Ducati & Texas Pacific Group – a ”Wild Ride” Leveraged Buyout

Brazos’ investment strategy emphasizes buyouts of mid-size companies that show predictable cash flows, have good management teams in place, have well-developed niche markets, and are located in Texas and the Southwest. This strategy suits its position as a first-time fund because this geographic area is underserved by LBO firms. Additionally, the existence of dependable cash flow and management make it easier to acquire debt financing and increase leverage. GTT offered merits for both sellers and Brazos. It gave sellers a way to cash out if they desired, while allowing them to

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.

The motorcycle industry is a consolidated industry. The U.S. and international heavyweight motorcycle markets are highly competitive. The major players, such as Yamaha, Suzuki, and Honda, generally have financial and marketing resources that are substantially greater than the non-major players. Competitions in the heavyweight

How did Ducati become the second most profitable motorcycle maker in the world despite its small scale? What is the fundamental logic of Minoli’s turn around?

Currently H-D is the leading seller of heavy weight motorcycles across the entire world. Because they are at the pinnacle they are the target for the competition. Some of Harley Davidson 's advantages are name recognition, brand loyalty, brand quality and customer loyalty (Hitt, Ireland & Hoskisson, 2013, p. 81). The company benefits by having “the made in America” image attached to its products. The image of a Harley rider and owner is one of a tough, independent, free spirit, ready and willing to take on the world type of man. The sound of a H-D motorcycle in idle or being ridden is unique and very identifiable.

* KTM benefits from two long time players in the industry that attract investors confidence: Knünz and Pierer

BCH Executives have agreed to begin the new touring motorcycle project with larger motors for long distance driving. The proposed target audience suggested for this product would maintain an income up to 100,000 annually. The project completion goal is within five (5) years of the marked beginning date. The company will use the current facilities where the medium-sized manufacturing are created with modification of the equipment and as well as additional staff. With an estimated goal of 100 larger motor motorcycle production at a cost determined by the approved budget, this project will utterly build additional profit for the company.

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.

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.

According to me, the motorcycle industry is very attractive. The main reason to back my claim is the level of competition in the industry. There is a very high level of completion between all the companies present in this particular segment. The main factors that drive this rivalry are different positions of different players within the industry, differences in technical know-how, different marketing campaigns, differences in core nature of the products and differences in strategies. The players in this particular industry don’t fight over price of their products, they rather compete with each other in terms quality of their products and the nature of their services to different segments of customers. Each player had its own unique strategy and nature of the product for a particular segment of customers, this tends to intensify the competition amongst companies in the industry.

The three statics of Harley-Davidson’s is; revenue, growth rate, and number of units that are sold. The manufacturer of the United States heavyweight motorcycle division has obtained, arrested, and achieved approximately fifty-four percent of the broad United States motorcycle exchange. Harley-Davidson has fifty-two percent share of the broad motorcycle exchange in which IBISWorld INC. has estimated that it will generate six point nine billion dollars in revenue this year, (Forbes, (2014).

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

However in the markets they do serve they desire a relationship that evident in Harley riders. This is most evidenced by the participation in the Harley-Davidson Owners Group (H.O.G.). “The HOG worldwide membership had grown to 900,000 at the end of 2004 . . . in contrast Honda’s Gold Wing Road rides had 75,000 members” (Nolan & Kotha, 2007). The final part of the statement is just a reassurance to investors that profitability is a key concern.

Harley-Davidson has managed to dominate the U.S. market by investing in research and development, experimenting with its designs and

Since Harley Davison Motor Company started in 1903, they have been successfully “taking the work out of bicycling” better than any other motorcycle manufacturing company. They have experienced great success recently with growing numbers in their percentage of motorcycles shipped, up 14 percent from 1997, and their target market size, up 13.8 percent from 1997. Their brand has also grown so strong over the years that customers are willing to wait up to two years for a motorcycle. The problems that Harley Davison is faced with are how to improve their existing purchasing process, how to integrate their existing procurement methods together, and how to develop longer term