The Formula One World Championship was started in 1951 by private sportspersons. Today, Formula One is the world’s biggest motor sports event and is arguably the second most popular sport in the world. It consists of ten teams, with two cars each, contesting a 17-race series. It involves two titles, the Driver’s Championship and the Constructors Championship. Formula One today is a highly dependent on technology (Denison and Henderson, 2004). This article will discuss the resources, capabilities and attributes required by Formula One constructors. This article will also analyse the reasons for the dominance of different constructors during different periods, by using one of the methods of identifying competitive advantage. It will analyse the reasons behind their inability to sustain their dominance and also suggest ways by which these constructors could have sustained their competitive advantage. “A firm is said to have competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors.” (Barney, 1991:99) Resources, capabilities and attributes required by Formula One Resources can be classified as financial, physical, human, technological and organisational (Grant, 1991). The financial resources required by Formula One constructors are vast (close to $1 bn), the human resources required are a staff of around 450-800. They need highly qualified staff like race engineers, designers, aerodynamicists, composite experts and system specialists. They require physical resources including their own testing and development equipment like wind tunnels, test tracks and other equipment. They also need to constantly change their strategies to counter strategies of the other teams. All the teams and members need to work as a cohesive unit. Based on Porter (2004) we can identify factors important for competitive advantage in the Formula One industry. Technology development is crucial to competitive advantage in the racing industry. Technology development involves steps to improve the racing car in aspects like power, stability and drag. It involves steps like research, product design and servicing procedures. Human resource management is also key to competitive advantage in the racing industry. Human resource management involves activities like recruitment, training, and development of employees. In Formula One human resource management involves choosing the right drivers, engineers and designers who are expertds in their fields and also good team players. It also involves training new drivers, engineers and designers and keeping them satisfied and motivated so that they don’t leave and join other competitors. Firm infrastructure involves activities like general management, planning, finance and accounting. This can also be an important source of competitive advantage as management and planning are crucial to success in the racing industry. Value linkages are also an important source of competitive advantage in the racing industry. Linkages can be both internal and external. Internal linkages include co-ordination between various departments within the firm like the design team, racing team and the technical team. External linkages include co-operation and co-ordination with component suppliers and sponsors(Porter, 2004).Attributes are qualities or skills possessed by constructors. Attributes include trust, relationships, history and management structure within a firm (Barney, 1995). These skills relate to ways in which they do things. These skills and qualities are not easily transferable, as they cannot be easily copied. These skills and qualities are generally developed over a long period of time. Formula one constructors require attributes like knowledge, experience and flair for innovation. A firm’s capabilities are based on the resources it has. Capability means the ability of a firm to perform certain tasks based on the resources it...
Please join StudyMode to read the full document