him some time to 19 The HKSAR government offered a first registration tax (FRT) concession for electric vehicles in an attempt to encourage its adoption in the city. For Paul to maximize the amount of FRT concession, he would need to de-register and scrap his existing car in exchange for a new electric vehicle. Hence, he was hoping to get some kind of indication from David as to when his new car would arrive so that he could determine the length of renewal for his existing car registration. For details, visit the HKSAR Transport Department’s website for details, https://www.td.gov.hk/en/public_services/licences_and_permits/vehicle_first_registration/new_frt_concessions_for_electric_v ehicles_2018/index.html. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  7. 7. 22/725C Porsche Taycan: Service Failure and Recovery 7 come up with solutions to remedy the situation, and in the meantime, he had called the car- scrapping company to hold the deregistration and the scrapping of Paul’s old car until a satisfactory solution was found. Paul was completely devastated. He felt as if he had been on a roller-coaster ride. He trusted the Porsche brand and could not understand how the dealership could have misplaced his order, particularly when it was Porsche’s unique policy and strategy to offer and price its options individually for customers’ personalization. Nevertheless, he trusted the company would try its best to protect its reputation and find an appropriate recovery solution. Disappointment after Disappointment The next day, David called and confirmed that the two missing options could not be retrofitted. Hence, he proposed two solutions: (1) the company could place another order with the right specifications for Paul, but he was unsure how long it would take for the reordered car to arrive due to a backlog at the factory; (2) the company would provide monetary compensation if Paul would accept the car in its present configuration. David’s proposals, with the critical information such as lead time for a new order and the value of monetary compensation missing, left Paul with little to ponder. A day lapsed. David called to advise Paul that it would take 8 to 12 months to deliver the new order. As if knowing that this information would be a deal breaker, David came up with three more options for Paul’s consideration: 1. The dealer would install a Porsche car camera (valued at HKD10,000) if Paul was ready to accept the car as it was. The camera was an accessory Paul had expressed interest in during the sales process, and it was an option that did not have to be installed at the factory.20 2. Paul could accept and take delivery of the current order as it was. In the meantime, the dealer would place a new order with the specifications he required. When the new order arrived, Paul could then trade in his current Taycan as a used car with depreciation and purchase the new car that arrived with his specifications from the dealer. 3. Paul could cancel the purchase and have his HKD200,000 deposit back with no interest. None of these offers answered his needs, in Paul’s opinion. And none were reasonable, fair, or sincere, in the magnitude of things. Up to this point during the negotiation, to Paul’s dismay, no senior management or supervisor had reached out to him. David even began to undermine the value of the two missing options and tried to convince him that the adaptive air suspension was useless. To try to win him over, David offered Paul another test-drive of a new Taycan, the model that Paul ordered, which did not have the adaptive air suspension installed as a standard option. Since Paul had earlier test- driven the Taycan 4S, which had the adaptive air suspension installed as a standard option, David thought another test-drive might give Paul the experience without the option. As night fell, Paul was completely exhausted. He called David back around 7 p.m. and expressed his position on the situation. 1. He did not need to test-drive a car without adaptive air suspension. 20 David earlier advised Paul that the Porsche car camera might not be a good deal given its high price, and it only offered a front camera. Rather, customers opted for other popular dashboard cameras in the market with both front and rear cameras. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  8. 8. 22/725C Porsche Taycan: Service Failure and Recovery 8 2. He would not cancel his order. 3. He demanded fair and reasonable compensation from the dealer. After hearing Paul’s stance, David made an additional offer of an extended warranty together with the free car camera. Paul replied he would give it some thought. In the following days, there were more negotiations back and forth on the details of the extended warranty. Paul was feeling frustrated with David for his inability to escalate the matter. Eventually, David informed him that his manager agreed to only a one-year extended warranty. By then, it became clear to Paul that he had little bargaining power with a dealer that did not care about its service failure recovery nor had a functioning system to deal with such failures. He decided to accept the deal of (1) a one-year extended warranty (valued at around HKD14,000), plus (2) a HKD10,000 service voucher to be used for installing the car camera. He reiterated to David that he would like to have the camera installed when his dream car was ready for pickup. David assured him that the camera was in stock, and he would arrange the installation accordingly. Finally, Paul settled the payment, and the car-scrapping and deregistration process was reinitiated. The Last Straw A few days into November, Paul got a call from David telling him there was an issue fitting the car camera prior to delivery. As it turned out, the car camera, if installed within six months of its first registration, would be subjected to a 132% tax duty. In other words, if Paul wanted the car camera to be installed immediately, he would have to pay a tax duty of HKD13,200 out of his own pocket. Paul found it extremely frustrating and questioned the competence of his sales representative in doing his job. Left with an obvious but undesirable choice, Paul deferred the camera installation for six months. Five days later, his dream car was ready for delivery. While he was at the Porsche Centre, going through the final paperwork, it occurred to him that there was no mention anywhere of the one- year extended warranty that was agreed upon. Paul asked David about it and was told that he could trust the dealership to honor its promise to extend the warranty for another year after the standard two-year warranty expired. After so many mishaps and service failures, Paul couldn’t trust the company’s systems and procedures, so he insisted on a written commitment. Finally, a one-line remark was added to the sales invoice, indicating that an additional one-year warranty would be provided. From Customer-centric to Double-deviation Service Failure After Paul took delivery of his new car, he thoroughly enjoyed the experience of driving the Taycan, particularly its maneuverability, responsiveness, and instant pickup and acceleration. However, his overall driving experience was compromised, particularly when the car was running on bumpy roads or hitting a speed bump, because without the air suspension, the car’s suspension was rather hard. He also worried that he risked damaging the car’s undercarriage when he could not adjust the clearance without the adaptive air suspension. And, every time he had difficulties parking the car in a tight space, he regretted not having the rear-axle steering. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  9. 9. 22/725C Porsche Taycan: Service Failure and Recovery 9 About a month later, he received a call from customer relations, asking for feedback on his experience with the new car and the dealership’s service. In essence, it was a post-sales customer survey. Paul shared his satisfaction with the Taycan but expressed his utter disappointment with the dealership’s service. He told about the misplaced options in his order and was “amazed” that the customer relations representative had not heard about his mishaps. At a loss of what to say to Paul, the rep resorted to simply offering him a thank-you. After that, Paul did not hear from Porsche again. Eileen Chau, Head of Customer Relations, went through the monthly report on service satisfaction, a routine put in place to ensure the health of the company’s customer engagement. She was a veteran in customer service, having worked in the field of lifestyle and luxury products for over 20 years. She was brought in by the Porsche management to provide a fresh eye on some critical enhancement to the brand’s customer service design and delivery. As she plowed through the data, a flagged entry caught her attention. She decided to listen to the audio record. A new owner of a Taycan was airing his frustration about some critical options missing from the Taycan he ordered. To Chau, it was obvious that this was a case of service failure and unsuccessful recovery by the dealership. Chau contemplated why the service failed in the first instance. What had gone wrong in the system from accepting and confirming the customer’s orders to assessing customer satisfaction? What could the company or the dealership do to live up to the customer-centric promise? This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  10. 10. 22/725C Porsche Taycan: Service Failure and Recovery 10 EXHIBIT 1: PORSCHE AG WORLDWIDE DELIVERIES Geographic Distribution (units) January–December 2020 2021 Worldwide 272,162 301,915 Europe 80,892 86,160 Germany 26,152 28,565 America 69,629 84,657 USA 57,294 70,025 Asia-Pacific, Africa, and Middle East 121,641 131,098 China 88,968 95,671 Model Distribution Units 2020 2021 Macan 78,124 88,362 Cayenne 92,860 83,071 Taycan 20,015 41,296 911 34,328 38,464 Panamera 25,051 30,220 718 Boxster & 718 Cayman 21,784 20,502 TOTAL 272,162 301,915 Source: “Porsche delivers more than 300,000 vehicles,” press release, 12 January 2022, Porsche.com, accessed 15 January 2022. “Porsche achieves robust level of deliveries in 2020,” press release, 12 January 2021, Porsche.com, accessed 19 February 2022. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  11. 11. 22/725C Porsche Taycan: Service Failure and Recovery 11 EXHIBIT 2: MARKET RANKINGS IN CHINA 2A: PORSCHE RANKED HIGHEST IN 2021 CHINA APEAL STUDY Source: “Vehicles in China are Losing Appeal among Owners Born after 1990, J.D. Power Finds,” press release, J.D. Power, 19 August 2021, https://china.jdpower.com/en/press- release/2021-china-APEAL, accessed 24 February 2022. APEAL was a benchmark study initiated by J.D. Power, a market intelligence company, that measured buyers’ emotional attachment and level of excitement with their new vehicles across 30+ attributes in 10 different experience settings such as setting up and starting, driving feel, safety, infotainment, driving comfort, and fuel efficiency. The Porsche brand had consistently claimed the top spot in the benchmark study since 2005. 2B: PORSCHE RANKED 10TH IN 2021 CHINA DAS Source: “Average Auto Dealer Profit Rises 20% in China, J.D. Power Finds,” press release, J.D. Power, 22 April 2021, https://china.jdpower.com/en/press-release/2021-china-DAS, accessed 24 February 2022. DAS measured dealer satisfaction with automakers on a host of dimensions from training and sales and marketing support, to parts supply, vehicle ordering, and delivery process. Porsche ranked 10th in the 2021 China DAS Index, highest among the premium European brands. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  12. 12. 22/725C Porsche Taycan: Service Failure and Recovery 12 2C: PORSCHE RANKED THIRD IN 2021 CHINA SSI STUDY Source: “Mass Market Automotive Brands in China Exceed Luxury Brands in Sales Satisfaction for the First Time in 22 Years, J.D. Power Finds,” press release, J.D. Power, 30 June 2021, https://china.jdpower.com/en/press-release/2021-china-SSI, accessed 22 February 2022. The SSI study measured buyer satisfaction on seven dimensions, including online experience, communication before visit, reception, showroom visit, test-drive, deal, and delivery experience. Porsche came third in the 2021 China SSI Study. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.
  13. 13. 22/725C Porsche Taycan: Service Failure and Recovery 13 EXHIBIT 3: PORSCHE TAYCAN ORDER SPECIFICATIONS VEHICLE : TAYCAN BASE MODEL YEAR: 2021 Order No. Individual Equipment Initial Second Final Exterior Color R7 Neptune Blue Interior Color UA Two‐Tone Partial Leather Interior, Black/Chalk Beige Exterior 6XV Electric Folding Exterior Mirrors Drive Train / Chassis G1X 2‐Speed Transmission on the Rear Axle 1BK Adaptive Air Suspension including Porsche Active Suspension Management (PASM) ❌ 8LH Sport Chrono Package 0N5 Rear‐Axle Steering including Power Steering Plus ❌ ❌ Wheels 47I 20‐Inch Taycan Turbo Aero Wheels Comfort and Assistance Systems KA6 ParkAssist including Surround View 4F2 Comfort Access Interior 5KA 4+1 Seats QQ1 Ambient Lighting ❌ Q1G Comfort Seats in Front (8‐Way, Electric) ❌ ❌ Q2J Comfort Seats in Front (14‐Way, Electric) with Memory Package ❌ Interior Leather 3J7 Porsche Crest on Headrests (Front Seats) E‐Performance 2W9 Electric Charging Cover ❌ KB4 On‐Board AC‐Charger with 22kw NW2 Mobile Charger Connect EH2 Cable Connection between Control Unit and Vehicle: 7.5m 76H Charging Cable (Mode 3) Total Price in HKD (excluding tax) 738,331 740,031 780,331 Total Price in HKD (including tax) 1,480,928 1,484,872 1,578,368 Source: Provided by Paul Chan, the protagonist. This case is for use in the HSBC/HKU Asia Pacific Business Case Competition 2022 only.

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