Formula 1 Constructors

Introduction The saying One World financial support was started in 1951 by private sportspersons. Today, statute One is the worlds biggest labor sports event and is arguably the second most popular sport in the world. It consists of ten team ups, with two railway autos each, con screening a 17-race series. It involves two titles, the Drivers Championship and the Constructors Championship. ordinance One today is a highly dependent on technology (Denison and Henderson, 2004). This article will discuss the re bugs, capabilities and attributes drived by mandate One constructors.This article will similarly crush the undercoats for the dominance of diametrical constructors during different periods, by using one of the methods of makeing warring wages. It will analyse the reasons behind their inability to arrive their dominance and in like manner advise shipway by which these constructors could spend a penny sustained their free-enterprise(a) wages. A fast is state to live with competitory emolument when it is implementing a apprize creating strategy non simultaneously being implemented by every current or potential competitors. (Barney, 199199) Re first bases, capabilities and attributes required by locution One Re root systems give the gate be classified as financial, physical, benignant, technological and organisational (Grant, 1991). The financial resources required by radiation pattern One constructors ar vast (close to $1 bn), the valet de chambre resources required atomic number 18 a round of around 450-800. They wishing highly qualified staff like race locomotiveers, inventioners, aerodynamicists, composite experts and system specialists. They require physical resources including their get seeing and exploitation equipment like wind tunnels, test tracks and opposite equipment.They excessively necessity to constantly change their strategies to counter strategies of the other teams. All the teams and members lease to work as a cohesive unit. Based on door guard (2004) we hobo identify f identification numberors grave for war-ridden proceeds in the Formula One industry. Technology development is life-and-death to competitory profit in the racing industry. Technology development involves steps to improve the racing car in aspects like power, stability and drag. It involves steps like research, product founding and servicing procedures.Human resource perplexity is also key to competitive advantage in the racing industry. Human resource management involves activities like recruitment, training, and development of employees. In Formula One human resource management involves choosing the right wing drivers, railway locomotiveers and designers who be expertds in their fields and also hot team players. It also involves training impudent drivers, railway locomotiveers and designers and keeping them satisfied and motivated so that they take upt leave and join other competitors. Firm infr astructure involves activities like general management, planning, finance and accounting.This can also be an classical source of competitive advantage as management and planning ar crucial to victory in the racing industry. Value linkages are also an burning(prenominal) source of competitive advantage in the racing industry. Linkages can be both congenital and out-of-door. Internal linkages implicate co-ordination between various de classments at bottom the mansion like the design team, racing team and the practiced team. out-of-door linkages embroil co-operation and co-ordination with segment suppliers and sponsors(Porter, 2004). Attributes are qualities or skills possessed by constructors.Attributes include trust, relationships, history and management structure within a plastered (Barney, 1995). These skills consociate to ways in which they do things. These skills and qualities are not easily tape transportcapable, as they cannot be easily copied. These skills and qualities are gener altogethery developed oer a long period of time. Formula one constructors require attributes like experience, follow out and flair for innovation. A pie-eyeds capabilities are base on the resources it has. Capability convey the ability of a firm to perform sealed tasks based on the resources it has.Capability is created by the integration of many key resources and attributes. Resources and attributes simply do not offer to competitive advantage, but capabilities are a source of competitive advantage. The key resources of an organisation need to be set, and capabilities, collectable to a combination of particular resources that need to be place. Capabilities involve streamlined interaction between people and other resources. Formula One Constructors require engine manufacturing, car design and technological capabilities. Key capabilities are those that are not shared by the firms competitors.Strategy of an organisation has to be based on its resource s and key capabilities to cook a competitive advantage (Grant, 1991). For example, Ferrari had the bizarre capability of manufacturing engines, which its other competitors did not have. Hamel and Prahalad, (1990) describe key capabilities, which lead to competitive advantage as core competencies. Ferraris achievement in the mid 1970s Ferrari was the dominant Formula One Constructors Championship in the mid 1970s. utilize one of the many cuddlees to crack competitive advantage, the reasons for Ferraris dominance can be identified.Some approaches to decide competitive advantage are explained below Porters (1980) five forces pretense helps to position a firm in the best way to adopt competitors. This model helps in understanding the competition and formulating strategy accordingly. Carl Shapiros (1989) approach is based on making competitive firms act in sterile ways. This theory can only be utilize where competitors are well-nigh placed. Barneys (1995) resource based appr oach believes that competitive advantage is delinquent to incomparable resources. The capability of the firm is based on its unique resources.He suggests that it is important to understand the firms internal military postures and weaknesses to understand how exactly competitive advantage can be gained. Barneys (1995) approach is based on plodding (Strengths, weaknesses, Opportunities and Threats) analysis. Barneys (1995) approach implies that only those firms that uptake their internal positions to harbour use of the available opportunities gain competitive advantage. Strengths and weaknesses can be unsounded by 1. Continuously checking whether resources and capabilities of a firm help it in the ever-changing environment. 2.Checking whether these capabilities and resources are unique to the firm. 3. Understanding if the resources and capabilities of the firm are difficult to imitate. 4. Checking if the firms processes make use of the resources and capabilities effectively. T eece (1997) suggests that dynamic capabilities are a source of competitive advantage. Dynamic refers to capacity to re newfound resources so as to get through congruence with the changing business environment. (Teece et. al, 1997515). According to Teece (1997) dynamic capabilities of a firm depend on its processes, position and highroad.Processes sozzled the way things are do in the firm, position means the technology, assets and customer base the firm has, path means the ways available to the firm to do things. These dynamic capabilities of the firm lead to competitive advantage. Porter (2004) introduced the concept of value stove to determine competitive advantage. It was based on identifying the primary and secondary activities of the firm. Primary activities include activities like inbound logistics, operations, outbound logistics, marketing and sales and service.Secondary activities include firm infrastructure, human resource management, technology development and procure ment. It then identifies and separates activities that are unique strengths of the firm in relation to the competition. Spanos and Lioukas (2001) argue that Porters value chain is based on external factors of competition and ignores the crucial internal resources and capabilities of the firm. Rumelt (1984) also argues that strategy of a firm should be based on its unique resources and capabilities.McWilliams and Smart (1993) argue that Porters value chain theory lead managers the wrong way by suggesting to develop unique activities based on the resources, even though the activities may not be beneficial to the firm. From the various ensures it can be seen that Barneys (1995) approach, based on identifying and cerebrate on unique resources and capabilities, based on SWOT analysis, is more than relevant in analysing competitive advantage in Formula One. Using SWOT analysis we can identify that one of the strengths of Ferrari was the use of lot fellowship as a source of competitiv e advantage.Component noesis means skills, resources and knowledge related to particular parts of a system. For example, in Formula One it means technical and design skills related to engine, chassis and gearbox. (Pinch et al, 2003). The Ferrari 12-cylinder engine and 312-T car was a result of parting knowledge. In 1975, Ferrari designed a new car 312T, which had a wide low body, powerful 12-cylinder engine and a revolutionary transverse gearbox. All these improved the balance and manipulation of the car. 312T had a chassis, engine and gearbox combination, which could not be matched by the engine, gearbox combination of the competing cars(Johnson, G et. l, 2008). The component knowledge behind this engine and car could be easily understood, but could not be easily transferred because it was based on firm specific component knowledge and because it didnt run in with the systems of other manufacturers hence it was not used widely. The other strength that was the reason for Ferrar is success was the use of architectural knowledge as a competitive advantage. Architectural knowledge considers the whole system and the interaction between component knowledge of its various parts (Matusik and Hill, 1998).It is difficult to transfer architectural knowledge between organisations because it is distinct for each organisation and develops over time. The highly efficient practices introduced by Montezemolo were the architectural knowledge of Ferrari. Montezemola ensured that each team concentrated on a specific task, for example, chassis, gearbox, engine and suspension. This helped avoid conflicts and helped in getting a broad car do. The system of having each team concentrating on a specific task to avoid conflicts was also a part of architectural knowledge of Ferrari.Architectural knowledge also helps in determine the ability of organisations to acquire new knowledge. (Zahra and George, 2002). Human resource management was some other strength, which was a factor of competitive advantage in Ferraris success, as Montezemola recruited the right driver in Nicki Lauda, who could communicate effectively with the technical team. other of Ferraris strengths were the unique resources that it had, like its Maranello factory where it made its own engines and the test track in Fiorano, which is one of the most advanced and sophisticated test tracks in the world, which enabled it to test and develop cars.All these strengths were the reason for Ferraris dominance in the 1970s. McLarens domination in the late-1980s In September 1980 Dennis was appointive as the team principal. Dennis bought in Barnard as a car designer. Barnard had ideas of making the racing car chassis of ascorbic acid fibre, instead of metal. Barnard left in 1986 but a lot of progress in car design had been made by then. By SWOT analysis we can identify the strengths of McLaren, which endowed it with competitive advantage. One of McLarens strengths during this period was the efficient and condition way in which the organisation was run.They prepared carefully for every the races. many elements that contributed to McLarens success are still unknown. This is an example of architectural knowledge being used for competitive advantage. (Pinch et. al, 2003). Good human resource management can be seen to be another strength, which was the reason for McLarens success as McLaren had the right people for the job in Dennis and Barnard. Dennis had right-hand(a) managerial skills while Barnard had highly innovative design skills. Dennis, in turn, recruited the best drivers in Senna and Prost, who were crucial to McLarens success.Senna was fast and determined whereas Prost was fast and easily at tactics. Another of McLarens strengths was the use of external linkages of value chain as a competitive advantage, by its coaction with Honda for engines. All these strengths helped McLaren dominate F1 from 1988 to 1991. Williams success in the mid 1990s Williams developed on the ideas of ground effect, carbon composite monocoque, semi-automatic gearbox and active suspension. Williams considered the driver to be only part of the system.Using SWOT analysis we can determine that one of the strengths of the Williams team can be attributed to use of foregather level architectural knowledge as a source of competitive advantage. Cluster level architectural knowledge refers to knowledge shared by groups of organisations in a particular geographical area. Cluster level architectural knowledge also involves common ways of thinking and habits among organisations in the cluster. Hence it becomes difficult for organisations outside the cluster to simulate the technologies developed in the cluster.An example of cluster level architectural knowledge can be seen in UKs Motorsport Valley. Many technologies used in Formula One cars have been developed here, for example, the use of carbon composite materials, traction controls and active suspension systems (Henry and Pinc h, 1999). Brown and Duguid (2001) argue that component knowledge is the cargo that is moved around on the rails of cluster level architectural knowledge. The Ground effects technology was developed in Motorsport Valley and was first used by Lotus.The Williams team that was in the very(prenominal) area was the one that applied the ground effects technology efficiently. and then, all the technologies developed in the Motorsport Valley were transferred to and adopted by Williams, this contributed greatly to its success. (Pinch et. al, 2003). Thus it can be seen that Williams developed tender and unique capabilities in the plan of the car body, chassis and gearbox. Human resource management was another strength, which also acted as a source of competitive advantage. Frank Williams was the founder of Williams and he appointed Patrick Head as the Technical Director.The attributes of entrepreneurial energy and technical excellence helped them to succeed. Patrick Head appointed good dri vers like Senna and Prost. Another strength of Williams was their external linkages. Their linkage with Renault helped them use the powerful and reliable Renault engine, which complemented their FW15 chassis. All these strengths that acted as sources of competitive advantage led to Williams domination from 1992 to 1994. Ferraris overhaul to winning ways after 1999 Montezemela was brought back to Ferrari, as CEO in 1992. He set up a new design section with 50 people.Ferraris localize shifted from engine to integration of main parts. The strengths of Ferrari, identified using SWOT analysis, was that value linkages (Porter, 2004), both externally and internally became a source of competitive advantage for Ferrari. Internal linkages were the co-operation between the departments manufacturing engine, chassis and the aerodynamics department. These were crucial in integrating all components of the car efficiently. External linkages were the collaboration with Bridgestone for making cust omised tyres for Ferrari and with Shell for financial and technical support.Another strength identified was good human resource management, which also acted as a competitive advantage by Ferraris appointment of Montezemela as chief executive and Schumacher as the driver. Ferrari recruited Schumacher in 1996, who was a great driver and motivator. He communicated well with the engine technicians. The core competency (Hamel and Prahalad, 1990) of Ferrari was the capability of manufacturing powerful engines. Since Ferrari manufactured its own engines they were able to integrate engine, chassis and aerodynamics early in the process. This was the most crucial and unique strength of Ferrari.All these factors helped Ferrari win the constructors championship in 1999, after a gap of 12 years. Reasons for Ferrari, McLaren and the Williams teams not being able to sustain their success Using SWOT analysis we can see that one of the study weaknesses of Ferrari, due to which they could not susta in their success, was their lack of dynamic capabilities. Dynamic capabilities mean the ability of firms to conciliate their competencies to the changing times and changing external environment. Ferrari needed the dynamic capability to create newer cars, which were more powerful, had better balance and had great aerodynamic properties.Penrose (1959) and Teece (1982) were the first to suggest that, to sustain competitive advantage, firms will need to utilise their firm specific capabilities and also develop new capabilities. profoundly ingrained ideas of architectural knowledge prevent the organisation from acquiring new knowledge. (Henderson and Clark, 1990). Another weakness of Ferrari was their strongly ingrained architectural knowledge that prevented them from initially accepting the ground effects technology, as it was concentrating only on engine design. (Pinch et. al, 2003). Lack of dynamic capabilities to adopt the ground ffects technology and bad human resource management that led to sacking of Nicki Lauda from Ferrari, were major reasons due to which Ferrari was unable(p) to sustain its success after 1979. One of the weaknesses of McLaren, identified by SWOT analysis, due to which they were unable to maintain their competitive advantage, was the pulling out of Honda from Formula One. McLaren were not prepared for this and did not have any other good engines to regenerate Honda. Thus the lack of ability to maintain external linkages as a source of competitive advantage was the one of the reasons for the failure of McLaren.The other significant weakness identified was their not continuing to use human resource management as a source of competitive advantage. The divergence of Senna to Williams in 1993 was a big blow to McLaren and they had not developed any new drivers to replace him. The main weakness that was the reason for the decline of Williams was the use of technologies developed by them by other competitors, like Benetton. Their competit ors easily replicated their component knowledge. Since their capabilities could be easily copied they could not maintain competitive advantage in the long term.The death of Senna in an accident left Williams without a good driver. Another weakness was the lack of dynamic capabilities that led to their not having a good replacement for Senna. Renaults decision to supply engines to Benetton also meant loss of competitive advantage. The inability of Williams to maintain external linkages as a source of competitive advantage was another weakness identified. The main weakness that was the reason for the decline of Ferrari after 2004 was they were not able to adapt their capabilities and external linkages to the changed rules.The strategies that could have been developed by each of these teams to further sustain their period of dominance. Spanos and Lioukas (2001) and Wenerfelt (1984) suggest that Porters value chain and the Resource based view are complementary and considering both toget her can help in sustaining competitive advantage. But from empirical studies conducted by Spanos and Lioukas (2001) it was found that focusing on unique resources and capabilities was more beneficial in sustaining competitive advantage than focusing unique activities in relation to competition.Thus it can be concluded that it is important to consider both your firm specific unique resources and capabilities and to develop activities that are unique in relation to competition in developing strategy, to sustain competitive advantage. Capabilities that are not easily transferable, that cannot be easily copied, that are not transparent and those that last a long time act as significant sources of long-term competitive advantage (Grant, 1991). Walker, (2007), suggests that to sustain competitive advantage a firm must use tactics of criminal offence and defence.Offence involves working towards dominating the competition and defence involves taking steps to maintain the dominant position. Ferrari could have continued their dominance from the 1970s if they had used opportunities identified using SWOT analysis to develop dynamic capabilities to adopt new technologies like ground effects and to recruit other good drivers to replace Nicki Lauda. miller (2003) suggests that the differences between firms are a source of sustained competitive advantage.Hence it can be said since from all the racing constructors only Ferrari made their own engines and other parts, they could integrate the parts much better. This was another opportunity for Ferrari to use this capability as a long-term competitive advantage and helped extend their period of dominance. McLaren could have used opportunities identified to maintain external linkages as a source of competitive advantage by persuading Honda against quitting Formula One or by developing other external linkages for render engines, as a replacement for Honda. They needed to develop dynamic capabilities to have good alternative dri vers for Senna.Teece et. al (1997) suggests that competitive advantage can be sustained by improving efficiency. Hence, considering this theory McLaren could sustain their competitive advantage by improving their efficiencies continuously. Williams could have used the opportunities identified to develop strong architectural knowledge, which would not have been easily replicated by their competitors. The fact that all new technologies like ground effect, active suspension and semi-automatic gearbox were first developed by Williams was the differentiating factor from other racing constructors.Hence by Miller (2003)s theory Williams needed to use that capability to sustain their competitive advantage. They needed to develop their innovative capabilities in a way that they could not be easily copied. They also needed to develop dynamic capabilities, in terms of other drivers, so that they had a replacement for Senna. To sustain competitive advantage after 2004, Ferrari needed to have dy namic capabilities, which would help adapt their capabilities to the new rules. ConclusionFrom the study of the periods of dominance of various Formula One constructors, it can be concluded that each of the constructors had individual strengths, which they could have used as their core competencies and developed dynamic capabilities to be ahead of the competition. They need to focus on their unique resources, capabilities and develop unique activities, in relation to the competition, to gain competitive advantage. Success in Formula One is dependent on a variety of factors like the cars, the drivers, the management etc. Hence the constructors need to continuously improve their cars and retain their good drivers, to succeed.