1. Implementation of Key Performance Indicators as a Means of
Corporate Learning: The Porsche Case
Strategic issues:
 Declining international sales
 To get competitive advantage over other car companies
Background of the case:
Porsche AG is one of the world’s leading sports car manufacturers and was facing immense
competition from its rivals in the same industry. The company executives were working hard
to find ways to stay competitive and successful in the industry.
They realized that the huge amount of data that they have with them through the network of
dealers can be of great use. The company decided to convert these data into profits by
implementing an innovative tool which would help in providing sufficient knowledge and
learning. Company decided to use the term Porsche Key Performance Indicators (KPI)
instead of the original name “Balanced Scorecard”, since the company tried the tool at a
different department before and failed to introduce.
Goals of Balanced Score Card:
KPI is a tool which measures the performance and suggests solutions to improve the
performance. The objective of implementing KPI in Porsche was to increase the international
organizational sales of the company with a team led by Mr. Schlegel, an expert on Balanced
Scorecard tool (KPI). The purpose of this KPI was to analyze the performance, sharing the
vast source of data and comparing the different dealerships all over the world. As mentioned,
KPI contained four main categories:
 Financial
 Internal business process
 Customer
 Learning/ growth
The use of this tool was to know about the performance of internal processes of the company,
to learn about customer needs and the satisfaction level and also to know about the growth
opportunities that the collected data may lead to. This would help Porsche to improve long-
term strategies related to the dealership which would ultimately lead to improved internal
processes. This would also help in indicating the problem areas for future improvements.
Phases:
The project team decided on a step-by-step approach and started with a few pilot markets to
implement the KPI. Involved Porsche dealerships were in Italy, France and UK. Within
Porsche European region, these three areas are the major markets where the dealerships were

2. on different levels of sophistication and scales. They all had the basic IT infrastructure in
accounting and communication technologies.
The problem faced by Porsche was the resistance from the employees in including Balanced
Scorecard as a tool to turn dealership knowledge into profits as the concept was new and not
yet widely accepted. To be a successful tool, proper flow of communication was required
alongwith proper training of the dealers telling about the indicators to be reported and used
for comparison.
For this software was developed by the consultancy firm and proved to create many
advantages such as:
 Focusing on long term strategic action which prevents short sightedness revealing the
potential for improvements.
 Two-way communication between the dealership and the headquarters during all
phases improving long-run profitability.
Even though the company recently introduced a new model and training resources were
mostly being used for that, it should have had the funding available for the training needs of
KPI project, which is a strategic initiative. Being a first mover is sometimes a disadvantage
since it requires more time devoted to training in different levels. In the case, regional
managers too had to be trained to provide their dealerships with consultation in respect to
KPI. One of the challenges here is to make individual (dealer based) knowledge into
institutional knowledge. Previously the data available at the level of dealers were not used
effectively and it is important to convince them and create buy in to share the data and
knowledge properly and continuously.
Submitted by:
Gaurav Khatri
PGFA1117
PGDM (G) Sec.A