FErrari

ORGANIZATION AND CORPORATE MANAGMENT

YARI BRUGNONI, IMIM 2014-2016

introduction

INTERNAL ANALYSIS EXTERNAL ANALYSIS

•  Work philosophy and Environmental attention

•  Strategic Decisions •  Supply Chain

•  Competitors and Customers’ Analysis

•  Environmental Analysis •  Market Analysis

HOW LONG ARE YOU WILLING TO WAIT FOR DRIVING YOUR FERRARI ?

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Company overview

 

 

•  MISSION

•  HIGH INVESTMENTS AND INNOVATIONS through R&D of race cars:

•  ETHICAL AND SOCIAL RESPONSABILITIES

Ferrari is an eco-friendly company that cares about the well being of its employees

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history

•  1929: Scuderia Ferrari was founded by Enzo Ferrari as a race team

•  1947: presentation of first Ferrari’s model. It will win the Rome Grand Prix

•  1969: Fiat purchased 50% of shares

•  1988: manufacturing of F40

•  1988: Enzo Ferrari died and Fiat acquired 90% of the company

•  1991: Luca Cordero di Montezemolo as new Chairman

•  2014: L.C. di Montezemolo has been replaced by Sergio Marchionne

•  15 F1 Driver’ s World titles and 16 F1 Constructor’s World titles, 9 victories in the Le Mans 24 Hours,8 in the Mille Miglia …

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Ferrari dna

SUSTAINABILITY

•  Reduce polluting emissions (-42% CO2)

•  Produce energy & renewable energies

•  Improve safety and quality of life of its employees

INNOVATION

•  150 patents registered

•  Integration on road cars of F1 technologies

•  Benchmark for the entire automotive industry

DESIGN

•  Mix of innovation, extreme technologies, endure quality and design

•  Make cars recognizable maintaining its traditional values

PEOPLE

•  2,900 employees: 40% white collar, 60% blue collar, with an average of 38 years.

•  Formula Uomo philosophy

•  High level of knowledge: 70% WC has a degree, 60% BC has a diploma

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Strategy development

CENTRALIZED STRUCTURE •  Centralization of decision-making among the highest managerial levels

•  Guarantee constant high quality standards for each vehicle

•  No tolerance for defects à precise guidelines to be followed

•  Workers high trained and well prepared

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Supply chain

•  Unique manufacturer factory, 6 Regional Office that manage the distributors’ network

•  Exclusive Distribution model à low-volume (7,000 units) & high price

•  Introduction of new ERP system (INFOR LN) to reduce the delivery time from 18 to 12 months

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Resources & capabilities analysis

RESOURCE-BASED VIEW (RBV)

Differentiation

Niche marketing

High Performance and Technology

Quality and Service

Vertical Integration

Synergy

Breakthrough Resources

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Prescriptive or emergent ?

Ferrari’s strategic management is a mix of prescriptive and emergent approach:

RACE CARS SPORTS CARS

•  Unclear objective every year

•  Unpredictable environment

•  Extreme relevance of human needs

•  It follows its Mission

•  Objective defined in advance

•  High and constant investments

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Environmental analysis

•  The global sale of vehicles presents a stable increase in the future (up to 101,4 million in 2019);

•  luxury cars market will grow quicker than the car market as a whole;

•  Rapid and different changes, depending on geographic areas;

•  US has been Ferrari’s first market (+9% 2013), while Europe were down of 13%;

•  Automotive industry life cycle has reached its mature phase;

•  Medium-high degree of market turbulence à environment or safety restrictions, economy changes and political decisions.

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Pestel analysis

•  Environmental policies

•  Employees’ contracts

•  Technological pioneer

•  150 machineries’ patents

•  Increasing attention on CO2 emissions

•  Renewable resources

•  Fuel emissions

•  Passengers’ safety

•  Products adaptable to any weather and climatic conditions

•  Economic crisis

•  Growth of emergent countries

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5 porter’s forces

POWER OF BUYERS

•  Medium-High

•  Can choose between many brands/substitutes products

•  Increasing access to information

POWER OF SUPPLIERS

•  Medium

•  Few suppliers match luxury brand requests

•  High switching costs

ENTRY THREATS

•  Low

•  High investments and technologies

•  Glorious history of many companies

•  Government regulations

SUBSTITUTIONAL THRETS

•  Medium-High

•  All the means of transportation

•  Status-products, as Harley Davidson

RIVALRY

•  High and Intense

•  Similar car manufacturers aiming at the same market segmentation

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Swot analysis

STRENGHTS •  Investments on

Innovation&Technologies

•  Brand recognition

•  Combination of design&performance

•  Attention to weel-being and satisfaction of its employees

WEAKNESSES •  High performance vs. environmental

policies

•  Low-volume production

•  Waiting list of 18 moths

•  Specialized employees à critical resource and high costs

OPPORTUNITIES

•  Growing economies/new rich people

•  Diversify the market

•  Increase the limit of units produced

THREATS •  Restriction of emission norms

•  Many substitute products

•  Economic uncertainty

•  Competitors are expanding their products' range

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competitors

1929

2,900

7,000

230,000 $

$2.2 billion

1931

15,000

128,000

48,500 $

$11 billion

1963

1,029

2,122

182,000 $

$560 million

•  Founded in

•  Employees

•  Prod. Volume

•  Starting price

•  Revenues

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Conclusion

•  Combination of high quality, performance and design

•  Low volume/high price strategy

•  Exclusivity of the brand

•  Second-hand market

•  Formula Uomo and attention at environmental aspects

•  Marchionne’s changes: 10,000 units and focus on F1

•  Lead time reduction (18 à 12 months)

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END

ANY QUESTIONS?

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