Accounting information systems Ferrari

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Macquarie University *

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2050

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Business

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Apr 3, 2024

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docx

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18

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Report on Ferrari S.P.A Executive summary (Kunwar) This executive summarises the important elements of the elevators pitch, the company’s business situation. The objective of this summary is to answer the key questions target customers, customer needs, product name, market category, key benefits of the product, competitors, and the products differentiation from its competitors. Elevator pitch - Target customers o Ferrari has a niche target market, customer those high incomes, who want to display their high status. - Customer need o The main need of Ferrari’s customers is to use the company’s symbol to display their status which displays their wealth levels and success. - Product name o a highly exclusive and high-status car with only a limited amount of being produced. - Market category o Ferrari’s mainly focuses on the luxury car industry and does majority of its sales in Europe while the whole industry is worth of USD 617.36 billion. - Key benefits o Besides focusing on high performance and engine quality the company’s symbol has a separate status symbol. Due to the product being highly rare it comes along with the tag of being wealthy. - Competitors o Ferrari doesn’t have much major competitors besides Lamborghini. Both companies have products that show status and wealth of the customer. Ferrari offers more luxury along with more power and aggression compared to Lamborghini. - Product differentiation o Ferrari and Lamborghini both have amazing products, but Ferrari takes the lead with more powerful and response engines and the finest class of leather in the products which increase their luxury compared to Lamborghini.
Enterprise system and beyond includes components of customer relationship management, supply chain management and enterprise resource planning. - Customer relationship management o The main goal of CSR is to aid customers with product knowledge, acquisition, retention, and development of leads. For Ferrari this utmost important as customer satisfaction is a part of the product. The goal of Ferrari customer management team is to understand and communicate with eh customer to tailor the product according to their preferences. - Supply chain management o Having a on schedule supply chain is important as Ferrari wants the customer to have the product as quickly as possible. By previewing historical data for sales, a forecast can be made for the quantity of material that is needed according to the number orders being received. - Enterprise resource planning o By implementing a centralised system is makes it easier for different departments to communicate with each other, reducing communication issues that may arise. The system not only improves communication but also makes the company much more efficient. Implementing an ERP system in the process is proven to make a company much more efficient. There have been many examples of successful ERP systems but there have also been a handful number of failures which have led to companies collapsing. This process has been repeated by many companies in the automotive industry which gives Ferrari multiple examples to follow leading them to have a successful ERP system. A company faces many threats which can either internal or external. Internal threats can be resolved by having controls in place which reduces the possibility. A resilient internal control can reduce issues such as employee turnover, data theft, shifting customer preference and reliability of older products, the main cause for these issues being so frequent throughout the automotive industry has been the lack of internal control. To avoid this Ferrari has implemented controls for each issue which reduces the risk of customer dissatisfaction. Table of Contents Introduction (Rohan) The following report discusses Ferrari S.P.A and the business process it conducts whilst also providing an overview of Ferrari as a company, providing background to Ferrari and its specific target customers and details about its marketing strategy, The report
also provides an analysis of CRM, SCM and ERP systems in the automotive industry, the benefits of implementing CRM, SCM and ERP systems, The success and failure of implementation of ERP systems for Ferrari and a recommendation for Ferrari on what to implement into their business process. Lastly, this report discusses the top 5 business risks Ferrari faces as a company including employee turnover, risk of reliability issues on older models, risk of shifting customer preferences and risk of losing out to its competitors. Company Overview (Rohan) Ferrari S.P.A is an Italian sports car manufacturer that specialises in high-end automotive vehicles with fast speeds and high-class designs. They were established in 1947 in Maranello Italy by Enzo Ferrari. Ferrari is a mature company that has been able to run self sufficiently and is able to reach their target market easily and knows its customers' needs and wants as they have been providing high-quality automotive supercars for over 76 years. Who is the target customer? (Ryan) Ferrari S.P.A is very exclusive when it comes to who they decide to sell to let alone market to. The company likes to maintain exclusivity to its key products even outright refusing to sell to customers who do not meet their high demands (Drive, 2016). Ferrari’s target market is very niche to individuals with very high income who want to show off their high status, furthermore, buyers of Ferrari products need to pass a thorough background check and usually, the only individuals whom Ferrari sells directly to are those who are affluent personalities (Marketing91, 2018). What is the customer need? (Ryan) The main need of Ferrari S.P.A customers is to use the product as a status symbol. Unlike most other car brands whose main purpose is to get from point A to point B, the Ferrari brand acts as a very high-status symbol that shows off an individual’s wealth and success to their peers. What is the product name? (Ryan) The product that best captures the exclusivity and high status of the Ferrari brand is the 2022 Ferrari Daytona SP3. The car is limited to only 599 units and will have a price tag of 2.2 million euros (Bharath 2021). What is its market category? (Ryan) Ferrari mainly competes in the luxury car industry. The industry is worth USD 617.36 billion in 2022 with the majority of sales in Europe (Grand View Research n.d). Despite the majority of sales in Europe, there is a strong trend towards market growth in China with its global share in the market growing from 21 percent to 35 percent by 2031 (Guan
et al., 2022). The luxury car market aims to serve the highest-wealth consumers, with the niche market category of luxury cars valued at over $500,000 expected to see the strongest growth within the luxury car market due to the increase in ultra high net worth individuals in countries such as China and the Middle East (Guan et al., 2022). This is where most of Ferrari’s key product line falls under. What is its key benefit? (Ryan) Ferrari’s key benefit is not only its extremely high performance and quality as a motor vehicle but also its ability to be a status symbol. Due to the exclusivity Ferrari imposes on its products, owning a Ferrari is perceived as an extreme show of wealth and prestige allowing its high net worth customers to stand out amongst the crowd and be associated with the luxury brand of Ferrari. Who or what is the competition? (Ryan) There are many competitors within the luxury car industry however by far the most competitive rival is Lamborghini. Both Ferrari and Lamborghini allow their customers to show off their prestige and wealth by associating with the brand and its exuberant prices, as well as both cars offering similar amounts of power and quality. What is the product’s unique differentiator? (Ryan) Ferrari’s unique differentiator between its product and that of its key competitor Lamborghini is that Ferrari provides a lot more raw power and aggression compared to Lamborghini which chooses to focus on the luxurious nature of the car (Fastrack Experiences n.d.), Ferrari offers a powerful amount of acceleration allowing it’s drivers to reach the full capabilities of the vehicle in record time. Apart from that direct rivalry, Ferrari also stands out from others in the motor vehicle industry through its exclusivity and high quality.
Paragraphs: Failed ERP implementation (Kunwar) Hershey’s a famous business that introduced many delicious snacks, had over 17,000 employees and brands that would generate the revenue to be $8 billion USD. The company rushed into implementing the system by adding it to their process within 30 months rather than the suggested 48 months. The company issued the replacement of their IT staff with three new system. SAP R/3 ERP software, Supply chain management (SCM) software, Customer relationship management (CRM) software. Hershey approached all three system together which resulted in then collapsing due to lack of communication within departments which restricted them from keeping up with the customers’ needs which led to an enormous sales loss. The lesson that can be learnt from Hershey is to plan with organisation and spilling the process into small section which reduce the possibility for a major error to occur as each process is investigated thoroughly. Have communication with each department and have responsibilities clearly stated. Do tests runs before introducing the system into the real world. In 2005 waste management planned to implement an ERP that would go live by 2007 and bring in 220 million in annual benefits. The ERP planned was meant to replace the old cash to order system which included billing, collections, pricing, and customer account setups. To develop the ERP the contract was given to SAP as they would not have to make any major customisation to the system as was created for the US market. Before the system could be implemented to real life situation it had displayed sign that proved the system was not fulfilling the requirement of the business which led to the system completely failing before even being used in real life situations. Waste management stated that SAP was the one at fault as they had promised a customized system but what waste management received was generic. It is important that not every deal is successful and requires a lot of research and background history. Waste management made the mistake by trusting SAP which led to their downfall. In 2010 lumber liquidators implemented a system that would automised the company's manual back-end process. The company’s sales had even increased by 6.7 million compared to last year, they even opened multiple new stores with the new system. But they had forgot to train the employees according to the new system. This lead too many employees being unable to complete certain tasks which ended up making the company lose millions of dollars. Much of the new system remained unused as they employees did not have sufficient knowledge about the system which included Identify open orders.
Track and process orders, measure how much inventory was in stock, complete customer orders on time, convert prospective leads into sales, produce the same number of finished goods per hour. What we learn is that spending money on developing is not the only important part but it is also important that the people that are using the system are also taught about the system so it can be most efficient in completing tasks. There was a lack of communication as the magnet team of the company did not take into consideration that the new system required steps to be taken on certain time and certain ways which reduced the workforce’s flexibility which caused confusion. Enterprise Systems and Beyond Analysis of CRM, SCM, and ERP System Implementations in the Automotive Industry Customer Relationship Management (CRM), Supply Chain Management (SCM), and Enterprise Resource Planning (ERP) systems are essential accounting information systems that have significantly transformed businesses across industries, including the automotive sector. These specific types of accounting information systems have often been credited with contributing to the optimal performance of businesses (Saad, 2023). In the automotive industry, these systems facilitate streamlined processes, enhance decision-making capabilities, and foster improved communication among different organizational departments (Samuel, 2013). In the context of a renowned brand like Ferrari, such systems hold the potential to dramatically increase operational efficiency, elevate customer satisfaction, and optimize supply chain operations.
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