1. Formula 1
By
Varun Balakrishnan

3. ABOUT THE CASE STUDY
Cover the resources, capabilities and attributes required
by F1 constructors.
Analyses the reason for the dominance of different
constructors during different periods.
It will analyze the reason behind their inability to sustain
their dominance and also suggest ways by which these
constructors could have sustained their competitive
advantage.
Describes three examples of the creation of competitive
advantage in a highly technological context of F1.

4. 1945
1950
Started by Driver’s
FIA as
world
Formula A Championship
1960s
1990s
Third
highest
TV
audience
Top
FOUR
TEAMS
Williams, McLaren,
Ferrari, Benetton

5. SOURCES OF REVENUES
Commercial Sponsorship from non related companies
(clothing, cigarettes)
Support through provision of free product and
services such as engines, fuel and lubricants
(Renault, Ford, Shell, ELF)

6. System support (Andersen Consulting, Bulls and
Sun Microsystem)
Auto motive manufactures (Honda, BMW,
Toyota)
Equity holder
Prize money

7. FERRARI

8. Founder-Enzo Ferrari
Ferrari viewed as National Icon in Italy
1964-won world championship

9. They build their own engines, gearbox,
suspension, chassis at Maranello factory the
most up-to-date facilities in terms of designing,
developing and building all the necessary
components.
1969-merger between Fiat and Ferrari; huge
cash injection
Early 1970s-Fiat influence meant increase
pressure and resources

10. 1971-opened their own test track at Fiorina near
Maranello Factory.
1972-73 cars were fast but not reliable
1974-change of team members
Forghieri recalled as technical director
New Team Boss-Luca Montezomolo

11. 1974- Ferrari offered Niki Lauda to join
They designed a new car 312B but lost because of
technical difficult.
1975-tables turn
312T won both Driver’s and Constructor’s
Championship
1976- Niki Lauda met an accident but managed to
grab constructors championship

12. 1977-won both the championships
Lauda left
1979- was the last time they won the championship
for next 21 years
mid 80s-more investment into facilities but no result
appeared

13. 1982-83 finally investment paid off as they won
constructor’s championship
1988-Enzo Ferrari died
1992-luco Montezomolo took over as CEO
2000- return of glory with Schumacher's victory

14. MCLAREN

15. ➤Founded by New Zealand F1 Driver Bruce McLaren in
1966
➤Had their first major victory in Belgium Grand Prix of
1968
➤ McLaren was killed two years later while testing the
American Sports Car
➤Lawyer & friend Teddy Mayer took over as team Principal
& team continued to develop
➤In 1974, sponsorship from Philip Morris, for Marlboro
brand which lasted till 1996
➤In 1980, Ron Dennis became joint team principal
➤McLaren Have Taken Part In 440 Grand Prix

16. EMINENT MCLAREN DRIVERS
EMERSON
FITTIPALDI
(1974)
MIKA HAKKINEN
(1998,99)
JAMES HUNT
(1976)
NIKI LAUDA
(1984)
ALAIN PROST
(1989)
AYRTON
SENNA
(1988,89,90,91)

17. TIMELINE
1966
BIRTH
1968
1974
1980
1986
1987-88
RON
BARNARD
FIRST
Prost
1ST
OUT,
MAJOR SPONSORSHIP DENNIS
& Senna
COMES
WIN (MARLBORO)
MURRAY IN were
IN
recruited,
HONDA
CAME IN

18. GOLDEN PERIOD FOR MCLAREN
1988
1989
➤ McLaren Won The
Championship From
1988-91
➤ They Won 38 Out
Of 48 Races
Between these years
1990
1991

19. GOLDEN YEARS OF MCLAREN
➤In 1988, McLaren won 15 out of 16 Grand Prix
➤In 1988, Dennis began a project on McLaren road-
going car- McLaren F1 was launched in 1994 and with
a price tag of ₤ 634,000 and a top speed of 231 mph
became the most expensive and fastest road-going
car in the world.
➤The design skills of Gordon Murray was mainly used
in this car.

20. PILLARS OF MCLAREN
➤John Barnard was considered to be the reason for
McLaren’s developing dominance
➤The partnership between Dennis and Barnard had
been stormy but they achieved many targets
➤Dennis providing the managerial and commercial
acumens
➤Barnard highly innovative design skills
RON
DENNIS
JOHN
BARNARD

21. V/S
PROST
SENNA
➤Prost & Senna were real contrasts
➤Senna was fast & had unparralel commitment to win
races
➤Prost was fast too, but a great tactician, making sure the
whole team was behind him
➤Senna’s brilliance was undisputed at Japanese Grand
Prix when he pushed Prost’s Ferrari off road to win the
race
➤Senna passed away in 1994

22. SUCCESS OF MCLAREN
➤McLaren was successful because Ron Dennis had
negotiated exclusive for Honda Motors
➤Ron Dennis’s negotiating & marketing abilities were
remarkable throughout F1
➤Barnard once likened working with Dennis as 'being in
a room with a hand grenade rolling about without its
pin, about to go off and make a horrible mess.‘

23. McLarens Decline
➤ In 1992, McLarens slippage came
➤ Renault engines in Williams started gaining pace
➤ In September, Honda made it clear that they are backing out of F1
because of achievements of goals & finding new challenges
➤ Dennis’s lame reaction to this setback made them move towards-
Ford engines, which were easily available
➤ Senna still managed to win some races but eventually moved on to
Williams in 1993
➤ Having tried Peugeot engines in 1991 then moved to Mercedes in
1995
➤ In 1996, relationship between McLaren & Philip Morris came to an
end, Philip Morris moving support to their Marlboro brand to
Ferrari driver Michael Schumacher
1992

24. RISING FROM THE ASH
➤In 1997, McLaren acquired the services of Williams
designer Adrian Newey for a reputed 2 million contract.
He designed talents coupled with a more powerful and
reliable Mercedes engine meant that McLaren again
became the team to beat

25. WILLIAMS

26. 1968
• FRANK WILLIAMS(RACING CARS) ESTAB.
1977
• WILLIAMS GRAND PRIX ENGG. ESTAB.
1980-81
• ALAN JONES –DRIVERS TITLE
• WON CONSTRUCTORS CHAMPIONSHIP
1986
• FRANK WILLIAMS ACCIDENT
1987
• HONDA MADE ENGINES AVAILABLE TO
LOTUS

27. 1988
• HONDA MADE ENGINES AVAILABLE TO McLaren
• NIGEL MANSELL JOINED FERRARI
1990
• TIED UP WITH RENAULT
1991
• NIGEL MANSELL RETURNED
1992
• NIGEL MANSELL WON F1 CONSTRUCTORS
• HE LEFT AT YEAR-END
1993
• ALAIN PROST WON F1 CHAMPIONSHIP

28. STRATEGY OF WILLIAMS
More functional than innovative
LOTUS – Ground Effect and Active
Suspension
McLaren – Carbon Composite monoceque
FERRARI – Semi-automatic Gearbox

29. HOW DOES THE RESOURCE
BASED VIEW APPLY TO
WINNING FORMULA ONE
CHAMPIONSHIP???

31. FERRARI AND ITS RENAISSANCE IN THE MID
1970S
Availability of technical expertise and
resources
Cash flow from Fiat and Ferrari Merger

32. Management style of Team – Driver Niki
Lauda, Designer Mauro Forghieri and manager
Luca Montezemolo
Own test track a few yards away from the
factory

33. MCLAREN
Put together best of everything
Secured exclusive use of Honda
Sponsorship from Philip Morris

34. Secured the services of the best driver around (Senna
and Prost)
Commercial and leadership skills of Ron Dennis
Ron Dennis and John Barnard partnership stormy but
useful

35. WILLIAMS
Focus on engineering
FW06 Patrick Head with Saudi Airlines helped
winning constructors
Car development process was top priority
supported by team of designers

36. Development of powerful and reliable engine
perfectly complemented by chassis
Long standing partnership of Frank Williams and
Patrick Head
Wide ranging relationship with engine supplier
Renault

37. WHAT CORE COMPETENCIES
WERE KEY TO EACH OF THE
MAIN WINNERS???

38. CORE COMPETENCY:
➤ The main strengths or strategic advantages of a business.
➤ Pooled Knowledge + Technical Capacities = Competitiveness
➤ It has to fulfill three key criteria's :
➤ It is not easy for competitors to imitate.
➤ It can be reused widely for many products and markets.
➤ It must contribute to the end consumer's experienced benefits
and the value of the product/service to its customers.

39. MCLAREN
➤ Partnership with Philip Morris and appointment of Ron
Dennis
➤ Innovative skills of John Barnard
➤ Collaboration with Honda
➤ Signing of Prost and Senna

40. FERRARI
➤ Maranello Factory
➤ Identity
➤ Takeover By Fiat
➤ The Trinity of Mauro Forghieri + Luca
Montezemolo + Niki Lauda
➤ 312T

41. WILLIAMS
Collaboration with Renault RS3 V10 and FW15 chassis
PATRICK HEAD’S innovation namely semi-automatic
gear box, drive by wire and active suspension system
Exploiting the technology available
Combination of ten things which gave them a couple
of seconds of advantage

42. TO WHAT EXTENT DID THE
KEY COMPETENCIES VARY
OVER TIME IN THE FORMULA 1
CHAMPIONSHIP???

43. FERRARI
The renaissance of Ferrari in mid 1970’s
Their unique approach- creating everything of
their own- gearboxes, engines, suspensions,
chassis- made in their home town Maranello
factory

44. They also were very rich in the technical
expertise and recourses
They returned to stage 1999-2003: Worked
together -driver Niki Lauda, designer Mauro
Forghieri and team manager Luca
Montezemolo

45. Later in 1999-2003, Ferrari was back to their stage
and glory and they were working with Michael
Schumacher, a key element, and also their focus was
support team which was a very efficient one.

46. MCLAREN
McLaren and Honda domination in the late 1980s
McLaren were successful because they were able to put
together the best of everything.
They secured exclusive use of the Honda engine at a time
when it was the most powerful and reliable- Honda
engines won for 6 consecutive years- one for Williams and
4 for McLaren

47. They were also able to secure the services of the
best drivers around (Senna and Prost).
This was due to the high level of funds made
available by sponsor Philip Morris, Marlboro.

48. WILLIAMS
Williams and the technological revolution: the mid
1990s
Williams’ success was due to their engineering focus.
Frank Williams was very dedicated to his passion and
bought many new changes in the team.

49. This engineering focus can be attributed to the
long-standing partnership of Frank Williams and
Patrick Head.
Collaboration with Renault RS3 V10 and
FW15 chassis

50. THE VARYING FACTOR IN THEIR
COMPETENCIES ARE
9
9
8
7
6
5
4
3
2
1
0
9
7
7
9
7
6
FERRARI
MCLAREN
CAR
DRIVERS
6
6
WILLIAMS
SUPPORTING TEAM