Case Study

Pirelli tyres in the Formula 1 (cartoon case)

4 pages
December 2014
Reference: IMD-7-1536

This case study describes the implication of an important change in the Formula 1 rules for the 2012 season. Pirelli was chosen as the sole supplier for all Formula 1 tyres, and the six types of tyres forced racing teams to make some tough choices in every race. For example, tyres are either durable or have a good grip, but not both.The background for this change is provided in the case: the Formula 1 is a complex ecosystem (or value constellation) with decreasing revenues. The reason for the decreasing revenue could be the dominance of one driver, Sebastian Vettel. It is assumed that if one driver wins too many races, some of them from start-to-end, TV viewers tune out. So the new tyres rules should make the races more strategic, because it requires more pit-stops. Pit-stops are interesting for two reasons. First, they are a “race in the race”, secondly, every pit stop changes the ranking of the drivers. The case concludes that, despite all these changes, the revenues for 2013 went further down.

Learning Objective

The case helps to understand the interplay between different actors in a value constellation. Participants learn to identity critical success factors (CSF) in a given industry (i.e. interesting races) and to link those CSF to resources (i.e. rules of the race, the tyres used, etc.).

Keywords
Value Constellation, Business Model, Television, Sports, Entertainment
Settings
Global, Italy
Travel and Leisure, Entertainment, Travel and Leisure, Sports
2012-2013
Type
Published Sources
Copyright
© 2014
Available Languages
English
Case clearing houses
IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Discover our latest research
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics