Ferrari case

BUS420 WEEK 3 STRATEGIC CHANGE

“TRANSFORMING THE PRANCING HORSE: FERRARI 1950-2004.”

Case study Questions:

1. What were the major internal and external factors forcing Ferrari to renew its strategy in the period 1980-1990?

Internal Factors: useless resources, old mentality, factions within Ferrari (GTO x Engine Departments), organization was falling apart – vacuum in the leadership. Focus just on engine, power of the car (the competitors thought about the body of the car, chassis, aerodynamics, engine etc). Cash necessity. Fiat’s stake increased to 90%.

Paradigm: Italian pride.

External Factors: Failed to qualify for the race, wrath of the Italian press (pressure from Press), Competitors efficiency and sophisticated technology, focus on flat 12.

Time line analysis (you can make relations)
External
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Internal

2. What were the major revolutionary changes that shaped Ferrari’s competitive position between 1990 and 2004? Which evolutionary changes took place in the same period of time? What seems to be the dominant perspective at Ferrari at this specific moment in time when it comes to strategic change?

It seems to be the continuous renewal perspective: gradual, steady and constant, continuous adjustment, persistent transient state and gradual development.

The revolutionary change:

➢ Structure – divide into three small departments (future development and special project (UK); engine department in Maranelo and SF, the place where they build the cars). Investments in other areas of technology beyond mechanical knowledge (dominance), like aerodynamics and electronics.

➢ Strategic alliances with Philip Morris and Shell to cut costs.

➢ The union between engine design and the other critical areas of aerodynamics and chassis development. In a nutsheel, team work.

Evolutionary change:

➢ Engine design, aerodynamics and chassis development;

➢ Mentality: From