F1 Strategic Capabilities

LSMF 2015 – Management Strategique de la Technologie et de l’Innovation Seance # 4 — 1 LSMF 2015 Plan de la seance F1 – What it’s all about Strategic Capabilities Case Study Application: – – – What do you need in order to succeed in F1? Sustainable Competitive Advantage Why where they unable to keep their advantages? Conclusion et Discussion 2 LSMF 2015 1 F1 – What it’s all about History: 4 key moments 1945: FIA established Formula A as the premier level of motorsport 1950: A driver’s World Championship was introduced 1958: A constructor’s World Championship was introduced 1960: From a  « car test  » concept to a  « specialized business  » History: Big Names Juan Manuel Fangio (Champion in 1951-1954-1955-1956-1957) Nicky Lauda (Champion in 1975-1977-1984) Alain Prost (Champion in 1985-1986-1989-1993) Ayrton Senna (Champion in 1988-1990-1991) Michael Schumacher (Champion in 1994-1995-2000-2001-2002-2003-2004) 3 Next big champion? LSMF 2015 F1 – What it’s all about History: Last 10 world champions 2000 – 2004: Michael Schumacher (Ferrari) 2005 – 2006: Fernando Alonso (Renault) 2007: Kimi Raikonen (Ferrari) 2008: Lewis Hamilton (McLaren/Mercedes) 2009: Jenson Button (Brawn/Mercedes) History: Belgian in Formula 1 22 belgian drivers were at least once at the start of a F1 Grand Prix Thierry Boutsen: 1983-1993 (wins 3 races) Jacky Ickx: 1967-1979 (wins 8 races) Next? Jerome d’Ambrosio – Reserve Driver for Renault F1 in 2010 Bertrand Baguette – IndyCar Series for 2010 LSMF 2015 2 F1 – What it’s all about †¢ F1 season from March to November †¢ 24 drivers in 12 teams will run 19 races †¢ 2 Championships (Driver and Constructor) †¢ New rules every year (e. g. Points Awarded System in 2010) †¢ Sources of Revenue: Sponsorship and Prize money †¢ FOA (Formule One Administration) role consists in dividing up the royalties from medi a coverage and other revenues †¢ Motorsport Valley in Oxford, UK. 5 LSMF 2015 F1 – What it’s all about 6 LSMF 2015 3 F1 – Application What do you need in order to succeed in F1? In terms of resources and competences†¦ 7 LSMF 2015 F1 – Application Why do you think your team was successful during this period? 1. 2. 3. 4. Ferrari in the 1970’s McLaren and Honda in the 1980’s Williams in the 1990’s Ferrari between 1999 and 2003 LSMF 2015 8 4 F1 – Application Which of these resources and competences can be considered as a source of sustainable competitive advantage? 9 LSMF 2015 Capabilities for Sustainable Competitive Advantage We usually use 4 factors to identify which capabilities might provide a competitive advantage: 1. 2. 3. Value Rarity Create values for the customers Are rare Inimitable Through complexity, culture and history, and causal ambiguity (= difficulty to discern the causes and the effects underpinning an organisation advantage) Non-substituability cfr. Substitutes in the 5 forces analysis 4. 10 LSMF 2015 5 F1 – Application The answer is†¦ None ! 11 LSMF 2015 F1 – Application Why were they unable to sustain this success? What could they have done? 12 LSMF 2015 6