Ducati, the Second Most Profitable Motorcycle Maker Essay

Ducati Q) How did Ducati become a profitable motorcycle maker despite its small scale? Before its takeover by the American private equity firm Texas Pacific Group (TPG), Ducati went from being one of the top manufacturers of the high performance sport motorcycle industry to being on the verge of bankruptcy. TPG identified Ducati as a high end product with enormous potential for growth but realized that serious change was required if Ducati was to ever fulfill this potential. TPG decided to

Questions to answer 1) How did Ducati become the second most profitable motorcycle maker in the world despite its small scale? 2) What is the fundamental economic logic of Minoli’s turnaround? 3) Can Ducati sustain its position in the sport segment? Can Honda and the other Japanese manufactures stop its growth in this segment? 4) What strategic alternatives are available to Minoli in 2001? Which alternatives would you recommend, why? GMAN 512 Midterm 11 February 2010

1. 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? Operational effectiveness is a key to gain profitability. [p 29 What is Strategy?] Constant improvements in the following operational activities resulted in profit maximization of Ducati:  Standardization of products using two crank cases and three cylinder heads provided efficiency gains in manufacturing.  Moved towards a platform

Ducati In: Business and Management Ducati Ducati feedback Q1. I wanted you to begin by recognising that this was a turnaround situation, with Ducati in 1996 close to bankruptcy. A new management team led by Minoli changed strategy with clear objectives of aggressive growth within a niche of the sports segment and competing as a focussed differentiator. The logic of the turnaround can be conceptualised as follows (a) Ducati reduced costs without affecting the WTP for the physical product

2. How did Ducati become the second most profitable motorcycle maker in the world despite its small scale? Platform Approach: Ducati divided the bike into a small number of component and sub-component assemblies. A supplier was responsible for managing and delivering the component. The platform approach minimizes detailed, multi-step assembly processes. Consequently, fewer Ducati man-hours are needed to assemble a motorcycle. The assembly expertise of each component is concentrated at the supplier

Victory Motorcycle “Victory Motorcycles is a motorcycle manufacturer based in Spirit Lake, Iowa, United States, which began production of its vehicles in 1998. Its parent company, Polaris Industries, created the firm following the modern success of Harley-Davidson. Victory’s motorcycles are designed to compete directly with Harley Davidson and similar American-style motorcycle brands, with V-twin engines and touring, sport-touring, and cruiser configurations. The first Victory, the V92C, was

The service backup is second to none with regard to spare parts availability, and customers fall in love with their products to the point that they will spend hundreds of dollars repairing fifteen and twenty year old equipment rather than replace it. The average time between purchases was over seven years, which meant that repeat business was hard to come by. The business in Australia was small, successful and profitable, with steady but unspectacular growth. By 1993, Bang