Formula One Strategy

Question 1

What do you need to in order to succeed in Formula One?

It is important to understand Strategic groups, strategic groups are organizations within an industry or sector with similar strategic characteristics, Following similar strategies or competing on similar bases.

In formula One you need to consider the extent to which organizations differ in terms of characteristics such as:

a) Scope of activities

• Extent of product ( or services) diversity

• Number of market segments served

b) Resources commitment

• Extent ( number) of branding

• Marketing effort ( eg advertising spread size of sales force

• Product or services quality

• Technological leadership ( a leader or follower meaning you need to be always ahead of the technology to be successful in formula One.

• Also you must do benchmarking to compare your self with other racing companies so that you can be able to improve all the times.

c) You also need to understand strategic group concept to succeed in formula One at least the three following ways:

• You need to understand competition by focusing on direct competitors with your particular strategic group, rather than the whole industry.

• This will help you to establish the dimensions that distinguish you most from other groups, and which might be the basis for relative success or failure.

d) You need to analyze strategic opportunities.

• Strategic group maps can identify the most attractive “strategic spaces” within the industry.

e) You need to analyze the mobility barriers:

• This will allow you to move across the map to take advantage of opportunities and this is also not costless, it will there require difficult decisions and rare resources.

To summarize in formula One you need to understand five critical success factors

• The producers reputation

• After sales services

• Reliability Importance

• Testing facilities and

• Technical Quality

Question 2

They were successful because they understood...