The Strategies Pursued by Ferrari between 1975 and 1978 - Coursework Example

The strategies pursued by Ferrari between 1975 and 1978 were tremendous making the team able to achieve championship and renowned reputation in the Grand Prix and F1 constructors’ team in general. One of the most renowned strategies employed by Ferrari between 1975 and 1978 was revolutionizing engine design. Ferrari came to the point of creating elegant handling and power advantage of the engine. This remarkably created a great impact on the team’s performance considering that the other teams are trying to come up with highly advanced or revolutionized engine design in order to be a cut above the other. This specific strategy of Ferrari paid off due to its ability to supplement a large technical team that was dedicated to engine design and development. Another important strategy utilized by Ferrari was giving of high value for its reliable technical solutions. In particular, Ferrari tried to translate the driver’s senses into reliable technical solutions. After all, the drivers can actually say a lot of things about the entire performance of the car and its engine. In line with this, Ferrari is significantly on the right course in order to obtain its competitive advantage. With a highly reliable technical team, Ferrari can always have the great chance to maximize its potential in translating the needs or opinion of the drivers about the car’s general performance. Another important strategy used by Ferrari was its investment in highly talented drivers. Car-racing activity requires a highly and specially skilled driver due to its high level of risk and pressure towards excellence. In the end, it was not just the whole engine and car design that would matter, but the drivers in great detail. Thus, this was one of the major reasons why Ferrari was able to translate driver’s senses into reliable technical solutions. 2. Ferrari faced problems in the early 1970s because of some important strategic reasons. Their entire performance was based on its strategic activities done in order to plunge in the competition. However, such strategies they implemented in 1970s were not so remarkable compared to what they applied in between 1975 and 1978. Ferrari in the first place rarely attended car racing and focused so much time on car manufacturing. In this regard, Ferrari tried to rely on media and his advisors for information leading to being politicized most of the time. Furthermore, his first love was motor racing. Thus, there is a great possibility that lesser enthusiasm will be given to car racing even that the said activity gave a great amount of money for funding of his business. However, Ferrari was good at sourcing funds for his business. The merger with Fiat proved to be remarkable for outsourcing funds, but substantial pressure was packaged with it especially that competition for engine design proved to be a substantial trend in the market. Ford Motors was able to come up with Ford DFV engine which particularly dominated F1. Since Ferrari was good at giving focus on car manufacturing there was a good chance to dominate in the competition. However, due to age and health condition, Ferrari could not stand long to manage the entire business. Thus, the only good thing left was to hire for new technical in-charge and a new team boss. That was when Mauro Forghieri and Luca di Montezemolo were hired in the team. This paves way to a good starting point for the entire management of Ferrari and his team. Thus, it was clear enough that Ferrari just needed to have organized the management team in order to give so much focus on whatever is necessary in its entire business. From the start, Ferrari was losing focus on some major aspects of its business and one of them was forgetting to organize a highly organized and managed team. 3. The key elements of a successful F1 team include the utilization of human resource, cutting-edge technology and integrate them into one big marketing activity. The first element was the creation of drivers’ association through F1 and its drivers’ world championship activity. The team succeeded because this primarily achieved highest TV audience in the world, which was far greater than the Olympics and World Cup soccer in 1970s. This means higher revenue for sponsorship. This paved way to another important element for the success of F1 team. Another key element was the acceptance of F1 to be involved in marketing activity. Through F1 car manufacturers can promote their latest produced cars so as well as to test them. As a result, the leading-edge technology was integrated in the car racing activity and it won the masses via a TV sporting event. This eventually tried to tie up marketing activities that in the end, provided for the great success of the entire F1 team. Another key element of the success of F1 team was its strategic policy. Since F1 team was an integration of different teams, there were different strategic policies implemented in it. In this regard, there was an existing competition involved which produced diversified strategic approach for the benefit of the team. There was a sense of differentiation strategy within each team. In line with this, there were variations involved in the strategic management leading to the acceptance of car racing as a TV sporting event. In line with this, car producers have diversified options to choose from to what team they would test or promote their newly-produced product with. 4. In the case of Ferrari, there was a strong focus given on differentiation. At the start, the said team tried to manage to be different from the rest of the teams which led it to go try for trial and error. However, along the way things did not run smoothly. There were ups and downs for Ferrari. However, the attempt to be the best paid off and Ferrari eventually reached its potential for its competitive advantage. McLaren on the other hand attempted to go for strategic alliance and long-term contracting. At the start, these were giving good fortune for McLaren and the team but eventually things were focused on them. This led to not covering the other detailed aspects of the competition such as what Ferrari did when it invested its time towards the very detailed aspect of the business which was translating drivers’ idea into a strong technical solution. Williams on the other hand was another team that attempted for focus differentiation. Using technological advancement, it was not easy to come up with a good output just like with Ferrari because everything should be translated into the best technical support or solution. Eventually, things did not run smoothly with Williams using the above-mentioned strategy but eventually the team revolutionized technology at the later part. 5. One of the issues which were strategically flawed faced by each team was in line with generating financial resources. There were less focused strategies given on this issue considering that most of the teams were focused on car manufacturing and the car-racing activities. Generating financial resources should be well-balanced and it should be generated through various strategies such as outsourcing, strategic alliance, merger and the like. Furthermore, there were cases about mismatched use of technology leading to trial and error. Most of the teams were focused on design not considering what would be the best technology to consider. Eventually, this specific strategy led to Ferrari being able to accept and re-evaluate its technology. Thus, there is a need to re-evaluate and assess the new technology prior to employing it. Another point is not giving detailed consideration on the opinion of the skilled drivers. This should have been the mere focus of each team prior to designing car and employing the best technology. 6. There were different strategies used by each team. These involved business, corporate and relationship strategies. It is important to consider that these strategies eventually failed at certain point because there was lack of strategic policy analysis, evaluation and control. For instance, balanced scorecard was never mentioned as used by each team in order to assess their performance on financial, customer, learning and growth and internal business process. 7. One of the essential elements of a successful F1 team is management control. Another element would be having clear management perspective. Finally, included in the list should be interaction with both internal and external environment. The management structure should be structured by aligning the entire business, corporate and relationship activities of each team. 8. The first identified team funding source mentioned in the case is merger. The merging team of Ferrari and Fiat led to the full advantage of the former as presented in the case. In line with this, Ferrari enjoyed a greater privilege of enhancing its car racing activity by using sophisticated technology and specialized technical team. There was also Mclaren Honda combination and Williams funded by Head. Another source of funding was sponsorship. The long-term sponsorship of MacLaren with Philip Morris could be one of the best examples. Eventually, outsourcing of funding would not be easy in the case of F1 constructors. One of the best options that they should try is to go for a contract with the third parties as their main sources of funding. This is to ensure that they will be funded at the appropriate time they deserve. Sponsorship should not only be confined between constructor team and their respective sponsors. It should be direct with the media. This is to ensure a higher level of funding and sources of income. Read More