Decreasing production to increase profits at Ferrari

An article in the Financial Times (June 11, 2013) describes a plan to decrease production by Ferrari by 400 vehicles this year, down to 6,900 cars. The plan is to continue to maintain the exclusivity of the brand, add capacity and also offer lower cost branded consumer products to maintain revenues and increase profitability. Brand exclusivity is expected to generate an interest in jackets, bathtowels and sunglasses branded by Ferrari. But use of Ferrari engines in Maseratis, another Fiat brand, are also supposed to be enabled by the added capacity. Is this focus on exclusivity the right strategy for Ferrari and does it offer lessons for other brands seeking to maintain their global cachet ? Is the spillover of the brand success to sales of the higher volume consumer items a sustainable strategy ?

Advertisements

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s