Ferrari Case Study

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Case Study #3

Having an item that has a brand name has always been highly looked upon. Someone having a Ferrari would be looked at as being more wealthy or successful than someone driving a Buick, although that may not be true. The problem with brand name items is that they are very costly. This is exceptionally noticeable with the brand Ferrari due to the fact that most of their cars sell for over $200,000. Companies need brand recognition but need to get out there in a way that is affordable to their customers, which is exactly what Ferrari did.

Ferarri took the initiative of selling their brand through products other than just their cars. The company started a line of different merchandise through brand extension. This was very good for the company, it made the average person feel as though they could be a part of Ferrari without having to have the money to spend on a car. With brand extension the company had a sales revenue of $725 million. There is not much more than the company can do, besides continuing to put their customers first.

Ferrari has decided to expand through a theme park in Abu Dhabi. This is a similar move to what Walt Disney Company did when they opened Euro Disney outside of Paris. The fallback for Euro Disney was that they did not make a profit until three years after the theme park was opened. A way that Ferrari can make a better move than Disney did is to make sure that they have enough profit from other types of expansions before they decide to actually open the theme park, which is now open and running smoothly. If you go into a business transaction with the money needed, then you will make profit right away. Now that their theme park is open, they just need to keep up with their brand extensions and keep moving to become a better, higher quality, unique company.

In conclusion, when running a company you need to be aware of the things that are going on all around you. Not only locally, but globally as...
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