Table of Contents

Introduction _____________________________________________ 2

The internal or external driven needs for change _______________ 2
– The ‘Cops framework ____________________________________ 2
– Pestel-I _______________________________________________ 3
– Porter’s Five Forces _____________________________________ 4

The optimisation outcome to be achieved _____________________ 5

The readiness of the organisation to change ___________________ 5
– Vision for change ________________________________________5
– Empowering people for change ____________________________6
– Readiness model ________________________________________7

Readiness as a leader to lead change _________________________8

Appendix _______________________________________________9

Bibliography _____________________________________________10

Introduction

The Italian brand Alfa-Corse has been founded in 1958 by Antonio Alfa. The company, now guided by his son Rocco, has always been a benchmark in the last fifty years for the Italian automotive industry. The company is specialised in the production of sportive car who are mostly handmade by Italian artisan, which make their products a piece of art. Alfa is producing two different models: a four door GT and a sportive SUV, both with mechanical high-performance engine. The idea of the Italian brand is to target those who are looking for an everyday sports car (GT), as well as for families who need more space (SUV). Overall, people who are interested in the brand are by 70% already owners of sports cars and, generally, belong to a medium-high class. Company’s revenue is around 600 million and they produce approximately 4500 units per year. The target is to increase revenue to 800 million by 2025 and 1 billion by 2030 and, increase 25% of production by 2025. The main competitors, for Italian as well as for European market, are BMW and Audi, which might be more advanced about new technologies but more industrialised in its process-making.

(Table 1) Source: seminar slides

The internal or external driven needs for change

The ‘Cops’ framework

‘Cops’ framework it is used to internally scan organizations for the purpose of evaluate the healthiness of the organization itself, and to check if the whole internal systems are aligned together (seminar slides).

• Culture: Alfa is guided by a deep sense of family. The company has always been guided by the family who created it and employees, which many are in the company since long time, have this enormous sense of belonging that helps to inspires younger generations and make them feel the passion which is behind the brand. In his all history, the company has been synonymous of passion and craftsmanship, which makes it ‘different’ to any other sports brand in the automotive industry. However, the values of uniqueness and respect that his creator first and then his successor, have been capable to share with all the people involved in the process making, is the proof of how special a brand can be.
• Organisation: the company is organised as a functional organisation structure, which has the target to encourage people in specialisation. It helps the brand to ‘create’ main roles figures inside the company that can replaced, if needed, its superiors and it helps to kind of ‘separate’ the different department to create self-determination in it.
• People: all the people involved in the Alfa brand have an extreme awareness on delivery the best standard possible in terms of quality. To do so, the company has a mixture of ‘old guard’ employees (60% old staff and 40% new staff), who usually are working for the company by many years and pass their knowledge on to, younger employees. The experience shared by ‘old guard’ is vital to keep alive the high-quality standards and passion, especially in the process making department.
• Systems: during its 63 years of life, Alfa has always faced technology developments which have change several procedures. However, the focus of the company has always been to grow with technology but to maintain the same standards as the first day. To do so, the biggest examples is the textile department. Still in 2021, Alfa creates his own interior and seats using raw leather who is perfectly cut by laser machines and then handmade tailored by women artisan.

Pestel-i

Pestel-I is a framework that combines both Pestel and Porter’s five forces.

• Political: the EU has set a new parameter for CO2 emissions which are 78 g/km for 2025-2030 and 60g/km after 2030(ac.europa.eu). It means that, forced by EU laws, automotive company needs to adapt their products to a brand-new market. In essence, those rules do not allow engine cars to exist without the increment of electrification, such as hybrid systems or even full electric. This creates a huge obstacle for sports car, seen that its sector is characterised by cars with high performance engines that are the core of this products.
• Economic: the overall automotive sports industry is increasing, especially in the US, after a hard period of two years due to the pandemic where there has been a decreasing phase in orders due to the incapacity of the company to go back at normal working regime and, obviously, due to the uncertainty of the Covid (carsalesbase.com).
• Social: people are pushing for a desire to comeback at the ‘normal life’ before the pandemic which means travelling, enjoy life and spend money. The return to normality will surely affect our business too- generally speaking. In the last 5 years there has been a huge raising of Asian market probably due to the impact that occidental’s citizen is having on the Asian culture, especially China which is such a ‘closed mind’ country. In 2020, China was the first country to be hit by the pandemic and, counting this, the sales figure of the whole year has dropped of just 2% compared to 2019, which is incredible because countries as UK instead dropped of more that 25% (autocar.co.uk).
• Technological: the automotive industry is pushed for changing which, in the last 5 years, has introduced new important technologies in the sector (oponeo.co.uk). Firstly, it has been the hybrid technology and then the fully electric. Both have been applied to the sport niece as well.
• Legal: in Italy due to a law called ‘Superbollo’, basically the owners of cars, which have more than 180 kw of power, every year must pay 20 euros of tax for each kw in excess to the law’s parameter (automobile.it). This situation has caused a decreasing in sells in the Italian sports car market because a potential owner must pay every year at least 4 thousand euros per year more of taxes (ilfattoquotidiano.it). Even if the sum of 20 euros is cut after 7 years by 25%, it still creates a sort of legal obstacle that, maybe not all, but many potential customers are afraid of.
• Environmental: the whole word is now realizing that we must act in some way to reduce the human impact on the planet, and this has been applied to every sector in work as well as for everyday life.

As a result of Pestel, external forces are pushing this industry through a renovation which will be guided by implementing electrification. This is mainly due to the new EU parameter for CO2 emission which makes, as now, impossible to adopt existing engines for future sports car. Additionally, this sense of protection of environment that rapidly increases has brought a new vision inside potential buyer’s mind. Furthermore, young generation which are grown in this era of technology and hybrid system will probably be more willing to buy new technology (hybrid, electric) instead of mechanical engines (cnbc.com).

• Porter’s Five Forces Model:

After conducting a Porter Five Forces on the industry, is it possible to say that the highest threat comes from internal rivalry and threat of substitutes (ukessays.com). Internal rivalry it results high due to the high competition coming from German brand such as Audi, BMW and Mercedes which have even higher standards in terms of quality and customers tend to be very loyal and attached to those brands. Threats of substitutes is still correlated to the internal competition, seen that involves the same companies that might result attractive due to their existing use of advance technology and systems on their products (all their models have hybrid variant and several full electric vehicles). (For more information, see Appendix 1.)

The optimisation outcome to be achieved

According to the new EU parameter for CO2 emission, combustion engines would be facing a period of ‘transition’ first and then, after 2030, a sort of revolution. To be prepared as a company, Alfa must develop new specific that will make their products still competitive on the market. Therefore, we would follow the first order change seen that this is a sort of adaption for the company. The action plan of Alfa is divided in two parts: small and long term. In the small term, the company will work on the development of a hybrid plug in powertrain which is going to be implemented in the existing models by the second semester of 2024. These adjustments are essential to keep the products aligned with upcoming laws. Successively, as a long-term objective, Alfa will develop by 2026 his first ever fully electric vehicle which will be a 4 door GT, followed in 2027 by Alfa’s first electric SUV. Obviously, this will be a great development for the company which has to make changes in his production line. Alfa believes that with this adjustment, we would be able to grow in the market and hit the targets of revenue and vehicles productions for the next years. This is an ambitious plan which shows how the company’s plan is to preserve the essence of the brand, but always moving forward.

The readiness of the organisation to change

– Vision for change

For the vision statement, I decide to use the 5-step model.

– Empowering people for change
Alfa is moving towards and the innovation of electrification, first implemented to our engines and then full electric, will represent a milestone that the company has planned to achieve in this period of changing. To analyse all the factors involved in this change, a force field analysis has been conducted (see table 2 below).

(Table 2) Source: mindtools.com

Force Field analysis allows to understand the impact that potential forces could have on the proposed change, and it helps to make decisions (mindtools.com). As shown in table 2, on one hand is it possible to notice that the main pressure for change is an external factor. Successively, the other two forces are related to internal factors. However, is clear that those two forces are strongly related to the main pressure, and they may be seen as a sort of effects of it. The possibility to target new customer could enable to increase brand visibility and all the innovations that follow this change could be applied to our products and, therefore, guarantee to the brand to be always at the highest standards in terms of technology. On the other hand, lack of competencies with new technologies and potential employees’ attitude could represent some obstacle for Alfa. In essence, the forces for change represent the strongest push and, therefore, they reinforce the change proposal. (For more information see Appendix 2)

– Readiness Model

Table 2
The readiness model is a tool used to raise awareness of the organization’s readiness for change (seminar slides). The total score of Alfa is sixteen which means that the organizations is likely ready to change. (For more information, see Appendix 3)

Readiness as a leader to lead change

As a leader, I’m the one in charge to lead the company to success. It is not easy to do it in these periods of changing where all this uncertainty makes me think if my work was good enough to guarantee a brilliant future for Alfa. To evaluate my decision, I decide to use Kotter’s 8 step process and Kanter’s ten commandments. Looking at Kotter’s first, I believe that I have created that sense of urgency to firmly point out that we needed to change, and, through that, a new vison has been created. This vision has different point for the company itself as well as for all the workers who are part of it, and I consider that this has empowered people to act on the vision, not only in the working environment. The creation of short- and long-term objective has been fundamental to make clear to everyone involved, the fact that the company has clear in mind his future(mindtools.com). However, I believe that I focused less on the working culture but on the other hand, establishing a team that will help employees go through this process is something extremely helpful. Secondly, about Kanter commandments I can strongly confirm that leaving the past of the company behind, but having it always in mind, is vital step that enables us to grow as organisation. Nevertheless, I could have implemented a political sponsorship that could have made a stronger impact on us, especially on the workers. In addition, implementation plan could also make the next steps clearer and creating specific targets to be achieved that would push more the company through this changing. Overall, I believe it’s a good work but, if I followed more those two-changing model from the beginning, I would have made a stronger impact on employees and determined much more in this process.

Appendix

App. 1

Porter five forces is an exceptional tool to understand the attractiveness of its industry and highlight some of the key aspects. Combined with Pestel it gives a full overview of the sector highlighting key drivers factor and examining what is happening within the sector (seminar slides). Competition is high due to the many brands present on the market, especially in Europe, and the power of the customer is increasing because they have many options to choose and usually, they base their choice either on experience or innovations.

App. 2

It must be said that those values and forces in the FFA are more related to the EU market. However, in the US for example, it doesn’t exist any rules about the emission but there is much more competition and is a market where Alfa is not strong. Therefore, I believe that in these circumstances, the need for the company to target new customer is essential for increasing productivity. In fact, the changes are oriented to find new customer and be part of a sector that before, was unexplored by alfa. This will help to increase the probability to hit the targets in terms of revenue and productivity, focusing on different markets than EU.

App. 3

Even though the company scored 16, which means that they are likely to change, it does not mean that it would be easy. Usually, a number over 20 would represent a mind more open to change. In this situation, there would be several obstacles to change, which will not be easy to reach. I believe that one of the main obstacles would be related to the company itself and is experience with change. In all his history, Alfa has always been reluctant to change, and this is something that it can be percept especially in its older employees. To be different than past, the evolution must be accepted by employees first, and then we would be able to say that the company is moving in the right direction, without obstacles.

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