Case analysis 2: Ferrari

About Ferrari
Ferrari S.P.A. is an Italian sports car manufacturer based in Maranello, Italy. Founded by Enzo Ferrari in 1929, as Scuderia Ferrari, the company sponsored drivers and manufactured race cars before moving into production of street-legal vehicles as Ferrari S.p.A. in 1947. Throughout its history, the company has been noted for its continued participation in racing, especially in Formula One, where it has had great success.

1. What were the major internal and external factors forcing Ferrari to renew its strategy in the period 1980-1990? New innovations in aerodynamics which brought the Ground Effect, sliding strips of material or skirts which used to create a seal for the air flowing, being failed to qualify Ferrari for the race by Jody Scheckter in Canadian Grand Prix, New developments in aerodynamics and the use of composite materials which emerged from UK motor sport valley which caused to hire British designer as a first non-Italian technical director in Ferrari in 1984 and 1986, were major external factors that affect Ferrari company to think about renewing strategies. Enzo Ferraris death in 1988 created a vacuum which was filled by a series of executives from the Fiat Company for a number of years that caused increasing up to 90%fiats stakes and some problems in racing team between drivers were internal factors that forced Ferrari to renew its strategy in the period 1980 to 1990. 2. What were the major revolutionary changes that shaped Ferraris competitive position between 1990 and 2004? Which evolutionary changes took place in the same period of time? What seems to be the dominant perspective at Ferrari at this specific moment in time when it comes to strategic change?

The most important and main revolutionary change comes back to August of 1992 that John Bernard signed a five year contract with Ferrari to design and develop their new Page | 1

cars. In that time they tried to avoid a them and us situation between United Kingdom and Italy to recruit number of Italian people to work for Barnard in the UK and a number of English technicians to work for Maranello. This technician shifting between UK and Italy resulted in 1992, prepared the new line of products for Ferrai combined with good designs, performance and engines. After this revolutionary, many evolutionary took place. Such as; changing numbering system based on characteristic of the engine, structural changes in Ferraris racing team with developing human resources, introducing V10 motor engines to compete with Renault, entering to commercial partnership with tobacco giant Philip moris to use their Marlboro brand on the Ferrari, replacing red color with bright orange colour and partnership with Shell. In my opinion there is two dominant prospective. First, Ferrari set long term commercial arrangements with coordinated marketing strategies for commercial partners to maximize the investments profit. And second, is the relationship between engine design and th other critical areas of aerodynamics and chassis development which Paolo Martinelli (Engine Director) recognized that there was a need for change which was supported at the top of the organization and that real progress could be made by working closely with the other areas of the car.

3. How can Ferrari maintain a good fit with its environment in the future by combining both the strengths of revolution and evolution and without suffering from the negative consequences of these seemingly opposite ways of strategic change?

in my opinion, Ferrari should maintain and keep current level of its brand on racing competition because, structurally Ferrari produces sport cars with powerful engines and it has only selected one segment in car industry. And for being successful without suffering from negative effects of strategic changes, they should keep their brand and their cars on the top of the sport cars brands. And this can achieve buy innovative designs and best performance by engines. As we see the case, Ferrari has raised and fall diagram in its business areas. But the main and major factor that Ferrari becomes a famous brand is that Page | 2

they kept their strategies during the time specifically in racing, although it has pain points on it. Team workings, partnership with other brands, being innovative in aerodynamics and electronic parts of cars and making long term perception, are key factors that can maintain Ferrari in this industry.

4. What do you consider the major barriers change faced by Enzo Ferrari?

The most important and effective changed by Enzo Ferrari was giving allowance to British designer (John Barnard) to establish a design and manufacturing facility near Guildford in Surrey that became known as the Ferrari GTO or Guildford Technical Office. This decision filled the vacuum of carbon composite design and aerodynamic that specified to three parts of England. Although there were geographical separated parts between body and engine of the cars but this decision made another opportunity to improve their products in competitive areas with other companies in industry.

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