Franchise - Culture and Structure - Essay Example

It goes on to use the McKinsey 7-S model to examine the components of the business. The paper ends with the Strength-Weakness-Opportunity-&-Threat (SWOT) analysis of the company and concludes with a decision on the appropriateness of buying a Ferrari franchise. Organizational Design Marranello, a town near Bologna in northern Italy has been the home of Ferrari since the 1940s (Ferrari Factory Website, 2011). The central location at Marranello is made up of 45 buildings which houses the 3,000 employees of Ferrari who range from factory workers through to the top level management of Ferrari.

Components relevant for the manufacture of Ferrari cars are imported from all over the world and assembled at the Northern Italian plant. From there, the various cars are shipped to different parts of the world where they are sold through agents and outlets. Ferrari dealers have three different packages that they can sell to customers: Ferrari Genuine, Ferrari Power & Ferrari Approved. In considering purchasing a franchise, the options available include the reselling of these three Ferrari brands.

Ferrari Genuine includes the sale of genuine spare parts for Ferrari cars. Ferrari Power is an insurance package and some related financial activities that ensure that Ferrari users are protected in cases of losses. Ferrari Approved on the other hand seeks to co-ordinate the interests of various Ferrari owners and link them with the company. Aside these three main brands, Franchise sellers can also provide various racing related services and sell some other Ferrari owned brands like fuels and racing related brands that have commercial value.

The business environment of Ferrari has unique components and systems that work together to make it a leading racing and luxury car manufacturer. Goold & Campbell (2002) stated that there are nine components of organizations that define each and every business. They argue that a business is made up of structured systems and components that are defined and laid out by the owners of the company. Aside these defined systems, there are emergent issues that affect the design of the organization. The nine components eventually lay down the definitive structure for a business. 1. Strategy: A business needs to operate in a given market in order to reach a given pool of consumers.

In this quest, there are some competitors that might also target the same markets. In the case of Ferrari, it has evolved over the years to become a company that desires to stay at the forefront of research through maintaining a strong position in the motor-sport industry (Davenport & Beck, 2008). In other words, Ferrari desires to target upmarket clients around the globe to produce cars that have the best and most modern inputs and systems at premium prices. The emergent of new ideas in the industry helps them to change their ways of delivering their services at different point in time.

The strength of the Ferrari strategy lies in the price of their cars, which are in the millions of dollars and are valuable even years after purchased because they easily become antiques. As a franchise owner, one will expect to sell these expensive cars to customers around the world that comes with high profit margins. In other words, a single sale that a franchise owner makes will bring in profits that hundreds or thousands of ordinary cars that a normal car dealer will make. These end users often use the cars for races which earn a lot of revenue since it comes with the sale of television rights and the