Ferrari SWOT & PESTLE Analysis

Strength

1. Strong research and development team with continuous focus on innovation: Their research and development efforts take into account the three defining dimensions of Ferrari cars; performance; versatility and comfort; and driving emotions which is one of their major competencies in the market. Innovation drives products and processes, which represents one of the key differentiating factors for Ferrari. This is why they are focused on developing new technologies for which they have implemented several programs to encourage innovation. For example – Ferrari has established partnerships with universities and research centers to convert the most advanced theoretical researches, especially in technology, engineering and computer science, into practical solutions for our industrial processes. Technological breakthroughs are further enhanced through design which is one of the most fundamental and distinctive aspect of Ferrari products. So a team of designers, modelers and engineers work together to create car bodies that incorporates the most innovative aerodynamic solutions in the sleek and powerful lines typical of their cars. They have also established a Ferrari Design Centre with the objective of improving control over the entire design process and ensuring long-term continuity of the Ferrari style.

2. Huge product portfolio and strong brand equity: Ferrari believes that their cars are the epitome of performance, luxury and styling and the same has been their brand image throughout the years. Ferrari is looked upon as a cult brand and possesses strong brand equity. Their current product range as of 2019 is comprised of five sports cars, four GT cars, and two special series cars and Icona car. They also produce limited edition hyper cars, fuori serie and one-off cars. Ferrari engage in brand development and protection activities through licensing contracts with selected partners, retail activities through a chain of franchised or directly managed stores, licensed theme parks and the development of a line of apparel and accessories sold exclusively in their monobrand stores and on their website. As one of the world’s most recognized premium luxury brands, they are selectively expanding the presence of the Ferrari brand in attractive and growing lifestyle categories consistent with their image, including sportswear, watches, accessories, consumer electronics and theme parks which will enhance the brand experience of their loyal clients and Ferrari enthusiasts.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Complying with the environmental regulations: Ferrari’s business operations are greatly influenced by the environmental rules and regulations which are designed to protect the environment. Their facilities and operations are subject to numerous domestic and international laws and regulations pertaining to environment and failure to comply with such regulations can cause an adverse impact on the business operations and financials. So Ferrari has put certain efforts aimed at minimizing the impact of their activities on the environment, particularly in relation to the energy consumption of production facilities. They have invested heavily to minimize their environmental impact since 2001, when the company was given the ISO 14001 certification for the plants in Maranello and Modena.

2. Increasing focus towards renewable energy and reduction of vehicle emissions: There is an increasing trend of focusing renewable energy in many geographies and industries in order to safeguard the resources. Moreover, government is making stringent regulations for the car manufactures to take initiatives to reduce vehicle emissions. Such environmental initiatives involve huge capital investment for Ferrari and failure to abide by such laws can lead to substantial fines. To address this Ferrari has been committed in reducing CO2 emissions. They also introduced a water-based painting process was introduced in 2004 with the aim of reducing VOC emissions. Over the years, the Ferrari has strived to lower its energy consumption and to minimize its environmental impact, adopting innovative solutions and using renewable energy sources for its manufacturing facilities. In 2008, they installed their first solar panels and subsequently increased capacity in 2011 and 2015. Ferrari has been continuously focusing on research and development for improving the technology in the cars to reduce emissions and fuel consumption.

3. Waste management and disposal: There are numerous laws applicable with respect of disposal of waste materials form the car manufacturing facilities to avoid any negative impact to the surrounding environment. Ferrari has always focussed towards waste management by adopting innovative solutions and advanced technical processes to minimize waste and negative environmental impact such as the reuse of production scraps in the manufacturing process. They also treat the wastewater in accordance with all applicable laws and regulations. All of their wastewater from the plants is always monitored and channelled in the public sewage system and not directly into water bodies. The water used in some of the industrial processes (such as washing solutions or paint washing), before its discharge in the public sewer system, is treated by an industrial water treatment plant where it undergoes the necessary chemical, physical, and biological treatments.