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 based approach to production gaining more efficiency with economies of scale.
Outsourced almost 87% of production activities involving spare parts while maintaining core competencies like R&D, design, quality control and key trademark
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• Established an internal design division reducing “time to market” for new products; cross-functional integration required for successful development of new products [Grant p 135].
• Current sport bikes were inspired and derived from their traditional core competencies such as engines with futuristic design and good handling.
“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]
• Ducati entered into Sport-Touring segment, which enabled a complete presence in all categories of Sports segment. Strategic innovation: creating new customer segment [Grant p 213]
• Access-based positioning: Ducati widened the offering by introducing entry-level models coupled with new high-end models expanding their customer base. [p 34 What is Strategy?]
• Access-based positioning: The popular designs were changed over time to appeal to existing customers who enjoyed the bikes of the olden days; customer loyalty. [p 34 What is Strategy?]
• Ducati entered into the accessories, apparel business and custom design components giving customers individuality and high performance, respectively.
• Developed and manufactured riding equipment reflecting the exclusivity and racing character of the company.
• Ducati advertised products in specialized magazines only to
Allstate has taken a qualitative approach to developing marketing strategies aimed at the non-traditional market. Qualitative measures are targeted at finding out what customers think or feel about certain products or brand names. In past years to gain market share in the motorcycle industry, Allstate developed “Allstate Garage”. (Crepeau, 2008) This fun interactive website employed the qualitative approach of visualization to allow users to customize their own motorcycle by choosing different models, styles & accessories. Within the customization process, Allstate would indirectly emphasize perks about their insurance policy options. This visualization measure also provided apps for planning scenic rides and safety tips for motorcyclists.
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.
Though The initial program had a fairly positive response from the community and the city claims the program has already broken even (as of January 2014, merely months after the May 2013 introduction of the program). The next step of this program is to expand Citi Bike and the entire bike share system to other New York City boroughs and
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
The fight amongst the major players in this industry is not over price, but over capturing the market share. Since, there is no one definitive leader in the motorcycle industry on the global level, the companies tend to steal each other’s business, this makes the industry rivalry cut throat. One of the crucial factors that make this industry extremely attractive is the constant drive for innovation. Since different industry participants have different approach towards the same segment of the industry, there is a very high
The positioning strategy should be driven by the market, rather than by the ambitions of the product champions. The source of the problem is failure to understand how consumers' value product attributes. In all, over-appreciating a breakthrough or new technology that
Selection of outside suppliers at the initial stage was crucial. Three advantages would benefit from authorized supplier involvement in design and production process. Firstly, they could foresee major problems in the design cycle by pulling their expertise and methodologies. Secondly, this model embedded quality into BMW’s production system up and down the supply chain. Thirdly, supplier was able to realize the critical connection between quality and profit through high customer satisfaction.
Harley-Davidson has managed to dominate the U.S. market by investing in research and development, experimenting with its designs and
| * Only motorcycle company that dominated the World Superbike Championship in years preceding 2003 * Broad range of bikes (dual sport, sport touring, super sport) with leading edge technology * Its development in the U.S. in early 2000’s has supported Ducati steady growth
As I already pointed out Ducati is in a great position to imitate, for street bikes, what cruisers are for Harley-Davidson. Harley-Davidson has succeeded in creating a life-style brand with as much as 15% of its sales, with a growth potential, coming from just clothing and mechanical accessories. Ducati could look at the products Harley-Davidson is selling and how their selling them. They could also compare with a car company, like Ferrari, that has a lot of clothing and accessories that they sell. Ducati has a great potential to extend beyond motorcycles with motorcycle clothing and accessories and mechanical accessories. There are probably a lot of motorcycle stores that would want to sell their products and they could also sell them through their own shops and from online shops. It is just the imagination, costs and the combination of a balanced brand expansion that sets the limits.
Historically Harley-Davidson to be a Niche Marketer, which is they had focused in on one particular aspect of the market. Kotler and Keller identified the following characteristics of niche marketing; customers have a distinct set of needs, they are willing to pay more to the firm that best suits their needs, it is not likely to attract competitors, gains economies through specialized products and it has a size, profit and to grow. Almost all of these hold true for the “heavyweight” segment of motor cycles that Harley-Davidson produced.
The success of Harley Davidson (HD) is due to the American motorcycle icon’s effective Strategic Management. HD’s vision, mission, goals and objectives strive to exceed the requirements of its main stakeholders. Although these needs are not always met, the company has unique relationships with is stakeholders. The company stays on course with its strategic plan, despite the economy and the decline of American manufacturing and what might be considered its dwindling U.S. consumer base.
In order to attract it is vital to provide innovative, high quality solutions for the cyclists. The
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
This marketing plan examines the launch of a human-electric hybrid bicycle called e-bike by the world’s largest motorcycle manufacturing company HONDA, in China.