Fluent Essays

Regarding the marketing mix of 4 Ps, which P Ferrari does most effectively and which P it does not? What kind of moves did Ferrari take to improve them? case_3_ferrari.pdf Unformatted Attachment Preview Ferrari Expansion The Prancing Horse Born in 1898, Enzo Ferrari achieved his boyhood ambition of becoming a racing driver. Legend has it that on his first victory at the 1923 Circuito del Savio he was presented the prize by Countess Paolina Baracca, the mother of first world war fighter pilot Francesco Baracca who had used an image of a prancing horse on the side of his plane. The countess offered Ferrari the horse logo so that he could use it for his racing cars, an offer he gratefully accepted. However, Ferraris career as a driver was soon behind him and in November 1929 he created Scuderia Ferrari (SF) based in Modena, between Parma and Bologna in northern Italy. SF focused on the preparation and competition of racecars for enthusiasts, thereby creating one of the first specialist motorsport companies. They exclusively raced Alfa Romeo cars and in 1932 Alfa Romeo outsourced all its motorsport activity to be run by SF. 1932 was also the year that Ferrari used the prancing horse logo, a black horse on a yellow background - the historic colour of Modena, to symbolize Scuderia Ferrari. The partnership with Alfa Romeo proved to be very successful, winning 144 out of 225 races in the period up to 1937. However during the late thirties the German Mercedes and Auto Unions began to dominate racing and following the second worldwar Alfa Romeo split with SF and Enzo Ferrari went on to build his first car. The Ferrari 125 made its debut in May 1947 having been designed and developed over the previous two years. Most of the design and development had focused on the creation of the Ferrari supercharged 12-cylinder engine, the first in a long line of Ferrari dodici cilindri engines. The Ferrari 125 entered the new F1 championship when it began in 1950, but it was not until 1951 that a Ferrari won a Grand Prix and in 1952 driver Alherto Ascari won the drivers world championship. The early fifties were of unparalleled success for Ferrari and the other Italian teams of Alfa Romeo and Maserati who were all based in northern Italy. Italy were now the world leaders in motorsport engineering with designs which focused on supercharged 4.5 litre engines positioned in front of the driver, their blood red cars a reflection of the earlier days of grand prix racing when cars were colour coded by country of origin with British racing green for the Vanwalls and BRMs, and the silver Mercedes and Auto-Unions from Germany. The 1950s were also a tragic time for Ferrari, overall safety standards were poor and many drivers died in Ferrari cars. As a consequence Ferrari often had to endure a great deal of criticism from the press, Ferrari had lost his son Dino in 1956, and for many this loss hardened his attitude to life and to the loss of drivers. The role of the driver was simply to do a job - bring victory to the red cars of Ferrari and if they did not there was always another to take their place. He was also very frugal about drivers wages as former world champion Phil Hill remarked: The Old Mans line was very much that you drove for Ferrari for the honour of it. And he wasnt kidding. Similarly it was also claimed that Enzo liked to manage the situation so no particular driver was able to gain the credit for success, as the following observation by former driver Stirling Moss illustrates: I never drove for him, but Ive no doubts that in my day he would allow different drivers to win by giving them better cars sometimes, thereby giving the impression that the driver didnt count for anything - that it was the car which had won. Ferrari himself had a rather enigmatic approach to running the company. After the death of his son Dino he very rarely left the Modena area, and hardly ever attended races, preferring to spend his time either in the factory or at the Ferrari test facilities. He relied on the Italian media - who had always shown a keen interest in Ferrari - and his closest advisors for information which often created a highly political atmosphere in the team. 1 However, the Italian supremacy was challenged towards the end of the fifties with the British constructor Cooper developing small 2.0 litre cars which positioned the engine behind the driver and whose designs focused on maximizing mechanical grip as opposed to the emphasis on engine power preferred by the Italians. Cooper dominated the world championships of 1959 and 1960 using the bought in Coventry Climax engine which had been originally designed to power water pumps for fm engines. They were followed by Lotus who, like Cooper, produced lightweight agile cars with high levels of mechanical grip. Ferrari initially resisted the trend being pioneered by the British constructors whom he referred to as assemblatori or garagistes. He defended the engine layout of the Ferrari with the analogy that the horse had always pulled, not pushed, the cart. Although not an engineer himself, the designers who Ferrari employed (Alberto Massimino, Gioachino Colombo, Carlo Chiti and Mauro Forghieri) had learnt their trade as engine designers and so the design of a new car would always start with the engine. Ferrari himself often referred to the song of the twelve underlining the distinctive high pitched note of the Ferrari engine. However by 1960 the dominance of the British cars was clear, and Ferrari had to build a lighter rear-engined car, which they did using a highly effective V6 engine. The Dino 156 (1.5 litre, V6) or shark nose dominated 1961 and gave Ferrari a further world title. However, the advances made in chassis construction by other teams had meant that they were increasingly noncompetitive and in 1964 the Ferrari 158 was launched with a similar monocoque type chassis to the Lotus 25 of 1962. In 1964 Ferrari tried out the Flat 12 engine developed by Mauro Forghieri, it was this 12 cylinder unit that was seen to be the future for Ferrari. Ferrari renaissance: The mid-seventies In the late sixties Ferrari merged with Italian automotive manufacturer Fiat. This was, in effect, a benign acquisition, with Fiat acquiring 40\% of the equity in Ferrari, thereby providing a huge injection of cash to support R&D activities. This allowed the construction of a private Grand Prix circuit at Fiorano close to the SF factory at Maranello. The technical team used this facility to engage in a period of intensive development focusing on the flat 12 engine. The new ownership and influence from Fiat meant increased resources, but also increased pressure for results. In the early seventies F1 was dominated by the Ford DFV engine. Built by Cosworth Engineering near Northampton and funded by the Ford Motor Company, the DFV was Fls first purpose built engine it was light, powerful and relatively inexpensive. In 1968 the engines were available for 7500 each and were fully capable of winning a Grand Prix. This enabled the British constructors, who specialized in chassis design, to become increasingly competitive. In 1971 and 1973 every Grand Prix was won by a car using a DFV engine. The impact of the DFV engine was that it made the cars both very light and very powerful, at a time when tyre technology was relatively primitive, this left the designers searching for other ways to increase grip. The answer came from aerodynamics with aircraft type wings being used to create downforce or aerodynamic grip allowing the cars to both enter and exit corners at vastly increased speeds. During this time Enzo himself had been suffering from ill health, now in his seventies he made the decision to appoint a team manager to run the day-to-day activities of the F1 team. Luca di Montezemolo was a 25-year-old lawyer who was also connected to Fiats Agnelli dynasty. In addition Mauro Forghieri had been recalled to Ferrari in 1973 as technical director. In 1975 the fruits of Forghieris creative ideas and the intensive testing at Fiorano were exemplified in the new 312T which featured a wide low body with a powerful flat 12, 12cylinder engine and a revolutionary transverse (sideways mounted) gearbox which improved the 2 balance of the car making it handle extremely well. The engine was originally designed by Forghieri in 1964, and when asked why he didnt take the opportunity to copy the V8 DFV his response was unequivocal: I used the 12 cylinder because it is the story of the factory (at Maranello). We make 6 and 8 cylinder engines for our cars, but the 12 is the best. Every engineer that comes to Ferrari, first wants to work on engines and second the 12 cylinder engines. There are economic reasons as we already have many of the parts and components, but most importantly it is the history of Ferrari. Although the new car was not ready until the season had already started, driver Niki Lauda, with the support of team-mate Clay Regazzoni, was able to easily secure both the drivers and constructors world championships. The Ferraris dominated the 1975 season. With their elegant handling and the power advantage of the engine, they were in a class of their own. This unprecedented run of Ferrari success continued through to 1978 and in 1979 when they won both the drivers and constructors championships, but perhaps their greatest moment was in 1979 when Ferraris finished first and second at the Italian grand prix at Monza. Sending the fanatical Italian fans or tifosi, and the Italian press into a complete frenzy. Ferrari, the end of an era: 1980-1990 However in 1980 312T5 car was outclassed by the competition. New innovations in aerodynamics brought the ground effect revolution, pioneered by Lotus and quickly adopted by Williams and Brabham. Here the underside of the car featured two venturi, or channels either side of the driver. These were aerodynamically designed to create a low pressure area under the car which sucked the car to the track allowing faster cornering. Sliding strips of material or skirts were used to create a seal for the air flowing under the car. Whilst the Ferraris engine was one of the most powerful it was a flat 12 meaning that the cylinders were horizontal to the ground creating a low and wide barrier which gave little opportunity to create the ground effect achieved with the slimmer V8 DFV engines. In 1978 Alfa Romeo had launched a V12 engine to replace their flat 12 for this very reason. No such initiative had been taken at Ferrari who were concentrating on a longer term project to develop a V6 turbocharged engine. Autosport correspondent Nigel Roebuck commented on this change of fortune: Maranellos flat-12, still a magnificent racing engine, is incompatible with modern chassis. Villeneuve and Scheckter were competing in yesterdays’ cars. The lowest point came in the Canadian Grand Prix when the reigning world champion, Jody Scheckter, failed to qualify his Ferrari for the race, a bit like Italy failing to qualify for the soccer World Cup. Once again the full wrath of the Italian press descended on the team. In the mid-eighties more and more investment was poured into the Italian facilities but with no dramatic effect on performance. A key problem was that new developments in aerodynamics and the use of composite materials had emerged from the UKs motorsport valley. Rather than a valley this was an area to the west, north and south of London where the major British FS teams were located. These teams bought in their engines from specialist suppliers such as Cosworth, Renault, Honda and Porsche. They therefore focused their expertise on the design and development of the chassis which featured advance materials such as the carbon composite monocoque (a term for the one piece chassis) which had been pioneered by McLarens John Barnard in the early 1980s. These teams also used sophisticated moving ground wind tunnels which were available at local universities in Cranfield, Southampton and Imperial College London to perfect their aerodynamic performance. In 1984, British designer Harvey Postlethwaite became the first non-Italian Technical Director of Ferrari. In 1986 British designer John Barnard was recruited to the top technical role. 3 However Barnard was not prepared to move to Italy as he felt that his technical team and network of contacts in the UK would he essential to the success of his position. Surprisingly Enzo Ferrari allowed him to establish a design and manufacturing facility near Guildford in Surrey that became known as the Ferrari GTO or Guildford Technical Office. The fact that Barnard was defining the technical direction of Ferrari meant that he became increasingly involved in activities at both sites. However the geographical separation between the car and engine departments led to development of various factions within Ferrari, making Barnards job increasingly difficult. In 1987 on arrival at Maranello he ordered a ban on the consumption of wine at the midday canteen, there was uproar with the workforce seeing this as an insult to their professionalism. Enzo Ferraris death in 1988 created a vacuum which was filled by a series of executives from the Fiat organization for a number of years. It was written into the contract that on Enzos death Fiats original stake would be increased to 90\%, this greater investment led to attempts to run Ferrari as a formal subsidiary of the Fiat group. Barnard became frustrated with the interference and politics of the situation and left to join Benetton in 1989. Ferrari had recruited world champion Alain Prost to drive for them in 1990, but whilst the GTO designed 1990 car was highly competitive (an example of this Ferrari 641 now resides in New Yorks Museum of Modern An), the organization was falling apart and in 1991 Prost was fired by the Ferrari management for criticizing the car and therefore the sacred name of Ferrari. Former driver Patrick Tamhay commented on the situation as follows: No ones in charge anymore. When the Old Man was alive the buck stopped with him. Maybe he took some curious decisions - but at least he took them. Im not saying that Ferrari will never win again, but the fabric of what the name meant has gone. There are so many layers of management, so many bosses reporting to bosses, until ultimately it gets to Gianni Agnelli (Chairman of Fiat). Transforming the Prancing Horse However at the end of 1991, Fiats chairman Gianni Agnelli appointed Luca di Montezemolo as CEO with a mandate to do whatever was needed to take Ferrari back to the top. Montezemolo had been team manager for Ferrari during the successful period in the midseventies, subsequently he had taken on a range of high-profile management roles including running Italys hosting of the Soccer World Cup in 1990. di Montezemolo accepted the role on the basis that Ferrari and in particular, the racing operation, was independent of Fiat. I have not been in the Fiat management stream for ten years. Maranello is another world and has to be treated as such. In an article in Autosport he described the situation as follows: After I arrived last December (1991) I spent five months working to understand the situation. To understand the manpower; to understand the potential of the car; Once I had absorbed all this I decided to approach the whole situation in a completely different manner. Ferrari had become an inflexible monolith of a company which was no good for racing. As a result I decided to divide it into three small departments: future developments and special projects in the UK under John Barnard; the engine department in Maranello under Paolo Massai and finally the Scuderia Ferrari under Harvey Postlethwaite which is the place where we build the cars and manage the team. I also wanted to build up a strong relationship between our UK facility and Italy in order to take full advantage of the F1 Silicon Valley in England for chassis development and specialist sub-contractors while still harnessing the huge potential of Maranello. 4 When asked why he was repeating the GTO initiative which Enzo Ferrari had set up with Barnard and which had ultimately ended with Barnard leaving and taking the facility with him, Montezemolo had a very clear response: I think that the GTO concept of Enzo Ferrari was a super idea. Unfortunately, at the time Ferrari was very old and the situation was managed in a bad way. But the fundamental idea was very good. For me the approach is slightly different. First of all, I am in charge of the company with full powers, so I can take a decision without anyone else taking a parallel initiative. I take my responsibilities and I want the people in the company to follow my ideas. If they follow, I am very happy. If they don’t then there are many other doors, many possibilities available to them outside Ferrari. My objective is to create a smaller racing department which contains less bureaucracy, of course, there will be a lot of discussion between the engine and chassis departments. In Maranello we have a huge organization geared to building cars, but I want to take advantage of the UK facilities, and for a world-wide company like Ferrari it is certainly not a scandal to have an affiliate in the UK. If you want to nuke pasta, then you have to be in Parma, I want to make a sophisticated F1 project so I want to be involved in England. Then it is up to me to put everything together. In August 1992 John Barnard signed a five-year contract with Ferrari to design and develop their new cars. In an effort to avoid a them and us situation between the UK and Italy a number of Italian technical people were recruited to work for Barnard in the UK, and a number of English technicians were redeployed to Maranello. At the launch of the 1992 car, Luca di Montezemolo broke with tradition, and introduced a new numbering system based on the year a car would be racing, an approach which has been followed from 1992 up to the championship winning F2003-GA (in recognition of Fiats Gianni Agnelli who passed away in January 2003). Prior to this the numbering of many Ferrari cars had been based on the characteristics of the engine - the 312 of 1971 representing 3.0 litre 12 cylinders, the 126C4 of 1984 representing a 12 V angle with 6 cylinders, and C standing for Compression or turbo-charging. At Ferrari we have always devoted and will continue to devote, great attention to racing, racing is part of the history, the culture and the traditions of this company. We live in a country which, especially in recent times, people have yelled and complained a bit too much. We hope that the only noise around here will be our engine as it sets new lap records at Fiorano. We are looking for a revival here, and with an eye to the future we have tried to put together a group which combines young engineers, many of them with the highest qualifications, and people whose enthusiasm and abilities will make a notable contribution. We have a lot of work to do, we have a lot of ground to make up on the opposition. We have code-named the new car F92A to demonstrate that we are turning a new page in our history? When asked about drivers in 1992 he also gave some indication of his thinking: the main priority is the new organization. We are lucky because it is a big challenge to offer a driver the chance to help re-establish Ferrari to a competitive level. I want a driver who is motivated and prepared to work with us. Motivation is everything in a driver, as Niki Lauda reminds us! In addition to the structural changes, di Montezemolo had also brought in some familiar faces from Ferraris successful period in the mid 70s, driver Niki Lauda acted as a consultant to the team and Sante Ghedini took on the role of team manager. With an Englishman heading up design he followed this up with the appointment of a Frenchman, Jean Todt, to handle the overall management of the team. Todt had no experience in F1 but had been in motorsport management for many years and had recently led a successful rally and sportscar programme at Peugeot. 5 Driver ... Purchase answer to see full attachment