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Executive Summary This report is commissioned to analyze and evaluate the chosen business Ferrari, which operates in automotive industry sector. Ferrari is the world’s most powerful brand with 5 most powerful brands and 500 famous companies in the world. This report will start with an introduction followed by industry review which mainly focused on the activities, size, key organization and themes. Secondly, the report will be focusing on corporate review of Ferrari, which gives a brief overview of company like geographical locations, key statistics and facts and the products and services they produce. To support the corporate review of Ferrari I will be providing SWOT analysis and Business canvas model. Next, I will focus on sustainability of the business through financial statements like cash flow and comparing it to its main competitors. Lastly the report will be focused on human resource management of the company like key roles of employees and how they are distributed in terms of age and gender. Moreover, it also includes the human resource management prospective like mission, vision and goals. Ferrari provides employees with excellent training and develop their skills. According to [ CITATION Enz18 \l 2057 ]”I believe factories are made of machines, walls and people. Ferrari is made most of all by people”. All information and graphs will be found in appendices. It is recommended that decreasing the 12 month waiting period to meet the growing demand can help Ferrari to be strong competitor and responsive to the customers. Moreover, a separate division can help Ferrari to handle the growing brand activities as Ferrari is mainly a product – oriented luxury brands[ CITATION Lem15 \l 2057 ].

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Table of Contents: Executive Summary............................................................................................... 2 Abbreviations......................................................................................................... 4 1.

Introduction..................................................................................................... 5

2.

Industry Review............................................................................................... 6

3.

Corporate/Organisation Review.......................................................................7

4.

Sustainability of the organisation....................................................................9

6.

Human resources management review.........................................................11 5.1

The people.............................................................................................. 11

5.2

Outline of preferred role.......................................................................... 12

5.3

Assessment of sustainability...................................................................12

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Next steps..................................................................................................... 13

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Conclusion..................................................................................................... 14

References........................................................................................................... 15 Appendix A.......................................................................................................... 18 Appendix B.......................................................................................................... 19 Appendix C.......................................................................................................... 20 Appendix D.......................................................................................................... 22 Appendix E........................................................................................................... 23 Appendix F........................................................................................................... 24 Appendix G.......................................................................................................... 25 Appendix H.......................................................................................................... 26 Appendix I............................................................................................................ 28 Appendix J............................................................................................................ 29 Table of Contents Figure Figure Figure Figure

1-Geographical locations of Ferrari.............................................................7 2-The revenue growth of Ferrari in million US$...........................................8 3-Income statement of Ferrari.....................................................................9 4-Comparison of Ferrari’s competitors......................................................10

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Abbreviations GT – Grand Touring (car category) APAC – Asia- Pacific or Asia Pacific, which includes East Asia, South Asia, Southeast Asia and Oceania EMEA – Europe Middle East and Africa

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1. Introduction In this report, I will be discussing about Ferrari which operates in automotive industry sector. Ferrari is a world’s leading luxury brands with recognizable luxury performance sports cars. Firstly, I will be focusing on industry sector, which explains the main activities, current size and key organization and themes. Secondly, the report will be focusing on corporate review of Ferrari, which gives a brief overview of company like geographical locations, key statistics & facts and the products and services they produce. To support the corporate review of Ferrari I will be providing SWOT analysis and Business canvas model. Next, I will focus on sustainability of the business through financial statements like cash flow and comparing it to its main competitors. Lastly the report will be focused on human resource management of the company in how they treat employees and will be introducing a role to assess the suitability through personal CV.

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2. Industry Review The automobile industry sector is a multi- billion industry where it has influenced the

world economy in terms

of

revenue. Other

than

manufacturing of vehicles the sector also involve in marketing and sales. Moreover, China is considered as the world’s largest market in the industry sector. However, due to the pollution control and carbon footprint the automotive industry sector is trying to bring more fuel efficient and low emission vehicles like electric vehicles. See (Appendix B) for PESTLE Analysis. The main activities of automotive industry sector include manufacturing cars, trucks and other vehicles. Moreover, the industry is where the companies and the workers manufacture and delivers the cars to sell. The automotive industry falls into two main primary segments which is car manufacturing and car part manufactures. The statistics of the current size of global automotive industry is 78.6 million vehicles in 2017. China and United states has leading largest automobile markets in terms of production and sales (Appendix A). The main key organization of automotive industry are the Automotive Council, the transport knowledge transfer network, innovate UK, the advanced propulsion Centre. This helps automotive sector to work in innovation and teamwork. Due to the digitalization, humans and vehicles are moving towards the connectivity of device, database and the objects. The impact of digitalization is creating more opportunities which lead to new innovations and efficient and safe vehicles. Even though there is a lot of changes in automotive sector, one of their main objective is to remain competitive globally. The opportunities of digitalization helped the manufactures to save more time in the production process, reducing cost of production and responding to the customers effectively through assisted driving technologies like crash avoidance and automatic parking assistance.

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3. Corporate/Organisation Review Ferrari’s standard industry code is 7538, which officially began in 1947 where the first Ferrari developed in the entrance on Via Abetone Inferiore in Maranello. The founder of Ferrari, Enzo Ferrari was born in Modena on February 18 th1898. Moreover, Ferrari was gathered over 5,000 victories on world’s tracks and was a modern-day legend. Ferrari is unique as it includes a long expertise in engineering and performance. The main activities of Ferrari include: Theme parks, Licensing and Museums. Moreover, Ferrari owns two museums which attract more than 530,000 visitors in 2017. It is located in Maranello and Modena.

Figure 1-Geographical locations of Ferrari

Figure 1 shows the various geographical location of Ferrari with strong brand image, regardless of adverse global economic conditions. It is the geographic distribution of 185 points at December 13, 2017. In the above figure, 45%of geographical distribution is in EMEA followed by 33% in America, 8% in Greater China and 14% in Rest of APAC. The sales of Ferrari Maranello are expanded across with the largest sales of 2.2 percent of sales and 21.7 percent sales of 15 largest dealers. 7

Figure 2-The revenue growth of Ferrari in million US$

The above figure shows the financial statistics of Ferrari from the year 2010 to 2021. It can clearly been see that the in 2010 the revenue of Ferrari was 555.8m but in 2014 it declined to 467m. This was mainly due to the shipments of its limited edition of Ferrari like Hybrid, LaFerrari which was priced more than $1.1 million dollars. This leads to increase of expectation of investors as the special edition and limited sports cars are sold in high price than of the regular Ferrari models. Then the revenue of Ferrari was gradually increased year by year. Ferrari produce unique sports cars and offer branded merchandise through its website and through 32 stores worldwide. Moreover, Ferrari has its one theme park in UAE Dhabi and plans to open another in Spain with Ferrari themed hotel. Moreover, Ferrari has a niche market segment leads to focusing in people who mostly prefer luxury products. Therefore, only a few people can afford it but it is considered as globally desired automobile brand. Ferrari targeted on customer who have high income and strong background and who desired to highlight their status. The main competitors that Ferrari faces are Lamborghini, Porsche, BMW and Aston Martin. Ferrari must maintain a tough competition as they have better performance, color and high-quality maintenance. It has been stated that Ferrari “neither has a distinctive functional uniqueness, but it 8

has a unique emotional association in the customer’s mind” (Philip Kotler). Ferrari use low volume production strategy as it helps to maintain changing consumer dynamics and geographical socioeconomic changes. Business canvas (Appendix C).

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4. Sustainability of the organisation

Figure 3-Income statement of Ferrari

[CITATION Fer17 \p 16 \l 2057 ]

The above figure shows the income statement of Ferrari for 5 years. In 2015, the net profit of Ferrari was €290 million and in 2017 it increased to €537 million. The increase of net profit lead to increasing the revenue of the business as in the figure above the net revenue of the Ferrari in 2017 is €3,417 million and in 2014 its €265 million. Ferrari increase net revenue by attracting other clients through sponsorship, commercial and brand, engines and car and other spare parts (Appendix A). The majority of the annual revenue was generated from car and spare parts from 2013 to 2017. This shows that the status of the business has improved and they can further improve through growth strategy through creating new cars by nourishing the existing car models. Thus lead to responding to the consumer preferences and car trends. Moreover, this strategy can help Ferrari to improve operational, financial and internal controls [CITATION Ann171 \p 21 \l 2057 ] The competitors share several characteristics of Ferrari like quality, aesthetics and exclusivity which leads to higher price compared to other mass market goods. The competition is mainly between small number of producers which include large automotive companies and small producers focus on luxury cars. Mainly competition between luxury performance cars are based on the strength of the brand and the demand of products

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regarding their performance, style and innovation of products according to customer demand.

Figure 4-Comparison of Ferrari’s competitors

[CITATION Ann172 \p 32 \l 2057 ]

The above figure shows that, in terms of volumes in current years is less unpredictable than the competitors. This is mainly due to two main factors: producing low volumes comparing to the demand of the product and higher number models in the Ferrari product range and frequent product launches compared to the competitors. The activities like customer relationship can affect Ferrari to be financially sustainable in long term through targeting existing and potential clients. Pursuing the knowledge of the customers about the product and satisfaction of cars both on road and tracks can create a long term relationship with the clients. Ferrari believes that customers are the key to success as in 2016 more than 60% of new cars was sold to Ferrari owners[CITATION Ann16 \p 49 \l 2057 ]. In 2017, it was 65% of cars was sold to Ferrari owners.

5.

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6. Human resources management review 5.1 The people There are currently 3,380 people working for Ferrari, they believe that behind every success of the business is the employees that work for them. Ferrari is organized and structured through different departments (Appendix D). There are exceptional mix of cultures of 40 nationalities working for Ferrari. The board of directors of Ferrari is responsible for the management and the strategic decision of the company. Organizational structure (Appendix E) is used by businesses like Ferrari to define the hierarchy of the organization which identifies the job and its functions. Ferrari believes that, every individual who works for them are strongest asset for the company through working as a team with strong communication and trying to improve to reach the best result. Ferrari allows employee’s freedom to express as it is a key to creative and successful collaboration. Moreover in 2007 Ferrari was considered as the best place to work. Vision 



Ferrari, with Italian excellence, which makes the world dream To be best in its creation

Values 

Mission 

Build cars with symbols of Italian excellence to win on both road and track

  

Mission, Vision and Values 12

Individual and team – achieving great result through working as a team Emotion through pride and enthusiasm Integrity by achieving core values of honesty and respect Passion and excellence through setting targets and achieving complete customer satisfaction

[CITATION Fer171 \p 16-17 \l 2057 ]

Employees are distributed in terms of age, gender and different department roles (Appendix F). The main key roles are Chief executive officer, Executive directors, Vice chairman and Non- executive officer, Non – executive director. The recruitment process of the Ferrari includes obtaining the right skills and qualities for future success. There is a structured process of selection process and to prepare future employees with post- recruitment integration and development. Employees receive a regular performance and career development review depends on their role.[CITATION Fer173 \p 93 \l 2057 ] The recruitment process includes main 4 steps. 1 st step includes evaluating CV of employees then they use a site to track all application and to select relevant candidates. Then they send an invitation for first interviews with Recruitment and selection specialists. The 2 nd step include technical interview with appropriate departments, then they further process through ability test depending on the role or the recruitment program. If the application of the employee is not successful, then they provide talent pooling for future roles. The step 3 includes, Ferrari providing questionnaires, test, exercises and test for language especially English. The 4 th step include participation of individual or group in certain assessment and selecting the right individuals by offering them the job. Ferrari provide over 35,500 hours of training to employees over the last year. This is to create a growth pattern for individual characteristics and to increase own goals. Moreover, the senior employees of Ferrari train staff and operatives to generate new skill and knowledge [ CITATION Fer18 \l 2057 ]. Ferrari was considered as best place to work in 2003 and 2007 by the Great place to Work Institute. This was mainly due to the result of Formula Uomo, which provides a better working condition and lives of the workforce. Moreover, Ferrari provides new facilities, employee training and family benefit to their employees [ CITATION Par07 \l 2057 ]

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5.2 Outline of preferred role My preferred role is Finance and Controlling in Ferrari internships. In this specific role I need to work on a range of financial management responsibilities like accounting, monitoring on daily operations etc. Moreover, this role also includes motivating, developing and managing the team (Appendix G)

5.3 Assessment of sustainability Due to my ability to motivate and manage the team members and excellent leadership skills can help to become a Financial Controller. Moreover, the good communication skills can help me to maintain a good relationship with the Commercial Manager, Line Managers, Suppliers, Staffs and Auditors. Moreover, to support my suitability of this role I will be providing CV and SWOT analysis (see Appendix H and Appendix I).

6 Next steps Finance and Controlling is a complex role, which has a diversified nature as it varies from industry to industry. To achieve this role, I need to have a master’s degree in Finance or Business Administration which is ideal for internship project and other international experiences that I will gain during my course. Moreover, Ferrari provides 6- month of internship with their Finance and controlling team in Maranello, which include working on financial management responsibilities like working with Finance Manager and Senior Controller. The skills that is required to achieve this role is the capable of thinking analytical, excellent relationship and communicative skills with different stakeholders.

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7 Conclusion Ferrari build unique cars with excellent performance, innovation, design and technology. Ferrari is successful in terms of their net revenue which is €3,105 million and it has overall 62 markets worldwide. However, if they don’t maintain the quality of the brand and image then it can affect their financial performances. Ferrari should focus on changing perception of brand image which will attract new customers. This will lead to renovating and expanding model ranges. As mentioned earlier in figure 5, the financial performance of Ferrari is lower than its competitors which is due to low volumes compared to the demand. However, the introduction of Hybrid engines and new designed models can attract GT customers. Moreover, it also changes the experience of the drivers compared to the present combustion engine cars. Therefore, the Hybrid engine strategy can help Ferrari to compete with its competitors and to be sustainable and effective in the business. See (Appendix J) for SWOT analysis.

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References Pratap, A. (2018). Automotive Industry PESTEL/PESTLE/PEST Analysis by Cheshnotes. [online] ...