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INTRODUCTION

McLaren was founded and formed  by a racer in New Zealand by name Bruce Malaren. In 1970, McLaren lost his life in the process of testing one of cars and right up to today the car bears his name in memory of him. This team is among the oldest present teams in the F1 and has been competing since 1966 right up to date .

In 1974, McLaren was the world champion with Emerson Fittipaldi and was the first world championship years later in 1976 they emerges victorious again in the world championship courtesy of James Hunt.

In the beginning of the 1980s,the Ron Dennis took over the Teddy Myer outfit as a result of a drop down of the grid of Teddy Mayer-run  outfit.

From 1984 right up to the early 1990s,the reinvigorated outfit was the first carbon fiber chassis which is the dominant force of F1 .McLaren founds a new engine partner with Mercedes after it separated  with Honda as a result of partnering with Mercedes , further world championships came in 1998 and 1999 respectively with Mika Hakkinen winning the award of the best driver in both years

The team was expecting more championship victories ,but unfortunately in the year 2007 ,the team implicated itself in a scandal because of too much concentration on it rival Ferrari as a result of this , the team was thrown of construction championship and heavily fined with $100m. Fernando Alonso and Lewis Hamilton had to lost the drivers the drivers tittle that year.

In 2008 records a new dawn of the team whereby it won the drivers\' tittle with the Hamilton. In 2015 ,the team partner again with Honda after splitting up with Mercedes in 2014. (Collantine, F1FANATIC, n.d.)

McLaren F1 world Championship was started by in private sport individuals in 1951.Nowadays, F1 is among the world\'s biggest motor sports even and it is second popular sport in the whole world .It is made up of 10 teams having two cars each and they are contesting in a seventeen series racing .Two titles are awarded one for the driver and the other for the constructor .With such ,F1  is highly technology dependent. (IvoryResearch.com, 2016)

    EXTERNAL ENVIRONMENT

Political:

The united states has imposed sanctions on Russia (economic sanctions) .Thus blocking  trading deals involving Russian companies. This is a threat to the company because it rivals can take advantage and enter the Russian market as a result of this McLaren F1 2017 will be out beaten in the Russian market .

Economic:

The united states has inflicted sanctions on the Russian economy because, Russia is having differences (conflicts )with Ukraine. Before the united states sanctions on Russia, the Russian economy was in its full capacity but had a higher level of corruption. The high level of corruption in Russia makes the economy not favorable for investors(The McLaren F1 ) to carryout investment in the country. This a threat to the company because the company will not like to invest in an economy whereby the level of corruption is high .When corruption level are high quality standards will not be met so McLaren F1 will not like to take such chances to invest in a country were the brand integrity would not be maintain.

Social:

Activist most especially social activist finds this very disturbing and look at it as an irrational action on spending lot of money in the purchase of McLaren F1 2017. Rather, they thought such money could be use in helping the poor and needy people .  This acts as a threat to the company because these activist can influence consumers with their message thus causing potential buyers of the car to have a negative perception that the car is too expensive

Technology:

In order for McLaren F1 2017 to maintain its competitive position, it must have a high innovative technology . Achieving this technological innovative strategy, McLaren must employ intelligent and creative thinkers and the production center must be the latest and most sophisticated. This is an opportunity for the company because with the sophisticated technology the company will always maintain standards with this McLaren F1 will always out beat it competitors because of its uniqueness and standard .

Environmental:

McLaren encourages environmental friendly activities this can be seen from the latest and most sophisticated or advanced stage of a technology, art, or science used in the production center thus creating excellence or distinctive friendly environment. McLaren is famous for producing  hybrid automobiles which are environmentally friendly. This is a great opportunity for the company especially that we are at the era whereby the world and most nations are becoming more increasingly sensitive to more friendly environmental  industries .Since McLaren portrays a very good image on its cooperate social responsiveness behavior and actions, many nations in the world would open up their doors to McLaren to invest in. (Sina , Jake, & Ali , MCLAREN AUTOMOTIVE-GLOBAL SUPPLY CHAIN)

Avoiding Market Entry Barrier in Mass Car Industry(Porters five force Analysis)

Analysis of the market entering strategies will be analyses using the porter\'s(1979) five force analysis.

Bargaining Power of Suppliers

The bargaining power of suppliers can be define as the capability for supplier to impact the price of a product. A very small number of suppliers for basic product caused a higher level of Bargaining power of suppliers. In the case of auto-mobile industries were they are few suppliers of highly performance spare parts like engines and technology equipment’s there is a higher supplier bargaining power. Usually new comers in the sporting car industries usually secure engines from different suppliers who are specialist in the racing engine. Partnering with suppliers that are highly specialized in the production of sport car engine would lead to a successful entry to the market. The challenges of bargaining power of suppliers were avoided by McLaren by establishing a partnering relationship with Mercedes. Mercedes provided engines for the Formula one and other road cars of McLaren.

Bargaining Power of Consumers

The bargaining power of customers can be define as the ability or capacity for the customer to have an impact on the price of a product or the customer\'s control on the production industry .As a result of fragmentation of McLaren customers, the buyers bargaining power  is very low because they have no control over the price or production .Furthermore, McLaren F1 is very exclusive non-homogenized and has a high level performance. The car is very symbolic to its buyers so therefore they have no control over its production or its price.

Threat of New Entrants

Competition in the sport car industry can be highly affected with the plausibility of new entrants. Threat of newly entrant is confined because it usually requires huge resources and capabilities for the car to be produce, marketed and distributed requirement of huge startup capital increases the risk of new entrants in the industry .McLaren uses diversification strategy in its sport cars .Formula 1 have been tailored or modified to meet specific needs of its customers for many years, rather than a compelling new car. McLaren already has a very strong brand image ,highly mature technological expertise ,well equipped production center and good buildings (infrastructural development) to eased it way in the car market.

Threat of Substitutes and Competitive Rivalry

McLaren target its customers using concentrated or niche marketing strategy as its produces very highly unique cars .The cars are usually produce in small numbers thus there is relatively low threat of substitutes .competition comes in from it rivalry who produce high class sport cars. But for the fact that McLaren production is very small ,the competition is taken care of and there are no threat of substitutions. (Strategic Management; McLaren group, 2017)

    

    SWOT Analysis of McLaren Formula one 2017

    Strengths

 Very fast car racing car

 Highly proficient drivers and very popular brand in  global championship

 It has and exceptional marketing and advertisement

 Records of the best quality

 Huge amount of fans globally

 Some strong contesters over the years have added more prestige to the championship

 Outstanding  TV coverage with a worldwide fans above 550 million

    Weaknesses

 Huge cost have  caused many teams to drop out.

 A lot of disagreement among FIA and FOTA

 Fans focus more on the quality of car rather than the quality of the drivers for the outcome.

   Opportunities

 Concentrate on increasing engines that are bio-fuel all this is to increase the cooperate social responsibility of the F1 and making it friendly to the environment.

 Looking forward expanding to new markets like South Africa and Russia.

   Threats

 Risks of the leading teams separating out from the F1 and creating their own league.

 Risk of excellent drivers leaving F1 and going to other form of racing.

 Risk as the Moto GP brand is growing more popular or it is gaining more popularity. (MBASkool, 2017)

    Internal Analysis

Resources can be categories under financial, technological, physical, organizational and human (Grant, The Resource-Based Theory of Competitive Advantage:, 1991)

Resources, capabilities and attributes required by Formula One

McLaren F1 financial resources is approximately one billion Us dollars ,the human capital require very innovative and creative staffs which composes of top engineers ,quality designers and aerodynamics and a varieties of systematic and composite experts staff members who are  highly monitor and work in a cohesive unit with constantly changing their strategies .Sophisticated testing and development equipment made up of wind tunnels and tracking equipment’s, highly sophisticated work place  make up the Physical resources. We can recognized aspects  of great competitive advantage in the Formula one industry (Porter, 2004). Technological development is a very vital factor for competitive advantage this technology development are all efforts used to better the car in vital aspects that can always out beat its competitors like speed and stability. Technological development can easily be achieve via  research and development. The recruiting department(Human resources department) has a vital role to play in the competitive position of McLaren because they have as duty to recruit employee with the require skills and capabilities and most of the time they are involve in trainings and development of its employees making sure that standards are met at all time and levels.

The formula one resource personnel’s are involved in the following steps

-Selecting perfect drivers

-Choosing skill Designers and Engineer who have a good mastering of their field

-Giving Training to newly recruited drivers ,designers and engineer while ensuring that they are being motivated to perform their job requirements. With the workers being motivated they can’t leave the company to join their competitors.

Activities like Planning, Finance and Accounting as the general management make up the firm\'s infrastructure. The infrastructure formula  one can be a very competitive advantage as adequate management and planning is very important and vital for the success of the company .

An important source of competitive advantage are the values linkages. These value linkages can be internal or external. Internal linkages can be seen from the coordination among the departments inside the firm like the technical, racing and design teams .Meanwhile external linkages comprises of the relationship that exist between sponsors and suppliers (Porter, 2004)

Qualities and Experiences owned by the contractors made up the attributes. The historical and management structure with in the firm, relationships and trust are all elements of attributes in a firm (Barney, 1995)The manner in which things are done in the industry is solely as result of the skills and experiences they possess. Quality and experiences and skill are not readily interchangeable ,they cannot be freely replicated .Experiences and qualities grows with time. Thus attributes like skill, knowledge and expertise to be innovative.

The capabilities of Formula  1 are as a result of it resources it has. Capability is the firms competence to perform specific jobs based on the resources it has. The integration of attributes and basic resources forms the capability of a firm thus Formula one capabilities are the origin of its competitive advantage

Identification of the major resources and capability of an organization is very important because a combination of particular resources and capabilities need to be sorted out. Efficient communication between personnel’s and other resources form the capabilities of a firm. The capabilities needed by formula one contractors are technological, engine manufacturing and car design. The basic capabilities cannot be share by the firm\'s competitors. The strategy of on organization should be made up of its basic capabilities and key resources to have a competitive advantage (Grant, 1991).thus Formula one has a unique capability of its engine. Core competencies are the key capabilities which results to competitive advantage.

 (IvoryResearch.com, 2016)

   Business Strategy

Segmentation

McLaren F1 2017 carry out a market segmentation of all fanatic and lover of all automobile racing.

   

Targeted Group

McLaren target mostly people from the age limit of 15-60 years both male and female with high income i.e. very rich.

Positioning:

The value proposition of the brand i.e. the full mixed benefits upon which McLaren is differentiated and positioned is High quality and high speed racing car (MBASkool, 2017)

Product Differentiation: McLaren F1 started producing T-shirts ,face caps, and Jackets that is found in its online shop where fans can always visit and purchase .Some of the T-shirt have the names of some of the Drivers, making it easier for fans to get to the online shop of McLaren to purchase their products. (mclarenstore.com, 2017)

In order to improve its performance in 2017,McLaren Formula 1 Racing expands Stratasys Additive Manufacturing to upgrade  2017 Car Performance

In order to advance the production of McLaren F1 PolyJet 3D and Stratasys FDM printer solutions are used to manufacture parts that would be use in the McLaren MCL32 racing car

For immediate evaluation during tests and races ,the 3D printer would be used to produce tooling and parts base on demand. This can be done by trackside using the 3D printer

The goal of using the 3D printer and the Stratasys FDM is to bring in a new development in the racing car tin a shorter timeframe

The 3D printer parts invented to increase achievement and performance in the 2017 race car include

Hydraulic Line Bracket:

Using Stratasys FDM technology, the 3D printer has been used to develop a structural bracket which is attach to the hydraulic line of McLaren Honda, thus improving  a Fortus 450mc Production 3D Printer that has a carbon-fiber reinforced nylon material. The production of the bracket takes just four hours as compare to the traditional manufacturing process of two weeks

Flexible Radio Harness Location Boot:

A two way communication input system was newly included to McLaren F1 2017 racing car though the cable seems diverting the driver. From the advantage of the Stratasys J750 3D printer and its capability to print easily, together with 3D printer greatly improve the communication system of McLaren 2017.The 3D printer is so effective that in just two hours it iterated three different design and printed them out .This leads to the luxury radio equipment that was used in the 2017 season of the Grand prix race.

Rear Wing Flap:

The rear downforce was improved using the rear wing flap .It is manufacture from Carbon fibers compounds using the 3D printer and 900MC 3D printer FDM based fortus production. High temperature of 350 degree F/177 degree Molded in 1010 ULTEM. It takes three days thus securing time and the limited analytical period .

The constantly customization and upgrading of McLaren F1 car layout is because  it would be very easy for its ability to test new product (designs) faster ,this will make Formula one more lighter and increases it factual emphasizes to upgrade the car\'s performance. If the company brings in new designs and developments  earlier like new parts and new ideas in terms of the design and looks it would make Formula 1 more competitive. Using Stratasys 3D printing in the manufacturing processes, helps in decreasing the lead times thus expanding the complexity of the parts. (businesswire.com, 2017)

   Corporate Strategy

   Diversification as a Growth Strategy

Diversification “Requires a correspondent movement from the current product line and the current market structure (Ansoff, 1957)

There exist two key types of diversification called the unrelated and related diversification (Charles et. al)

    

Related diversification can be divided into the following:

 Horizontal

 Vertical

 Cross-sector

1. Horizontal Diversification

Horizontal diversification is observed when a company engages in a new business under the same company and uses same value chain as of it basic business. McLaren has not used the Horizontal diversification.

    2. Vertical Diversification

Vertical diversification can be observed in an industry in a situation whereby the industry gets into a business that shares common company with different value chain (Charles et. al).The establishment of automotive business, caused McLaren to engaged in Vertical diversification. In its starting years, it constructed different designs of cars like the formula 5000 ,formula two .In 1992, McLaren invested in the undifferentiated market of cars and offered a different version of the McLaren F1 called the super car .subsequently ,Mc collaborated with Mercedes to produce the iconic Mercedes SLR McLaren (William, 2009).Luxury consumer cars were being manufacture using sophisticated automotive ,high technological production unit. Due to the sophisticated and high tech automotive unit, Mc have developed itself as a worldwide brand and it is looking forward for the production of a recently MP4-12C luxury car. Furthermore, the highly developed electronic business system highly qualifies the company to attain vertical diversification. As a result of this electronic system, McLaren created sensory devices for the McLaren F1 racing team. The business is involved in a different production, distribution and customer outlets, but functions in the same industry as the McLaren key business (McLaren, 2013)

Cross Sector Diversification

This can be observed in a situation whereby, a firm engages in business with another industry that they have the same value chain as of its key business( (Charles et. al).McLaren invest into this type of diversification through advertising and marketing business. Also ,McLaren engaging in a venturing business of hospitality and event management makes  McLaren  ready for the cross sector diversification. Hospitality and event management shares similar value chain value as of the key racing business of McLaren to a greater extent that both of them take care to serve its own customers and the internal demands of McLaren Group. The marketing of McLaren ignored the marketing activities of the group other than operating as different entity with absolute Taste(Event management and hospitality business of McLaren) takes care of Formula one customer as well as serving loyal customers worldwide.

Unrelated Diversification

Unrelated Diversification happens when a firm get to a different industry with a new product which is different from its core business and the firm is not looking forward to earn any value chain alliance (Charles et, al. 2010).The used of applied technologies by McLaren can be classify as an unrelated diversification because it involves an absolutely different value chain in terms of customers, production and suppliers. This business engages the development of innovative technologies for the field of entertainment, sport, medicine, and biomechanics (McLaren, 2013)

It is good to be aware that this business however gain from McLaren\'s overall expertise in the field of technology to contributing enhance high technological problem solving systems thus is cannot be designated to be unrelated diversification. (Strategic Management; McLaren group, 2017)

Recommendations

Based on the threat of separation of leading teams to form their own, the company can increase the motivation of the team player and driver so that they will not separate .

Since other Motor GP brand is growing and fast coming popular, Mclaren F1 can increase can protect the brand name by increase it level of advertisement with this more people will be aware of the brand .

Since Mclaren F1 is expensive ,Mclaren F1 can introduce an entering level car that customers and fans can have the feeling of F1 before getting to the proper McLaren F1 .The entry level can be use as team B mostly to train newly recruited drivers .This will solve the problem of high cost and also it will encourage teams not to drop .This too will help to increase the quality of drivers since we need outcome and not quality of the car.

A lot of disagreement among FIA and FOTA ,they should be an agreement between the two organization.

References

 Ansoff, I. (1957) Strategies for Diversification. Harvard Business Review. Vol. 35 Issue 5

Barney. (1995). Looking inside for competitive advantage, Academy of Management Studies (Vol. 9).

businesswire.com. (2017). Retrieved from www.businesswire.com: http://www.businesswire.com/news/home/20170407005040/en/McLaren-Formula-1-Racing-Deploys-Stratasys-Additive

Charles E.,  Bamford, G. and West, P (2010). Strategic Management. Cengage Learning

Collantine, K. (n.d.). Retrieved from http://www.f1fanatic.co.uk/f1-information/f1-teams/mclaren/

Collantine, K. (2017). http://www.f1fanatic.co.uk. Retrieved from F1FANATIC: http://www.f1fanatic.co.uk/f1-information/f1-teams/mclaren/

Collantine, K. (n.d.). F1FANATIC. Retrieved from www.f1fanatic.co.uk: http://www.f1fanatic.co.uk/f1-information/f1-teams/mclaren/

Grant, R.M, (1991). The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation, California Management Review. Vol.33, No.3, pp 114-135

IvoryResearch.com. (2016). Retrieved from www.ivoryresearch.com: http://www.ivoryresearch.com/writers/alan-taylor-ivory-research-writer/

MBASkool. (2017). Retrieved from www.mbaskool.com: http://www.mbaskool.com/brandguide/sports-teams-and-events/5899-formula-one-f1.html

McLaren (2013) Vodafone McLaren Mercedes. Available from http://www.mclaren.com/formula1/page/mclaren-group (cited on 8th, March, 2013)Porter. (2004). Competitive Advantage: Creating and sustaining superior performance. New York.

S. M., J. B., & A. D. (n.d.).

S. M., J. B., & A. D. (n.d.). MCLAREN AUTOMOTIVE-GLOBAL SUPPLY CHAIN.

Strategic Management; McLaren group. (2017). The WritePass Journal. Retrieved from https://writepass.com/journal/2016/10/strategic-management-mclaren-group/

William. (2009). The Cars 1964–2008. . Coterie Press.

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