Memorandum
Subject: Ducati: In Pursuit of Magic (A)
Date: Feb. 19th 2013
Ducati is one of the premium motorcycle producers specializing in sport segment superbike from Italy. The company experienced booming in sales and reputation in 1996-2001. This boost had attracted Texas Pacific Group to pursue controlling interest in the company for higher expected future return. The economic boom somehow masked the mistakes made by Ducati during the period. When sales started to decline during 2002-2005, three major problems started to become more obvious among the management team: * Product discontinuity. * Cost disadvantage compared to Japanese producer. * Decline in sales in U.S. market.
Ducati needed to addresses these
…show more content…
* Marketing cost associated with selected motorcycle publications. * The production line used the lean manufacturing, which decreases the production costs. * Competitive disadvantages: * Cost disadvantage. Japanese motorcycle makers can produce cheaper bike with advanced technology. * Product discontinuity. Evolution of products that consumers do not recognize. * Do not intend to stretch and extend business to cruiser motorcycles, i.e. limited customers. * Relatively low market share than major Japanese companies, which occupied about 78% of total market share. This lead to low brand recognition.
Even though Ducati has its competitive advantages, it does not mean that these advantages are sustainable. In order to determine whether Ducati will remain competitive, Barney’s VRIO framework is going to be applied. Hence, four questions are going to be addressed in this part of the case study, which are the Question of Value, the Question of Rareness, the Question of Imitability, and the Question of Organization. * The Question of Value: * Ducati has a group of highly skilled engineers and an in-house design team which allow the firm’s products to have the attribute of speed, performance, and innovation. Such capability helps fulfill customers’ needs and perceptions. * Ducati is positioned to be fast with good braking ability. The ability of producing sport bike with
Two innovations had a tremendous impact on Roman architecture. One was not a Roman invention, although it was improved upon, which was the arch. The other was without a doubt a
Consumers are not limited to a single market, many of them will be purchasing multiple bikes, but all of them have specific preferences. Successful company will meet customer’s needs and maximize sales by growing the potential market size as well as taking sales from competitors.
I look up from my phone after the clock turns from 11:59 pm to 12:00 am and gaze upon Honey Pot Lake as it mirrors the pink and gold clouds illuminated by the setting sun’s rays as they bend over earth's curvature. I take in the beauty of the sunset and await the soon to come sunrise. As i, for the last time, experience the beauty of the pristine nature that bethel alaska has to offer, turn my head towards my adjacent friend and proclaim in a gloomy yet glad tone, “I never want to leave this place.” My experiences in bethel alaska from my two school immersion trips truly formed who I am today.
our business. As the president and the CEO of Bikes Bikes Bikes, I am proud to present to you the
Ducati has developed and managed their value chain very well. This contributes substantially to their strong position. I’ve already discussed Ducati’s effective management of Inbound Logistics and Operations. Ducati’s Outbound Logistics approach is oriented around brand management in each of its markets. This is accomplished through dedicated, single-franchise dealerships instead of multi-franchise dealerships. This decision means that Ducati seeks a high-value customer experience with lower volumes in lieu of a mass-market approach. This is a strategy that is consistent with being a niche player; it makes sense for the Japanese firms to have multi-franchise dealerships since they are close substitutes of each other.
Question #1 If you were CEO of Harley-Davidson, how would you compare the advantages and disadvantages of using exports, joint ventures, and foreign subsidiaries as ways of expanding international sales?
Firstly, picking up Ducati as its target company is quite opportunistic. From the traditional investment style’s point of view, TPG is interested in those companies that had grown rapidly but still had the corporate structures of very small companies which caused great stress to the management of the business, and the assets of their target companies always being considered to be divided in order to improve the business riping for LBO. Besides, TPG is expecting to add complexity to the doing the deals and realize fiscal efficiency. Ducati is thus to be an ideal target from these
In this paper we will perform a complete analysis of the Harley-Davidson Corporation including their corporate and business strategies, strengths and weaknesses, environmental opportunities, the five industry forces, and financial situation. Harley-Davidson has many attributes, which will be apparent in the following analysis. The paper will attempt to define the different components of the analysis and put them all together in a way that seeks to explain the way that they contribute to the overall success of the company and its stakeholders.
| * Outstanding core competencies in design and racing * Engagement of Yamaha’s employee’s toward the satisfaction of the end consumer
1. What is the nature of the opportunity? Could the Ducati brand be expanded beyond motorcycles? Why or why not?
Historically Harley-Davidson to be a Niche Marketer, which is they had focused in on one particular aspect of the market. Kotler and Keller identified the following characteristics of niche marketing; customers have a distinct set of needs, they are willing to pay more to the firm that best suits their needs, it is not likely to attract competitors, gains economies through specialized products and it has a size, profit and to grow. Almost all of these hold true for the “heavyweight” segment of motor cycles that Harley-Davidson produced.
After an investigation by the US International Trade Commission, in 1983 President Reagan imposed a 45% tariff on imported bikes and bikes over 700 cc engine capacity. The new management deliberately exploited the past appeal of their big machines, building motorcycles that purposely adopted the look and feel of their earlier models. Quality increased, technical improvements were made, and buyers returned. Harley-Davidson once again became the sales leader in the heavyweight (over 750 cc) market.
Starting from a company of less than 75 workers and owning less than 20,000 SCU for production, research, quality assurance and conduct warranty work Off The Chain Bikes has doubled the plant capacity and hearing doubling the workforce within two short years. The company is successful by targeting and capturing lucrative market shares by heavily investing in the desired technical specs and design styles of one of the most influential Racing bikes. Our keen ability to thoroughly research market demands, predicting competitive strategies between the four market majority shareholders by reviewing and interpreting the marketing reports and our aggressive design and development plans have significantly increased our market share and increase shareholder value. Our core competencies and strategic goals will be realized by carefully following our established plans and aggressively price our bikes to increase total market share.
Ducati entered into the accessories, apparel business and custom design components giving customers individuality and high performance, respectively.
Honda has continued to embrace the changes that happen around its operations to ensure sustainability and profitability. The current global motorcycle manufacturing sector is full of competition. It, therefore, becomes crucial for every manufacturer to evaluate their strengths and weaknesses and then identify the opportunities to exploit to gain competitive advantage. Honda is Japanese based automobile company; it has numerous subsidiaries in Asia, Europe, and North America. Due to the advancements in technology, Honda will be required to make use of the latest technological trends to stay competitive. The business level strategy at Honda is in line with its enterprise and corporate strategy. The corporation also conducts Research and