Chapter 2 - Strategic Overview of Ducati
Following its 1996 liquidity crisis, Ducati adopted new strategic plan under new management of Minoli aiming at strengthening the company brand, enhancing its portfolio and increasing its sales and profitability.
2.1. Deliberate and Emergent Strategy
The deliberate strategy is determined and the result matches the intended course of action. It does not consider the external or other facts. Deliberate strategies guide the companies with a sense of focused direction (Mintzberg, Lampel, Quinn, Ghoshal, 2003)
Emergent strategy of a company is not a part of original planning process; consist with a set of actions, or behaviours which are added in to the strategic process in time to time. Emergent strategy
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The functional divisions were largely absent and it was really difficult for the top management team to make their decisions. Managers, who identified the passion of Ducati, later came out with brilliant decisions.
The deliberate strategy of Ducati was to maximise the profit and increase the market share which was a difficult task for Minolis’ team. The Budget was limited and there were some renovations left in the factory as well.
As a solution for these external influences, Minoli analysed the industry factors and came out with an alternative strategy of developing a global brand to the worldwide customer network to compete in the market in order to achieve the deliberate strategy of profit maximisation. That was the birth of Ducati Museum which was a symbol to the Ducati Staff to develop their powerful brand.
Suddenly the branding was the strategy of the Ducati instead of profitability and competing with Japanese motorcycles, which Minoli wanted to symbolize as a dream, passion a piece of history, and a motorcycle is at its heart (Gavetti, 2004). This lead to the formation of ‘The World of Ducati’ the strategy of all Ducati’s operations, link each other. The centre of this strategy is the motorcycle which serves to all customer segments in the
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 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]
As a marketing manager for Cruiser Thorr who sells high end motorcycles. This organization is growing at a rapid pace. Indeed there is more structure needed to the marketing piece to sustain a successful business. Being that the industry of motorcycles is increasing annually. This organization must also work to satisfy the needs of their target customers. The organization must also work to differentiate themselves from other similar organizations as well. Key components in my opinion are the product uniqueness, safety, quality
Strategy is a set of complicated tactics formulated by the executives of a company directed towards the achievement of company’s goal (Salmela, 2002). It is about all the path ways that a company would follow to reach its ultimate goal. It is a company’s strategy which helps to identify what it does better than the other companies in the industries, which may be different from what it does best. For successful strategy formulation and implementation, a company should know the needs of customers and should have knowledge of its competitors. Through a good strategy a company would identify that opportunity which makes it different from the others (Thompson, 2005).
Throughout this paper, the “Competition Bikes Inc. Storyline” case study will be used to prepare a summary report based on the evaluation of the company’s operations.
Planned Strategy: The main feature of this strategy is that formal plans and precise and very
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.
The main key characteristic of this organization is dirt bike, high significant for “racing”. Their significance to the market is metal test,
Intended strategy is the strategy that an organization hopes to execute. Intended strategies are usually described in detail within an organization’s strategic plan (Flat World Education, 2015).
Consider as an example the autonomous strategy of FedEx to launch the overnight courier business. Not only was this action prescient, but the company has maintained this action. It only reacts to external stimulus with respect to lower-level strategy and tactical decisions. The overarching strategy of most firms is chosen with little consideration for external characteristics those merely shape the course of the strategy's implementation. Thus, to an extent all firms engage in autonomous strategy formulation, and those who are able to implement their strategy successfully are the firms that thrive.
Emergent approach believes in continuous and natural growth of change. It motivates the organisation to flourish in an unpredictable environment. It sees change process as something that unpacks and arise from various factors and situations occurring in an organisation (Burnes, 2009). It stems from the belief that change cannot be planned because there are lot of unforeseen events and unintended outcomes that can occur during a certain amount of time. Bernard burns (2009) defined it as “Emergent change is based on the assumption that change is a continuous, open-ended and unpredictable process of aligning and realigning an organisation to its changing environment”
1. What is the nature of the opportunity? Could the Ducati brand be expanded beyond motorcycles? Why or why not?
An intended strategy approach suggests it is fixated on a specific outcome which may reduce the rigidity of an organization but it does ensure focus is kept. It is argued that an organization is more likely to succeed through these stricter
The Motorcycles and Related Products segment was responsible for virtually all of the change in consolidated revenue as the result of increases in both motorcycle unit shipments and Parts and Accessories sales. Year end data indicate that the domestic motorcycle market continued to grow throughout 1993 and demand for the company's motorcycles continues to exceed supply. International demand remains strong with export revenues totaling $262.8 million during 1993, an increase of approximately $23.4 million over 1992. The Board of Directors approved a comprehensive manufacturing strategy designed to achieve the goal of a 100,000 units per year production rate in 1996. Basically, it is an enhancement of the Motorcycle division's ability to
Milwaukee is where it all started for Harley Davidson. In 1903, William Harley Walter and Arthur Davidson created the first of millions Harley Davidson. It was one of the two major motorcycles that were able to survive the great depression. Since 1977, the only motorcycles sold to the public under the Harley-Davidson brand have been heavyweight motorcycles, with engine displacements greater than 700 cc, designed for cruising on highways. It is one of the most well known brands in the world of motorcycles and otherwise as well. Harley-Davidson maintains an enormous brand community, which keeps active through clubs, events, and a museum. The worth of Harley Davidson brand and its logo was somewhere around $40 million which was 0.8% of the