Growth and History of the company

Formula One is a largely competitive industry with highly changing business environment. In this report special emphasis have been laid on the Ferrari Company and its role in emerging as a Formula 1 constructor. The F1 racing team of Ferrari was developed by Enzo Ferrari. However, Ferrari came in to conflict with Alfa Romeo who were creating racing cars under the name of Alfa brand. Since 1939, Ferrari started manufacturing its own spots race car known as Tipo 815 (Ferrari.com 2018). As a Formula 1 Constructor Ferrari have won 16 championships (Formula1.com 2018). The last award was won by Ferrari in 2008. Michael Schumacher had been the most successful driver for Ferrari so far.

Ferrari shares the vision of making the most excellent motors so that they can make the entire world dream with their racing spirit. Their mission is not only winning races with the best technological construction. Rather their zeal is to present the most memorable experience to the audience so that they can realise in full scape the excellence and the class of the brilliant engines of Ferrari. Among the resources, Ferrari give greatest value to the human resources because the company have the greatest belief in performing as a team which stresses in enhancing accumulated merit to develop competency as well as their professional growth (Ferrari.com 2018).

The resources and the capabilities of Ferrari is the reason why Ferrari have dominated the Constructor’s championship since 1970 to the middle of the millennium. In the context of Formula 1, physical resources are of utmost importance and for Ferrari, physical resources implies technical as well as designing skills related to chassis, gearbox and engine (Autoweek.com 2017). The experience of developing classic cars led Ferrari to innovate the 12 cylinder engine inserted in to a 312-T racing car (Ferrari.com 2018). The transverse gearbox that was an essential component of the 312T model had great deal of impact on increasing the balance and easing out the process of handling of the car. The component knowledge that went behind this design is easy to analyse. However it is very difficult to transfer because the component skills and the solo parts are firm specific and cannot easily fit in to the component modelling of the other Formula 1 constructers (Ferrari.com 2018). The architectural knowledge is another source of competitive knowledge for Ferrari. The model of efficient practice that was developed by Montezemola have been allowed each work group at the tracks to focus on specific tasks related to chassis, suspension, gearbox, engine and so on (Ferrari.com 2018). This helps the service teams of Ferrari to avoid conflict and providing great service that impacts the longitivity of the car on the race track. Besides that, they are also able to provide the best possible service in the shortest time span.

In the 58 seasons of Formula 1 held, the chief competition have been concentrated among 15 major constructors mainly. The team Ferrari have been the most successful of the lot winning 6 consecutive titles up till 2004. As Conti and Hoisl (2012), informs, after Ferrari, the most success have been gained by Red Bull from Austria as also Mercedes from Germany.

Vision and Mission of the company

Among the major number of suppliers, the highest supplier power is attached with the fuel or oil sponsors. As informed by Gutiérrez and Lozano (2014), particularly the financial strength added to the racing campaigns of Ferrari by Shell Oil ($406.5 million), and behind McLaren by Mobil ($402 million) and so on have determining factor behind the constructors’ long term success in the Formula 1 domain.

The buyers’ powers are a significant factor so far as revenue generation is concerned. However the audience presence of the Singaporean Grand Prix have been of supreme importance as this is so far the most glamorous F1 tournament. However, the race of the Monaco Grand Prix also have a different heritage. The ticket prices of these venue are high, and viewers come here from various strategic locations.

At present there are not many potential global race series that can substitute Formula 1. However threat have been posed to the industry by Ferrari who have exclaimed that they are not willing anymore to participate in the Race series because they are not satisfied with the price and/or revenue distribution process of the administration of F1.

Teams like Force India have been some of the new entrants among the players of Formula 1. In fact the administration of F1 is highly in favour of such new groups. As per the analysis of Hoisl, Gruber and Conti (2017), this is because, it requires high initial investment to join Formula 1 and not many entities show interest to join the firm. Hence the new entrants have the power to make the authorities to move in their desired direction.

The passion of becoming the most ideal ports car brand have made Ferrari what it is today. Ferrari had constructed the 166 Sports Engine much before the Formula 1 came in to existence. Jenkins (2014), have informed that compared to other competitive rivals in F1 like McLaren, Mercedes or Red Bull, Ferrari do not indulge in to core marketing. The company is only driven by their love for sports cars and manufacturing ideal sports cars. Whoever, have the game of racing in his or her spirit would crave to own a Ferrari once in a lifetime. Without adhering to branding of the merchandise, the 360 Modena, the F430 and the 55 Maranlla have been equally famous as prolific sports cars. However, the dazzling success of Ferrari have been pivotal to the huge hike in the sales rate of car manufacturer. In fact, Walker (2018), opines that the company also indulged in packaging the popularity of the brand and Michael Schumacher, the hero driver for Ferrari, together and thus they were able to sell 4300 sports cars in 2003 itself. In the US region, the country have found its major revenue channels with 30% of the global sales coming from USA, Canada and the neighbouring countries.

Team work and allied leadership are proudly the yardstick for success of Scuderia Ferrari in Formula 1. However the idealism of integrity and team work for Ferrari at the race track is not based on the foundation of strong friendship among the crew at the race track. The team of Scuderia Ferrari always stress upon having set clear and specified goals for every individual employed at the race event. Ferrari believes that setting clear goals actually helps the team to deliver absolute best on the track.

Resources and capabilities of the company

The partnership of Shell and Ferrari is another essential aspect of the winning culture of Scuderia Ferrari. Shell representatives have never been crucially intervening in the decisions that Ferrari takes on the field (Ferrari.com 2018). Nevertheless, the company have been an ardent follower and supporter of Ferrari like their uncountable fans. Akin to heartthrob fans, Shell have been passive follower of Ferrari. Their engineers have only ensured smooth run and lubrication for Ferrari, but never thrust decisions upon the team for implementation.

The recent war of ego and alter ego that have been waged between Ferrari and Mercedes is one big challenge as well as threat for the whole F1 circuit. These two are among the most potential investors among other constructors of Formual1. Mercedes had launched a complaint against Ferrari to the FIA claiming that their “double battery” layout gave them subtle undue advantage (Formula1.com 2018). The actual wrath of Mercedes is that over past few years, consecutively, a Ferrari car have dashed on to the side of a Mercedes. The engineers have claimed that there might be a deliberation on the part of the drivers of Ferrari.

In spite of the integrated team efforts on the part of Ferrari, there have been some major engineering loopholes which caused Sebastian Vettel to retire early before finishing the race even after staying at the second spot for a considerable time. Vettel suffered this engine issue which did not allow him for doing a timely lap and he was eliminated. The same issue was repeatedly faced by Raikkonen which prevented him from beginning the race. According to the opinion of the Formula 1 spokesperson there have been some technical gap or mal-management among the on grid engineers which yielded this outcome (Formula1.com 2018). Again, as an outcome of this, at the current position, Ferrari have been trailing by 145 points from Mercedes in the Constructor’s championship.

Ferrari at this moment should look up at the Monaco Grand Prix. At present, since there is not much time left for the Monaco Grand Prix, the company have to focus upon increasing the man power at the grid. Ferrari also needs to have a psychological mentor in their team who would help the team to overcome the nervous aura that the team have been indulged in to. The team of mechanics (on grid) are young and experienced and hence the number of panicky calls during the race are more. This confuses the racers as well and they presume that he do not have sufficient and adequate back up from his team and the propensity to lay safe creeps in. Lastly, the drivers should indulge in more practice sessions to become adaptive with the latest cars of Ferrari.

Ferrari is a company that have significant control over the race circuit. It is among the few companies including the likes of McLaren and Mercedes, who dominate the race track. I suppose that it is true that owing to the high market strength of companies like Ferrari, they have extensive fan base which is an asset for the FIA. Competitors like Renault or Red Bull do not have similar contribution towards the revenue channels of FIA. However, analysis of the empirical resources leads me to conclude that Ferrari is current lacking the authenticity of their original leadership and sporting culture. The company which never required external marketing channels for acquiring fan base, are now in the news because of their dual strife with other competitors. The engineering unit that shown exemplary on grid accomplishment are now torn with mechanical issues. One glowing example is the recent elimination if Vettel before the start of the race. Hence, according to me, it is time for the upper management to make some operational changes at the executive level because it is the brand fame upon which the loyalty of the fans and the worldwide customers highly rests.

Reference List

Autoweek.com, (2017). FERRARI BOSS: 2018 F1 CAR WILL EITHER BE A ‘MONSTER’ OR ‘GARBAGE’, Autoweek.  Available at: https://autoweek.com/article/formula-one/ferrari-boss-2018-f1-car-will-either-be-monster-or-garbage [Accessed: 20 September 2018]

Conti, A. and Hoisl, K., 2012. The speedy road to success: knowledge overlap in R&D teams. Proceedings of the DRUID.

Ferrari.com, (2018). About us. Available at: https://www.ferrari.com/en-EN [Accessed: 20 September 2018]

Formula1.com, (2018). 2018 Constructor Standings: Ferrari. Available at: https://www.formula1.com/en/results.html/2018/team/ferrari.html [Accessed: 20 September 2018]

Formula1.com, (2018). Overcoming Vettel in Germany will be ‘serious challenge’ – Hamilton. Formula One Official. Available at: https://www.formula1.com/en/latest/article.overcoming-vettel-in-germany-will-be-serious-challenge-hamilton.5eJnV3Ts6WSYEo8CeaSOmo.html [Accessed: 20 September 2018]

Gutiérrez, E. and Lozano, S., 2014. A DEA approach to performance-based budgeting of formula one constructors. Journal of Sports Economics, 15(2), pp.180-200.

Hoisl, K., Gruber, M. and Conti, A., 2017. R&D team diversity and performance in hypercompetitive environments. Strategic management journal, 38(7), pp.1455-1477.

Jenkins, M., 2014. Innovate or imitate? The role of collective beliefs in competences in competing firms. Long Range Planning, 47(4), pp.173-185.

Walker, K. (2018). The challenges facing Formula One in 2018. ESPN. Available at: https://www.espn.in/f1/story/_/id/22449789/the-challenges-facing-formula-one-2018 [Accessed: 20 September 2018]