Essay on Ducati

8819 Words36 Pages
9-701-132
REV. MARCH 8, 2002

GIOVANNI GAVETTI

Ducati
By the end of 2000, Federico Minoli had won his battle. Over the past five years, the “turnaround i artist” -- as Forbes magazine dubbed him –- had transformed a company 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. Under Minoli, Ducati had enjoyed explosive 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 from 5.1% in the sport bikes segment in 1997 to
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In 1997, BMW introduced its own interpretation of a cruiser, which enjoyed a stunning commercial success. Touring bikes were larger motorcycles equipped for longer rides and greater comfort. Within this segment, the three largest players were BMW, Harley-Davidson, and Honda. Sport bikes had lighter frames, a more forward seated position, and emphasized speed, acceleration, and minimal comfort. This niche, which Ducati identified as its relevant market (see Exhibit 3), could be further disaggregated into four sub-segments: hyper-sport (extreme performance, closely derived from the racing world), super-sport (high performance, good handling and low weight), naked (good performance and urban riding) and sport touring (speed and handling, married with comfort for longer rides). Japanese companies dominated this niche, while European firms such as Ducati, BMW, and Triumph also vied for market share. Harley-Davidson entered the sport bike market by acquiring Buell Motorcycles in 1998. This segment was Ducati’s reference market.

Customers
A wide variety of individuals, with equally different tastes, bought and rode motorcycles (Exhibit 4). “Knee down,” or racing aficionados, sought extreme performance and functionality (e.g., reliability and technical excellence). ”Easy-riders” lay at the other extreme, and associated the motorcycle with a particular lifestyle.

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