Generic Competitive Strategies of McLaren, Williams, Ferrari and Red Bull - Case Study Example

Name: Subject: Professor: Date: Formula 1 Case Study Generic Competitive Strategies Company Cost Leadership Differentiation Focus McLaren Unlike other racing teams, McLaren began as racing car developer with no involvement in the generation of road cars. McLaren worked with innovators who were able to use cheap material and produce the highly competitive McLaren. Since most of the money came from the circuit races, McLaren were able to partner with Honda who were producing Powerful engines and reliable drivers such as Senna to win consecutive championship that gave them a lot of money for development and expansion. McLaren used unique technology in the development of the MP4, a feature that kept them ahead of the competition. They were able to use powerful engines supplied by Honda and the use of well experienced drivers. McLaren focus was on racing cars which they developed powerful cars enough to win championship and attract more sponsorships. The management of Ron Dennis enabled McLaren to develop and based on his marketing and negotiating skills that open up room for small teams to find sponsors. Williams Founded by Frank Williams the team was managed through unorthodox style with almost being declared bankrupt. Cost leadership was achieved through sponsorships from Saudi Airlines thereby enabling them to develop superb cars. The approach to driver selection was always use affordable drivers while using high performance F1 cars. Frank Williams was able to develop on ideas that were introduced by other racing teams and build on them. Their uniqueness made them win the constructors team award three times consecutively. The focus of the team was on development of high performance cars using unique technology basically designed by Williams himself. The uniqueness meant that they were developing advantages by seconds compared to their counterparts. The focus of the team was also to develop high performance engines. Ferrari Once a legendary icon in the series, Ferrari was struggling in the 1980s. Ferrari manufactures their own engines, a strategy that took them to glory. They were able to make powerful engines using their own affordable resources. This however led to their struggle because they were not good at manufacturing other parts such as the suspension and had only won a few races. Ferrari used their own manufactured engines. Other competitors in the series suffered because they were not able to develop their own engines. The powerful engines and the use of new technicians in the field led to the development of new technologically enhanced and developed cars. The talent of Schumacher as their driver gave them a competitive edge Ferrari’s focus was to centralize all their activities in Italy to for easy inspection and cost effectiveness of the entire production process. Red Bull Red bull drinks owner indulged in F1 the time multiple number of people were watching formula 1 and saw it as an opportunity to make money. With acquisition of the Jaguar racing team, Red Bull team was developed in 2004. Most of the costs used to acquire the team came from the larger franchise that was selling drinks. The team preferred using young drivers until things got out hand and the pressing need to win competitions. The development of a wonderful hospitality center at their first competition defined their style and changed the face of Formula one competition. The aim of the team was to develop a strong car to win the championship which they did with Sebastian vettel as their driver. The acquisition of McLaren’s chief engineer indicated that they dedicated to constructing a powerful car that could win the constructor’s trophy. They have won it three times in a row apart from Ferrari, McLaren and Williams. Comparative industry structure analysis McLaren The dominance witnessed by this company where they won 15 out the entire 16 race championship was due to proper strategic planning. With a leader with good managing and negotiating skills, McLaren gained a competitive advantage by signing deals with superb engine producers. The partnership with Honda who produced powerful engines at the time meant that McLaren remained ahead of the competition. The diversification into producing road vehicles was well timed when they produced the fastest road car and sold it for expensive prices. Despite the price tag, McLaren F1 car was still marketable due to its uniqueness as the fastest road car. Their lack of preparedness of finding another engine manufacturer as Honda cost them their leadership strength thereby failing to maintain their leadership position. However, the acquisition of the top formula 1 drivers indicated that the team was willing to pay better to win the championship (Jenkins 583-5). Williams With a financial dwindles throughout its period and the accident of its owner, the company was almost declared bankrupt. However, due to the persistence of its owner in producing technologically enhanced components enabled them to remain competitive in the championship and the acquisition of the top constructor’s award. Williams worked with junior engineers who were effective in designing and building on the ideas that other companies had failed in. The acquisition of top drivers such as Senna meant that Williams was paying its staff well and had quality cars to attract strong around their company. The approach by Williams was to invest more in the car than in the driver as was the tactic famously used by other teams such as McLaren. The tactic of building a stronger car paid off by winning the championship midway the season (Jenkins 585-7). Ferrari After the death of the owner, the shares of Fiat in Ferrari doubled. The politics of management led to the departure some chief engineers such as Bernard who was located in England to help the company solve its aerodynamic problems. With superb engine dynamics, Ferrari was already ahead of the competition who mostly struggled after few years to located suitable engine manufacturers. The recruitment of Schumacher by Ferrari was a game changer for them. The relocation of the England facility to Italy maintained good work flow. Shell’s financial support helped Ferrari regain its glory. The long term technological and commercial deals signed by Ferrari enabled them to generate enough capital for them to stay in the competition. The team was also willing to pay good incentives enabled them to work with the best staff to produce both superb road cars and championship cars (Jenkins 587-8). Red Bull As the latest entrance in competition, the famous beverage company acquired Jaguar’s racing team and introduced a new style that catapulted them to the top and win constructors awards three consecutive times. After acquiring the team in 2004, their first European competition was in 2005 where they wanted to launch in a new style. Their entry redefined paddock standards in the championship. Its approach was more youthful compared to other teams. With target of creating a superb car and winning the championship, Red Bull manager recruited McLaren’s chief designer who was being paid better than most of the drivers. His unique working style made significant changes at Red Bull. The approach to use engines from Renault paid off with the team winning its first constructors trophy in 2010. The capacity of the company grew with to 550 employees (Jenkins 588-9). Pestle Analysis McLaren Politically, McLaren was safe since its entry in the championship with no major national barriers. Economically, the team was being managed by a man who had good negotiating skills to cut deals with sponsors and potential investors. McLaren was able to sell its fastest road going car at most the most expensive price, this indicated that people liked the products produced by McLaren. Technologically, McLaren had chief engineers with wonderful ideas. The idea of using carbon composite material originated from the team. The combination of technology from different companies such as Honda, the superb engine manufacturer with the ability of McLaren producing superb bodies enabled them to build strong cars. Legally, McLaren has no court cases or violations of any laws. Environmentally, the technology used by the racing teams was not that eco friendly since most of them were using larger V8 engines. The regulations provided by motor sporting body planned to reduce engine sizes to v6 with turbo support in 2014 (Jenkins 583-5). Williams Williams has not experienced major political obstacles however his personality made him part ways with fantastic drivers and engineers. His management style was autocratic. Economically, the company’s graph dwindled with near bankruptcies. However, sponsorship deals from Canon and R.J Reynolds revived the company to developing a winning car. Williams associated himself with Renault in the quest of developing strong engines after Honda had left. He participated in helping Renault in their championship and allowing his name to be on Renault’s Clio special edition. Technologically, Williams had a car that had seconds advantage over the others. Their dominance in 1992 was characterized by major factors such as the use of semi-automatic gearboxes, the drive by wire technology and the active suspension system. Technology was therefore a major strength for Williams with no major legal battles recorded (Jenkins 585-7). Ferrari Politically, the company was threatened after the death of its founder. With a facility located in England and the rest of the plant located in Italy, coordination brought problems with the chief engineers located in England leaving and being recalled back again. Economically, Ferrari makes a lot of income from selling road vehicles and the incentives from the formula 1 championship. Technologically, Ferrari concentrated on building stronger engines that gave them early victories before aerodynamics technology caught up with them. The technology used on their road vehicles has also been superb in marketing their unique quality of brands. The engine is the main reference point for the Ferrari. The company has agreed to produce v6 turbo charged engines that are more environmentally friendly. On the part of the road cars, the company plans to produce a hybrid that cuts down on fuel consumption (Jenkins 587-8). Red Bull Red Bull has no political battles since its start in 2004. The economic background of the company came from the Red Bull beverage company. The company associated itself with a wide range of sports such as air racing and motor racing. Technologically, Red Bull was still lagging behind by the time it entered the first competition but the need to win races pushed them to acquire McLaren’s top designer. Together with the approach to use Renault engines, the approach paid off in 2010 when the company won their first major constructor’s award. The approach of using a youthful approach and using a new style in the formula 1 championship paid off with the team gaining recognition through major opponents. In terms of environmental protection, the Renault engine plant has the ability and is still committed to producing v6 engines that are boosted by turbo chargers. No major legal battles have been recorded with Red Bull (Jenkins 588-9). Works Cited Jenkins, Mark. “The Formula 1 Constructors: capabilities for success.” PDF File Read More