Ducati Case Analysis Case Study

Pages: 9 (2526 words)  ·  Bibliography Sources: ≈ 7  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

Ducati Products

Problems faced by Ducati Company before Minoli

Minoli's Interventions

The Merger and Acquisition and its benefits

Porter's 5-forces analysis of Ducati cruiser market

Business Strategy Diamond

VRINE analysis

Ducati Company has been dealing in manufacturing of motorcycles; the company had been in several problems before. With the employment of a new manager headed by Frederico Minoli, the company transformed on the verge of bankruptcy into one of the most profitable motorcycle manufacturers in the world; a mechanical concern into a global brand; a fast motorcycle into a symbol of Italian design and tradition, extreme performance, and technical excellence. On his introduction as a new manager, Frederico Minoli recognized the fact that everything should be continuously re-discussed (Gavetti, 2004).

Ducati Products

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Ducati took advantage of the fact that the motor cycle market segment could further be segregated into four main sub-segments. These are; hyper-sport that comprises of extreme performance motorcycles that are derived closely from the racing industry. The super-sports which comprises of high performance motor bikes that have extremely good handling coupled with low weight. The naked motorcycles that have the characteristics of good performance and suitable for riding in urban areas and the sport touring that has speed as well as handling combined with comforts so as to sustain longer journeys. The models include the 996,748 and 996S. The main competitors in this arena to Ducati are Suzuki, Honda and Yamaha.


In 1973, Ducati launched a super-sports (SS) motorbike. It was the most popular Ducati model on the road. However, in 1998, the company launched a very new model that is characterized by a design that is rather futuristic coupled with good handling. They are fitted with a 2-valve engine that has a smooth delivery. The competitors in this segment are BMW, Triumph and Japanese competitors.


TOPIC: Case Study on Ducati Case Analysis Assignment

Ducati has produced a naked bike known as Monster which is the most popular of all bikes of recent past. The major competitors of Ducati are Honda, BMW and Triumph.


This category of Ducati offered comfortable riding position as compared to other Ducati models. The models include the ST2, ST4 and ST4S which is fitted with a superior 996 engine. The competitors in this market segment are Triumph, Japanese manufacturers and BMW.

Limited Edition

Ducati also embarked in the production of Limited Edition (LE) bikes such as the MH 900 Evolution that has its design inspired by the MH 900.The other model in this category is the 996R

Problems faced by Ducati Company before Minoli

Prior to the appointment of Minoli as the Chief Executive Officer, the company had changed hands a number of times. This was not good for the company as it lead to lack of overall strategic direction. On the other hand, the company was also faced with the problem of bad reputation due to the fact that it produced products of average quality due to poor management and inefficient products, this happens in the presence of a team of top engineers. Before the revolutionary turnaround, the company depended on the imagination of the engineers as opposed to employing a set of definite goals.

Minoli's Interventions

In 1996, Fredrico Minoli became the Chief Executive Officer of Ducati so as to lead it into a completely new era. The era was of profitability. He was also to help in the establishment of Ducati as an important brand in the contention of the sports market segment. In his solution, he incorporated basic structural changes by redefining company's strategic goals. He then proceeded a to put his efforts on brand building exercise with the aim of increasing both the production and customer base. He introduced cruiser into the European market and leveraged on its Ducati's engine which is has high performance and a unique design.

The Merger and Acquisition and its benefits

Merger and Acquisition at Ducati

Ducati was acquired in 1983 by Caviga group which is an Italian conglomerate that manufactures products. September, 1996 saw Caviga face a liquidity crisis and Ducati Motor Holding (DMH) was formed. After a series of transactions, the Texas

Pacific Group (TPG) based in the U.S. As well as Deutsche Morgan Grenfell Capital Italy, an Italian subsidiary of the Deutsche Bank that deals with the management of assets as well as private banking jointly acquired a total of 51% of the Ducati Motor Holding (DMH). The remaining 49% were acquired by Texas Pacific Group (TPG). TPG also owns a total of 33% of Ducati Motors.

The benefits of the Acquisition

The company's working capital rose and therefore the production levels too rose. A new management team was put in place globally and comprised of 250 management professionals. This team helped in rebuilding its sales, improving public relations, revamping corporate image, improving marketing, streamlining of the assembly process as well as introducing new business models.

SWOT Analysis


The transformed Ducati has made a heavy investment on R&D and is led by a group of excellent and highly qualified engineers. The products from the company are highly differentiated from the ones produced by their competitors. For example, their products possess Desmodronic distribution system, tubular trestle frame, unique sound, L-twin engine and are Italian as pointed out by Gavetti (2004).

Value chain that is efficient

The Ducati value chain has been shown to be highly efficient in that it involves the employment of suppliers who have been selected with the most stringent of procedures. This ends up reducing the number of suppliers by about 20%. It employs a philosophy of having at least two suppliers for every product component. These suppliers are only engaged through short-term contracts. Only key suppliers are engaged in long-term contracts. The outcome of this is that the company gains more flexibility. There is also an increase in the level of competition that takes place among the suppliers. The consequence of this is an improvement in quality. The platform-based approach of production results in an elevation in the level of accountability of the major component suppliers. The major component supplier is mandated to come up with the sub-component suppliers.

Only 13% of the Ducati productions are not outsourced. The remaining percentage is outsourced. The standardized production of components such as crank shafts and cylinder heads leads to an increase in frequency. The platform-based approach helps in the reduction of the transaction costs. The in-house control of quality helps in ensuring that the products produced are of consistently high quality.

Strong brand

Ducati posses a high brand loyalty which in Europe causes about 60% repurchase intention. This is further reinforced by the concept of "World of Ducati." The company also sponsors events. The company has numerous marketing arrangements that associate its brand with premium and highly fashionable products.

Advantages due to location

The concentration of suppliers as well as related industries causes a general increase in the level of competition. Costs are lowered .The innovativeness of suppliers provides Ducati with a superb knowledge pool.

An effective management

The Ducati management is effective as well as flexible since it appreciates all the new ideas and perspectives. These form the foundation of new and yet creative growth avenues.

Strategic alliances

Ducati has strategic alliances with some of the best brand on the globe. These include Maseratti and Ferrari who helps it in improving its efficiency a well as in the promotion of good policies.


A target audience that is very narrow

A review of Ducati's buyers indicates that they fall between 18 and 35 years.

Highly polarized sales

A review if Ducati sales data reveals that its sales are highly polarized. The polarization of sales exists around the Naked families and Hype-Sport.

Low economies of scale

In comparison to its competitors, the company produces relatively low volumes and therefore they don't enjoy the high economies of scale. Any chances of economies of scale are eliminated by the poor sales of Sport-Touring and Super-Sport models.

Dealer networks that is sparse

The sparse dealer network greatly limits the company's exposure to any prospective clients. The company also lacks presence in most of the major emerging markets.

Limited growth

Ducati had a healthy growth from 1997 to 2000.After that it did not show any increase from 2000 to 2003 as pointed out by Grant (2004,p17)


An exponentially growing market segment

The market segment that is made up of heavyweight motorcycle (>650cc) is pointed out by Grant (2004) to be growing extremely fast and therefore it possesses a growth potential.

Weaker competitor brands

It is worth pointing out that the despite the reliability and performance is part of the other motorcycles (from competitor companies),they still shows a reduced brand loyalty. This can be treated as an opportunity worth being exploited by the stronger brands like Ducati.

A reduction in the global trade barriers

Due to the reduced barriers to the emerging countries, the company can treat its customers to reduced costs as well as reach out to new markets like Brazil and India.


Lower prices

The threats that face Ducati are lower prices by… [END OF PREVIEW] . . . READ MORE

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