FORMULA ONE CONSTRUCTORS

Case Study: The Formula One Constructors

Case Study: The Formula One Constructors

By Mark Jenkins

Introduction

This case highlights the sources of competitive advantage in a dynamic marketplace where the context of Formula One (F1) motor sport is put into focus. This case enables students to gauge how strategic management can be applied to different sectors of this highly-technological context of motor sport. It shows how F1 teams created a steady place for themselves where they led with a distinct competitive advantage in all hemispheres. The case is broadly categorized into five parts, which starts with a description of the history of F1 together with the following sections that describe four periods of dominance by F1 teams. This assignment will discuss the organization, identify its concerns and issues, introduce relevant theories of strategy management for its resolution, and analyze those strategies to provide reasoning for strategic moves. Formula One is a highly competitive sport that utilizes the expertise of leading engine and motor chassis manufacturers to enhance the performance of a team and its drivers. Some of the prominent, strategic management concepts that we will present in this case include

Porter's (1980) Generic Strategies for Competitive Strategies.

Porter's (1980, 1985) Five Forces Model for Industry Analysis,

Porter's (1980) Value Chain, and

The Resource Based View

Following is a brief overview of different manufacturers for each of the leading Formula One teams to provide an introductory orientation about different companies/organizations that are committed to sustaining F1 motor sport context:

[edissertations.nottingham.ac.uk/1259/1/07MAlixmr6.pdf]

Identify and critically evaluate the strategies pursued by Ferrari (1975 - 1978)

Ferrari is the passion of motor racing enthusiast due to its glorious heritage and exclusive style in motor sports. It is the oldest of the Grand prix that is still running and playing an essential part for motor racers in F1 (Wernerfelt, 1995, 171-174). Founded by Enzo Ferrari, it continued to grab a special place in the hearts of racers and a contract with Ferrari was always viewed to be an exclusive edge against competitors. Ferrari has always adopted a differentiation strategy, and the period in the mid-1970s has been most happening for the brand (Rainer, Turban, 2009, 38-39). While other manufacturers continued to make contracts for the best chassis and engine supplies, Ferrari did everything on its own. According to his founder, car's engines are the most crucial parts of the cars, one that has to be given the most attention while manufacturing. The period between 1972 and 1973 indicated a loophole in the strategies that were pursued. Enzo's “divide and rule” policies created confusion and the team members could not perform using this car.

It can be assessed from the case that things went wrong after the policies adopted by the owners of Ferrari could not seem to be successful in creating a winning edge (Porter, 2008, 200). In order to remove internal politics and interference in polices, the chairman Montezemolo defined distinct areas of responsibilities which proved to be the turning point for Ferrari followed by adversity (Wernerfelt, 1995, ...