A SWOT analysis deals with the identification of the company's strengths, weaknesses, opportunities and threats in the planning process. Professor Kenneth Andrews of Harvard Business School defined the SWOT analysis “as a reasonable method of analyzing and reviewing an organization present position. He has also proved how vital it is for an organization to communicate its operation objectives with its strategic activities” (netmba.com).
Currently companies have adopted the SWOT analysis as a tool to detect their company's position. Hence highlight on their internal competences based on strengths, weaknesses, and their external evaluation such as opportunities and threat. SWOT ANALYSIS FOR FERRARI
Ferrari is engaged in the manufacturing and distribution of automobiles with greater expertise with fast moving vehicles, in addition to components for those products. Ferrari has a diversified product portfolio. Business diversification shields Ferrari against demand fluctuations in certain product categories and also enables it to benefit from opportunities available in various divisions. However, recession in global economy would harm Ferrari's business by adversely affecting its revenues, results of operations, cash flows and financial condition. TABULAR SWOT ANALYSIS FOR FERRARI
Strengths| Weaknesses| Business diversificationStrategic acquisitionInnovative products| Lack of scale compared to peersWeak performance of business divisionsPoor performance of Fiat in major markets| Opportunities| Threats|
Growing economy in India andChina| Forecasted global recession in 2009Weakening of global automotive industryCompetitive pressure|
Strengths จุดแข็ง Business diversification การกระจายความเสี่ยงทางธุรกิจ Ferrari has a diversified product portfolio. The company operates through different business divisions including: Ferrari group automobiles, Magneti Marelli, Ferrari and Ferrari Powertrain Technologies(FPT), and others. Ferrari group's automobile division designs, produces and sells vehicles under the Ferrari, Alfa Romeo, Lancia and Abarth brands. The Ferrari group automobiles division accounted to 44.9% of total revenues in FY2008.
The CNH division of the group accounted to 21.4% of total revenues in FY2008. Magneti Marelli division designs and produces cutting-edge technology systems and components for vehicles. It also operates in the distribution of spare-parts in the independent market.This division accounted to 5.5% of total revenues of Ferrari. Ferrari offers luxury cars and it accounted to 3.1% of total revenues of the group.
This division accounted to 1.2% of total revenues. Maserati produces luxury sports cars. Ferrari's Maserati division accounted to 1.2% of total revenues in FY2008.Teksid manufactures different ranges of engine blocks, suspensions and aluminum cylinder heads. Teksid accounted to 0.9% of total revenues. The other operating divisions of the group include the publishing and communications operations advertising space inprint, television and internet media operations. The other operating division of the group accounted to 1.2% of total revenues.
Business diversification shields Ferrari against demand fluctuations in certain product categories and also enables it to benefit from opportunities available in various divisions. Strategic acquisition การซื้อกิจการเชิงกลยุทธ์ Ferrari has focused on strategic acquisition to expand its business. FPT Powertrain Technologies fully acquired Tritec Motors from Chrysler and decided to give is a new name which is FPT Powertrain do Brasil – Industria e Comercio de Motores. The purchase includes the facilities, the manufacturing unit, the production lines and the license to produce the current range of products.
The group completed the purchase accounting for this acquisition in the second quarter of FY2008. This acquisition enables Ferrari to reach two main strategic goals, first, to attract an even larger number of non-captive customers for this product. Secondly, to widen its product portfolio, offering modern and competitive product range. Therefore, this acquisition enhanced Ferrari's product range and it went out globally by expanding its customer base.
Innovative products Despite challenging market conditions in 2008, Ferrari added several products to its existing product range. Innovation continued with a focus on both product and methodology. Product innovation was centered on six key elements: new generation vehicles, best-in-class fuel efficiency, high perceived quality of cabin environment, cost-effective solutions for frames, excellence in preventive security, and evolution of telematic systems. Weaknesses
Lack of scale compared to peers Ferrari lacks the scale to compete with large players in the markets in which it operates. Many of its competitors such as General Motors, Ford Motor and Daimler are larger in size. General Motors, for instance, recorded revenues of $148,979 million and employees of 235,000 in 2008, while Ford Motor recorded revenues of $146,277 million and employees of 213,000 during the same period. Daimler recorded revenues of E95,873 million ($141,061.8 million) and employees of 273,216 during FY2008. The revenues of Ferrari is E59,380 million ($87,368.2 million) and employees of 198,348 in FY2008, much lesser than that of its competitors..
Weak performance of business divisions In FY2008, Ferrari witnessed decline in its sales in major business divisions, including Iveco, FPT, Teksid and others. Iveco accounted to 17.9% of the total revenues during FY2008. Therefore, sluggish performance of major operating divisions will eventually affect Ferrari's financial position and puts pressure on other profit making divisions of the company.
Poor performance of Ferrari in major markets Ferrari's sales witnessed poor performance in some of its key geographic segments. Italy, which is thel argest geographic market for Ferrari, accounted for 24.1% of the total revenues in FY2008. Revenues from Italy reached E14,316 million ($21,063.7 million) in FY2008, a decline of 9.7% compared to 2007.
The decrease in revenue contribution from Italy, the US, Germany, the UK, Spain, and Turkey and other countries has offset the increase in revenues witnessed by Brazil, France, Poland and other regions.Therefore,poor performance of Ferrari in major markets may eventually affect the group's financial performance.
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