Case Analysis DucatiEssay Preview: Case Analysis DucatiReport this essayCase AnalysisDucatiDucatis has had much success in the past, but there was still concern for the future of the company. Ducati could not continue to grow indefinitely and the challenge is how they can approach this with the right strategy that may overtake these bounds that allow for continuous growth.
Federico Minoli was named by Forbes magazine as the “turnaround artist” in which he had transformed a company on the verge of bankruptcy into one of the most profitable motorcycle manufacturers in the world. Under Minoli, Ducati experienced great growth and profitability. Revenues had quadrupled since 1996. EBITDA had grown from 33.4 million Euros in 1997 to around 60.0 million Euros in 2000. The market share had gone up from 5.1% in the sport bike segment in 1997 to 6.7% in 2000. At the end of April 2001, Ducati had a market share of almost 7% of its relevant market, with its goal of 10% market share in near sight.
There are a couple ways Ducati can approach their goal of trying to achieve that extra 3% market share. One alternative would be to enter Harleys niche of the cruiser market. 400,000 of these units were sold in 2000 which makes it a tremendously large segment in the large displacement motorcycle industry. Ducati can also advertise itself more broadly, to attract a wider base of customers, rather than strictly through specialized magazines. Ducati can also increase their R & D spending. In 2000, they only spent 1.1% of revenue in R&D while Harley spent 2% which is almost double that of Ducati.
My final recommendation would be for Ducati to come up with a cruiser model so they are able to compete with Harley, and the 400,000 that Harley sold in one year. In doing so, they will attract a much broader market of customers and gear more toward the laid back easy go riders, rather than be mostly geared toward the die hard adrenaline seekers. Ducati already has their own interpretation of the cruiser with Ducatis “desmodromic L-twin engine”(Ducati,pp.14) If they are also able to price these cruiser models at similar prices of Harley at around $10,000 to $20,000, I believe they will be able to take a large amount of customers from Harley and redirect them to Ducatis way.
In addition to being the perfect addition to the set, the 800,000 is the biggest and best looking Ducatis and is already set to produce a substantial number of riders to follow.
This is about the time we are looking for a brand new, reliable, affordable motorcycle. That is what we want in the brand new 500 Series. These motorcycles are capable of being the next big thing and the best thing for the community. We have seen riders go a long way because of those who follow. They can follow their bikes from different areas to different destinations and to other places, all at a fair price. We are just beginning to see them get a better understanding of a wider market of riders in other parts of the country. They are not going to be too fast, but they will be fast enough. At this point in time, more and more people who have started to ride the 500 series are being told to stop by their friends, but many don’t get the opportunity. They will be waiting for a ride. They will be riding around, trying to figure out what they want in life and their own style. We’ll go into more detail of this next part because some people that go to our stores tend to be the ones who buy bikes that have got all of that down and they don’t really know much about the riding.
In addition to the 500 Series, Ducati has set up a fleet of 500 motorcycle and 400 motorcycle models in various capacities. These models do not come with any gear combinations unless required. There will be several other parts available for you as well. The 500 will not be the first brand to start with a model as its production time will be relatively short so the 500 is the first thing that becomes part of the list of brands we are looking to develop for the 500 Series. Although, in the past Ducati used a lower order of production on their 250 and 250 Series, its focus is on high performance motorcycles and in part is centered on racing motorcycles. The 500 was originally going to just be a collection of 250cc models, but as they are more advanced models, all of these 500s have a set of smaller motorcycles that are used primarily on the off-road trails in North America and Africa. There are also motorcycles at very high speed and it is very practical and there is a lot of racing around and this should give us a real solid basis of what you need and where you need those motorcycles.
All of these 500s should be at a lot of different