External Environmnet Ducati

“The World of Ducati”: Minoli wanted to develop a global brand “The World of Ducati” that could appeal to a broader spectrum of customers. Minoli’s initiative was “moving from the mechanical to entertainment”. Supply of product that is differentiated [Grant p 222]

There has been a large amount of research into what strategy is, since Michael Porter’s perennial work in the 1980s. Studies done on the execution of strategy have been far less numerous. However, there is one major understanding about the execution of strategy. The execution of strategy is a vital part of success in business. A summary of many myths surrounding various strategic executions will be outlined, along with their subsequent analyses.

This first strategy calls for the creation of more sales without changing the original product, which can achieved through the four P’s of marketing. The next strategy, market development, allows the supplier to find new markets for their current products by using demographic markets to see where the greatest revenue will be based on the target group you are selling to (seniors, teens, etc.). Product development is the next strategy which focuses on new products the modification of current products. This strategy is rather important as without evolving products to meet the ever changing needs of current and potential companies can see a loss in sales and would limit their ability to be competitive in the market. The final strategy is diversification. This strategy calls for companies to attain current or new businesses allowing them to “diversify” their offerings and break into new markets.

The external environment affects a firm’s strategic actions. Essentially, if a company decision has created a disaster in the environment, they

Marketing and Sales represents Ducati’s most significant growth opportunities because their brand management strategy advances the Ducati name into the consciousness of their markets. In addition to motorcycles, Ducati extends the brand by selling accessories and apparel. For sure, Ducati owners will buy these products but perhaps more importantly, the aspirational aspect of the brand drives people to buy Ducati-branded items even if they don’t own the bike. This behavior is seen with the Harley-Davidson brand: many people wear H-D clothing and

Strategy formulation has been acknowledged as one of the most crucial factors of ensuring the long-term growth of the business. However, the manner in which strategy is formulated, and most importantly, the nature of the strategy chosen for the company determines its future position in the marketplace (Grant, 2005).

Grant (2010) states, “For a strategy to be successful, it must be consistent with the firm’s external environment, and with its internal environment – its goals and values, resources and capabilities, and structure and systems.” (Grant, 2010, p.13).

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.

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

The Porters model is built upon the assumption that strategy development is significantly influenced by the external environment. The Porters five forces are the threat of new entrants, the intensity of rivalry, the threat of substitutes, bargaining power of buyers and the bargaining power of suppliers (Magretta, 2012). The threat of new entrants in the motorcycle industry is moderate due to the moderate industry growth and high entry barriers. The industry is based on moderated economies of scale, moderate switching costs and the high cost of developing and promoting brands. The high barriers to entry are due to the required high initial capital and high fixed costs to set-up the provider and production facilities. The overall threat of new entrants in this industry is moderate.

Alfred Chandler(1963) defines strategy as ‘ the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals’. And Michael porter(1996) sees it as ‘Competitive strategy is about being different. It means deliberately choosing different set of activities to deliver a unique mix of value’.

‘Strategic Management’ is a very complex term as many eminent researchers and scholars have had different views and conclusions on strategy. According to White (2004), “Strategic Management involves both systematically developing an idea together with its implications and testing the empirical validity & usefulness of that idea against the real world.” Thus strategy is not only about planning for future but also about confirming the validity of the hypothesis considered and implementing it successfully. Strategy formation may take various forms such as implicit, explicit or emergent. Implicit strategy is a strategy formed by intuitions of an individual. As per implicit strategists, strategic management is about reading the environment

For example any planning undertaken by Ryanair for new routes or planes would follow the prescriptive model as the objective would have been defined beforehand and elements such as finance will have had to have been agreed before any purchasing goes ahead. On the other hand emergent strategies may be in place for things like training and development where elements can be discovered along the way for example if an issue arose where staff needed more health and safety training then the training programme could be redirected. Ryanair, as already stated, follows neither strategic approach religiously and possesses a strategy unique to their organisation, which has identified their needs and objectives. However their approach to strategic management isn’t unique in itself as the majority of organisations will tailor strategies to suit their business’ own individuality.

Changing circumstances and ongoing management efforts to improve the strategy cause a company 's strategy to evolve over time—a condition that makes the task of crafting a strategy a work in progress,

First, the aspiring team started off the transformation of Ducati’s strategic plan by creating what was called the ‘World of Ducati’, to support and develop the brand. This started with the decision to build a museum, in order to show that Ducati was more than a motorcycle company; Ducati was a dream and a passion. Through this Ducati was able to