hi everybody in the year 1908 a small Workshop owner took his 10-year-old son to a race course in a small town in Italy for most people this race was merely a source of afternoon entertainment but for this 10-year-old kid it was the most exhilarating experience of his life he heard the engines Roar the people screaming and as the cars race through he smel the scent of the burning rubber tires we the [Music] [Music] and that's when this kid decided to build the best race car in the world little did The Spectators of that race know
that they were witnessing the birth of a legend because the kid that they saw was none other than Enzo Ferrari and the cars that he would build would go on to build the most iconic automobile company in the history of the world which we all know today as Ferrari [Music] 1947 it was more than a new car it was a statement of intent his victories and defeats his desire for both performance and Beauty the winner of the sing Grand [Music] Enzo had lived the dream as a racing driver built a worldclass motor racing team it's
the only brand that has been continuously part of Formula 1 racing from 1950 onward Ferrari is the name that has given Italy its reputation for producing some of the fastest sleekest and most eye-catching cars on the planet and if you look at how far far ahead Ferrari is today in the market take a look at this chart in fi23 Mercedes had 170,000 employees and sold 2.49 million Vehicles BMW had 154,50 employees and sold 2.5 million Vehicles whereas Ferrari only has 4,988 employees and they sold only 13,660 cars but if you look at the valuation of
these companies while Mercedes has a market cap of $73 billion BMW has a market cap of $60 billion whereas Ferrari has a market cap of $77 billion so in spite of selling 1990 times less cars than Mercedes Ferrari is still more valuable than both these companies now if you look back at history there was no practical way Enzo Ferrari could have built an $80 billion company because when he started he had no money no Rich connections and most importantly he built the company during the worst period in modern history which was during Great Depression and
the World War II but when he died he was worth $100 million and he was known as one of the greatest engineers in history so the question over here is how is it possible that a poor kid with no money and no engineering background went on to build the most iconic automobile company in history how did he manage to build a million dollar company even during Great Depression and World War II and most importantly what are the lessons that we need to learn from the iconic rise of Enzo Ferrari this video is brought to you
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SEO click the link below and explore their 360 package and Enterprise package to find what suits your business [Music] best this is a story that dates back to 1908 when Enzo was just 10 years old and like I said before he found the calling of his life when he heard the Roar of the engines and smelled the scent of burning tires and while Enzo dreamt of becoming a race car driver life had different plans when he was just 16 years old two tragedies struck him and broke him World War I started in 1914 and by
1916 there was a massive outbreak of Italian flu it's 1918 for four terrible years more than 40 countries have been mired in the bloodshed whole globe was influenced by this war more soldiers died of the flu than were killed on the battlefield during 4 years of fighting this flu killed both his father and his brother and this loss not just devastated his family emotionally but even caused a financial nightmare because their business had collapsed and that to during wartime so he had no option but to drop out of school and work as a mechanic in
a workshop and eventually he even served in the army during the World War I just to support his mother but you know what guys even in such chaos Enzo spent a lot of time trying to understand how machines work and how engineering works with the military staff in the Army and fortunately after a few years the war ended in 1918 and at the age of 22 Enzo Ferrari joined a luxury car company called Alpha Romeo as a driver for those who don't know Alpha Romeo's cars participated in Italian Motorsports and it was known to be
one of the best car manufacturers in Italy and while most people in Romeo saw Enzo as just another driver Enzo was so amazing at his work and overd delivered to such an extent with his leadership sales and operational skills that he was appointed to manage their racing Department in 1924 this is what marked the beginning of Ferrari the brand when in 1929 Enzo formed a racing team called Scuderia Ferrari this agreement between Alpha Romeo and Ferrari was pretty simple Alpha Romeo would give Enzo the best and the most sophisticated equipments in the country and in
return Enzo was supposed to lead his team to build great race cars that would win championships so Enzo Ferrari worked tirelessly day in and day out just to design the best race car Italy had ever seen and soon enough he was so successful that he won multiple championships throughout the 1920s and 1930s now you tell me guys after winning so many championships and races if you won Enzo you would expect a raise and recognition from the company right well guess what in return Enzo Ferrari was laid off from the company because it was too expensive
to run a race car segment on top of that they did not allow Enzo to use the name Ferrari for the next four years as a non-compete Clause so do you realize after working so hard and getting such great results if somebody lays you off and prevents you from using your own name how would you feel terrible right that is how Enzo felt but this time he was not a poor innocent boy who would let circumstances drive his life this time he decided Ed that he would go headon against Alpha Romeo itself and build a
race car that is better than the luxury cars of Alpha Romeo so he started his own company called Auto Avio costro Yuni and just as he was getting started with his designs something tragic happened again in [Music] 1939 the German bombers swoop over polish land polish citizen Harbors are attacked even the capital of waro is bum Germany and Italy declare war on the United States it is the first and only time Hitler actually declares war on another Nation the wars in Europe and Asia now merge into a single gigantic World War the largest war in
history for those who don't know World War II was fought by two forces the Allied Forces which included Britain America and Soviet Union and the axis forces which consisted of Germany Italy and Japan so when the war started Italy was attacked by both British and American forces so factories were bombed millions of people died due to both bombing and fighting and a huge chunk of Italy was infected with poty so obviously nobody cared about racing or race cars so the question over here is in such a terrible condition how did Ferrari survive well fortunately in
the wake of War Italy needed all of its factories to produce War equipments and here's where Enzo got a military contract from the government to manufacture War equipments to generate Revenue but again just as he was trying to make money for survival his Factory was bombed because of which he had to shift his Factory to another location but you know what just as he was trying to rebuild this Factory this Factory was bombed again now you tell me guys if you were Enzo what would you do your father has passed away your brother has passed
away your business is failing you've been laid off from your own team the world has witnessed two of the most devastating wars in the history of mankind and your only source of income has been bombed twice in this situation what would you do would an ordinary person ever feel motivated to build a race car in this situation not at all right but you know what even while Enzo worked day in and day out to build his Factory he set up a secret unit within the factory specially for Designing cars such was the passion of Enzo
Ferrari as they say the true test of passion is not in the pursuit of dreams but in your unwavering dedication even during adversity so again he waited for the storms of War to pass till 1945 and after this war in the year 1947 Enzo Ferrari started a company and named it Ferrari to build the best race cars in the world it was a statement of intent the beginning of a culture of Excellence spanning 70 5 years now the question over here is when Italy was suffering from poverty when the economy was doing so badly what
made Enzo think that anybody would care about his race cars well somehow Enzo thought that even though most of the country was suffering there was always a small segment of rich people in Italy who would appreciate and own a luxury car so with this crude market research and his Relentless passion Enzo worked hard again to build a car that went down in history as one of the greatest cars ever produced this was the Ferrari 125s which launched in 1947 with a very very special 1.5 L V12 engine so this breaks the question what was so
special about this candy looking car that it is considered to be one of the greatest cars ever built well there were three reasons for that number one while most cars could reach a top speed of 60 to 80 mph luxury cars could hit 100 mph and high-end sports cars could hit 120 m per hour but Ferrari 125s could hit a top speed of 130 mph which is 210 km hour that to back then in 1947 secondly more than the speed it was the perfect balance of something called weight and horsepower and this fascinated Engineers all
across the world for those who don't know horsepower or HP is a unit of measurement that is used to describe the power of an engine think of it as a horse pulling a car so a more powerful horse will pull the cart faster and with greater force as compared to a less powerful horse similarly in the context of an engine an engine with more horsepower can accelerate a car more quickly and Propel it to a higher top speed as compared to an engine with less horsepower but the catch over here is that if you increase
horsepower automatically the weight of the car increases why because when you increase horsepower you need a larger Engine with more cylinders you need a stronger internal component system like pistons and connecting rods to handle the increased force and stress and most importantly during acceleration higher horsepower engines generate more heat so they require a larger cooling system which can again add to the weight of the car this is a reason why the measurement of a car's performance is done with a unit called horsepower per ton or HP per ton as in how much horsepower does a
car have per ton of weight so the higher this number the better would be the performance of the car now if you look at the Ferrari 125s it was so stunningly designed that while Alpha Romeo had a power to weight ratio of 60 HP per ton BMW stood at 95 HP per ton whereas Ferrari and Masarati stood at 181 and 229 HP per ton so do you realize Enzo Ferrari outperformed Alpha Romeo which was a company that he worked for with his very first car itself this along with the legendary driver is the reason why
Ferrari was able to win championships after championships they made their debut in 1950 and in Just 2 years time that is in 1952 the Ferrari team won its first world championship this is what brought Global recognition for Ferrari and lastly because the cars looked like a work of art Ferrari cars became an aspiration for the rich not just in Italy but all across the world in fact Enzo had a simple philosophy build a car that performs exceptionally on the track and beautiful enough to be displayed in a freaking Museum so Ferrari cars were not just
cars they were artworks and they were the epitomy of great design and great engineering every curve every went and every line on a Ferrari was so meticulously crafted that it did not just enhance the performance but also pleased the eyes of the viewer so just like Michael Jordan's Nike shoes and Steve Jobs Macintosh Ferrari became a masterpiece which people craved to see this is how Enzo Ferrari laid the foundation for Ferrari the brand so this was fantastic right Ferrari was a superstar and they had won World Championships so Enzo Ferrari must be rolling in money
right well guess what the company's books were actually bleeding why because even though Ferrari was an aspiration Enzo was so obsessed with quality design and performance that the company could not produce enough cars for the demand that it had in fact models like the Ferrari 250 GTO they were produced in such limited quantities that only 36 units were made so this way although Ferrari became a rich man's rare possession ironically the company itself was going bankrupt because the entire focus of Enzo and his team was on the race programs and developing new models of the
race cars and these activities were extremely costly and timeconsuming so this was the bottleneck that was bleeding the company at the same time Enzo was so Infamous for his management style that people say that he would purposefully pit the drivers against each other in the same team and put so much pressure on them that some drivers even lost their life during the race this made things even worse for Ferrari and by the late 1960s the company was on the brink of bankruptcy so the question is again how did Enzo Ferrari save his company well he
first approached Ford for Capital but the deal did not go through and then in 1969 Enzo Ferrari sold a 50% stake to Fiat and this partnership helped Ferrari in two ways number one Fiat provided the necessary Financial stability and resources to continue developing new models and to support its race programs and number two with fiat's support they increased their production capacity from 619 to 1,246 car and eventually they spent more money into developing new models this is when Ferrari built a big Factory to scale his business business and here's where the dream of Ferrari picked
up again Ferrari went on to win 200 gropery races and 16 Constructors championships and eventually it became one of the most successful teams in the history of the sport but you know what guys even after that as decades passed by Ferrari began to be perceived as an average Italian car brand because while Enzo believed that a car's true beauty lay in its ability to win races and not in its exterior design or lavish features the next generation of the rich wanted more luxury and more aesthetic cars even on the exterior so the market taught Enzo
Ferrari that ego is the Anastasia that deadens the pain of stupidity and this is the reason why Enzo had to get out of his own box and he had to collaborate with renowned designers all across the world and the result of these collaborations were some of the greatest cars in the history of Ferrari this is how in 1984 Ferrari launched the Ferrari Testo Rosa which me on to become the best selling Ferrari in the 20th century 1991 Ferrari test Roa that legendary and unmistakable after witnessing the dream of Ferrari the brand Enzo Ferrari passed away
in 1988 and while most people retire at 60 or think of retiring at the age of 30 because of Instagram Enzo Ferrari worked on Ferrari until the age of 90 that is how much he loved cars and loved engineering but this is why ladies and gentlemen a new era for Ferrari was born with a new chairman named monteo and what Tim Cook did to the legacy of Steve Jobs is what montolo did for the legacy of Enzo Ferrari and just like Tim Cook turned Apple from a hardware company to a software company Mont zimolo turned
Ferrari from an automobile and race car company to a luxury Lifestyle brand and you would be shocked to know that today Ferrari sells products like perfumes caps and t-shirts and commands such a high premium that I've just come to Dubai over here and I saw the market and here while a decathlon cap sells for 35 Dam the most expensive Nike cap cost 200 Dam whereas a Scuderia Ferrari cap sells for 231 dams now logically speaking you tell me does it sound practical that a car company like Ferrari can make better caps than a World Market
leading sports brand like Nike no way right but you know what you would be be shocked to know that by selling such products at a very high premium Ferrari just made $572 million so the question over here is how is it possible that a car company is able to sell lifestyle products at more cost and more margin as compared to specialist lifestyle Brands themselves well this is where Ferrari's genius marketing strategy comes in and this marketing strategy can be defined in three pillars number one is visibility number two is aspiration and number three is a
strange sounding name called the hallo effect the first two pillars are pretty obvious for visibility Ferrari partnered with legendary drivers like Michael Shaker seven time world champion a man who introduced a generation of fans to the sport of Formula 1 Michael Shaka one word for Michael a hero this partnership is considered to be one of the most iconic Partnerships in F1 history scharer joined Ferrari in 1996 and went on to win five consecutive drivers championships from 2000 to 2004 so in the 1990s and early 2000s as Michael sharker started winning championships as Michael schearer became
a legend like Michael Jordan it led to a large scale visibility and aspirational appeal for Ferrari the brand all across the world at the same time movies like Fast and Furious bad boys and Italian job they all started featuring Ferrari with their main character to build an insane aspirational value for Ferrari and and this is why ladies and gentlemen the third pillar comes in which is known as hallo effect did you know that there is actually a part in our brain called prefrontal cortex this part plays an important role in emotional processing and social cognition
so when we encounter someone or something the prefrontal cortex helps us form an overall impression based on the limited information that you have this initial impression can then influence your judgments and evaluation even if they're unrelated to the original impression this is what you call call as hallo effect in case of Ferrari when we first encounter a Ferrari lifestyle product like a watch a jacket or even a pair of sunglasses our prefrontal cortex quickly processes the available information now what are these available data points number one is the visual you see the iconic Ferrari logo
which leads to Brand Association so with your existing knowledge and associations with the Ferrari brand your brain Associates the Ferrari logo with luxury performance and exclusivity this is what creates the impression of perceived quality which means even if that watch perfume or jacket is made up of the same material as a Nike or Woodland you would by default assume that a Ferrari jacket is exceptionally wellmade and is more durable as compared to other brands like Nike or Woodland this is what leads to perceived value so if I give you 20,000 rupes to buy a jacket
and if I ask you to choose between a d catlon Nike and Ferrari you would assume that D cathlon is cheap but durable Nike is for sports enthusiasts and Ferrari is more premium and is made up of higher quality material so with 20,000 rupees you would conclude that a decathlon jacket is worth a maximum of 5,000 rupees Nike would be worth 15,000 rupees but a Ferrari jacket is worth 20,000 rupees this is how hall effect created by the initial impression influences our decision-making processes and enhances the perceived value of the product as a result the
price of the product is Justified by the brain while purchasing even though it is completely illogical this is what gives Ferrari an unparalleled advantage over not just other car companies but even lifestyle Brands all across the world this is how first with Relentless passion for cars in engineering then with an obsession for great design and then with a genius positioning of Ferrari the brand today Ferrari has become the most iconic automobile brand in the world and this brings us to the last part of the episode and that are the business lessons that we need to
learn from the iconic rise of Ferrari lesson number one once a great man said nothing in the world can take the place of good old persistence Talent will not because nothing is more common than unsuccessful men with Talent genius is not because unrewarded genius is practically a cliche education is not because the world is filled with educated but unsuccessful people persistence and determination alone are all powerful in this case it was the Relentless passion and Persistence of Enzo Ferrari that turned a poor boy into a millionaire in spite of the occurrence of two world wars
and the Great Depression lesson number two education is not a result of a great University but a result of an unwavering urge to learn and mastering a skill in this case even though Enzo was a school dropout his unwavering urge to learn engineering turned him into one of the greatest automobile Engineers the world had ever seen and lastly when excellence and brand positioning are done right they can turn a symbol into a badge of honor and a commodity into a precious collectible in this case while Enzo Ferrari built the best cars in the world to
turn the Ferrari logo into a badge of honor Montello took this badge of honor and positioned Ferrari in the lifestyle Market in such a way that today Ferrari is able to command an extraordinary margin in the market this is the story and the lessons that we need to learn from the rise of Ferrari and I just hope you learn something valuable from this case study that's all from my side for today guys if you learn something valuable please make sure to hit the like button in ut to make you baba happy and for more such
insightful business and political case studies please subscribe to our Channel thank you so much for watching I will see you in the next one [Music] [Music]
