Preview

Ducati Exec Summary

Good Essays
Open Document
Open Document
333 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Ducati Exec Summary
Executive Summary

This study is to provide analysis of Ducati’s options to sustain its growth and continue to grow its margins. We have identified a number of key opportunities that would allow Ducati to meet both these goals.
First through the use of SWOT analysis we identified where the company was vulnerable and where it had an opportunity to grow. The main items threatening Ducati’s sustainability is its economy of scale compared to its competitors, and small age gap of its riders. Ducati’s product line does not seem to resonate with the over 30 crowd. Ducati’s strengths are its efficient production line and level of technical superiority of the R&D department.
By identifying the strengths, the threats, and the weaknesses; we were able to identify three opportunities that provided revenue and margin growth. We then applied 5 Force analyses to see which one presented the best opportunity. One, Ducati could enter into the cruiser market, but the high cost of entry, Harley Davidson’s dominance in the market, and possible retaliatory implications present high barriers of entry. The second option is build a lower cost motorcycle that would compete with Japanese on price. This option would allow Ducati to gain in market share, but in doing so would do more harm to the image as a high quality and performance machine. Third option would be to grow the brand through use of e-commerce and targeting women bikers which currently only represent 8 to 9 percent of Ducati’s current sales. This option posses the smallest amount of capital investment and could be implemented right away.
Based on the analysis we have come to the following conclusion, Ducati should continue to develop its brand through growing its e-commerce business, advertising more with an emphasis on women, and growing its European brand into a more globe lifestyle. With a target of 10% growth over the next 5 years in parts, apparel and accessories, this would take Ducati from 6 –to

You May Also Find These Documents Helpful

  • Good Essays

    For this task I preformed an analysis of the financials of Competition Bikes, Inc. In the following pages I will discuss my findings in detail. I will find weaknesses and strengths as well as indicators of how the company’s financial health is. Also included will be some potential ways to make adjustments to correct the weaknesses. Some of the operational strengths and weaknesses were identified by reviewing the horizontal, vertical, trend, and ratio analysis of the current and past financial situation. For the conclusion the strengths and weaknesses of the internal controls in place will be identified as well as solutions and some possible issues related to the Sarbanes-Oxley…

    • 2299 Words
    • 10 Pages
    Good Essays
  • Good Essays

    New generation riders that exists in Asian markets is more attracted to sleeker, less costly and a more swift motorcycles. Although there is a high potential for Harley Davidson to be profitable in Asian markets they are faced with barriers to trade. Such barriers includes government regulations and trade guidelines which limits foreign manufacturer’s ability to penetrate the market. Additionally one of Harley Davidson’s biggest competitors in the Asian market is Yamaha which is a Japanese motorcycle manufacturer. Due to this Harley Davison is confronted with arduous rivalry. Yamaha targets customers that are at the lower end market and focuses their manufacturing on affordable motorcycles with smaller engines, electronic capabilities and lighter reinforcement in contrast to Harley Davidson’s heavy steel frames.…

    • 866 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Thorr Motors Simulation

    • 1464 Words
    • 6 Pages

    Sales of the Cruiser Thorr are decreasing. The decrease is because the Cruiser Thorr’s target consumers are aging and their tastes have begun to outgrow the lifestyle that Cruiser Thorr symbolizes. Another issue is that younger consumers are more interested in lower priced motorcycles because of their lower personal disposable incomes and they do not identify with Cruiser Thorr’s lifestyle image. This scenario wanted to determine the Cruiser Thor’s position in the market by choosing four relevant parameters that will reflect the highest potential.…

    • 1464 Words
    • 6 Pages
    Better Essays
  • Best Essays

    Harley Davidson’s net profit in 2010 was 146.55 million versus a net loss of 55.12 million in 2009 (Global Data, 2011). There are three key elements in which the company has to improve to continue making profit. First, resolve the Unfunded Employee Post-retirement Benefit plan to keep employees producing a good product and maintain a top level company/employee relationship. Secondly, intense competition in the motorcycle market has to be addressed if Harley Davidson plans to increase sales and profit, finally, competition is strong and the brand name alone will not increase its profitability. Strategic Global Branding is the main key to Harley Davidson’s continued rise, and without it the company will stagnate and be reduced to a minor player in the motorcycle industry.…

    • 1605 Words
    • 7 Pages
    Best Essays
  • Better Essays

    The results revealed that a different segment, the younger individual, influenced more by price more than the aging demographic that has maintained Thorr Motorcycles success during the past years, is fueling the now growing motorcycle market. The younger generation seems to care less for brand and image of the Cruiser Thorr, due in part to the price being outside their preferred price range. It is for these reasons that the Cruiser Thorr is in stage four of its product life cycle, which is declining sales. The marketing plan should consider launching a new product. One that represents the corporate core value of commitment to quality, excellence, and offers a new market niche of affordability, finance option, and enhanced services. This will require a differentiation in the marketing mix. Shifting the market plan with changing differentiation attributes mix now focused on affordability, attractive financing option, and expanding services including social fraternities, it seems the new customer base will be more inclined to view the innovatively designed motorcycle as a commodity that offers superior value and quality. Realigning internal corporate processes and unifying the change in focus on a new product goal will cause other processes in the marketing mix to function toward the goal of promoting and placing the new product in a positive light. Attracting this new demographic is creating the…

    • 1368 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    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 motorcycle market are based on several factors; price, quality, reliability, styling, product features, customer preference, and warranties. Harley’s first segment is motorcycle and related products business which includes designing, manufacturing, and selling heavyweight touring and custom motorcycles products, parts, and accessories. The custom products charge a higher price because of its features, styling, and high resale value.…

    • 7537 Words
    • 31 Pages
    Powerful Essays
  • Good Essays

    Ducati

    • 1787 Words
    • 8 Pages

    Before offering solutions to any of the problems mentioned above, we would like to dig into details about the industrial background, company strategic positions, and competitive advantages and disadvantages about the company. These analyses are especially beneficial to help identify potential opportunities and threats of the motorcycle industry and its sport segment. Five forces analysis are supplemented to our analysis.…

    • 1787 Words
    • 8 Pages
    Good Essays
  • Powerful Essays

    Harley Davidson Strategy

    • 2222 Words
    • 9 Pages

    Harley-Davidson is a company that despite enjoying nearly 15 years of being a leader in the market place and capitalizing on strong sales growth, find themselves reevaluating their overall strategy. The analysis below goes through the each level of the market-place to determine where, what and how change can take place. At the industry level, it is clear that the mature product life cycle necessitates stronger price competition, further expansion into foreign markets and more diversification of their product-lines. Next at the firm-level, Harley-Davidson needs to continue to capitalize on their strengths like brand equity and supplier relationships, focus on their value adding functional-level practices like quality management and finally, begin to see weaknesses such as high-price sensitivity and narrowly defined target markets as an opportunity to creatively tap into unexploited demographics markets such as women and consider challenging their premium price strategy, if even for brief time. To achieve the corporate-level objective of increasing international sales it is vital that continue to explore markets that can economically support premium priced, luxury products, are politically stable and friendly to foreign investment from the United States. Since this is a tall order for many viable countries, Harley Davidson must be willing to challenge their deeply entrenched status-quos. This will mean lifting off-shore shipment limits and letting go of the reluctance to move motorcycle assembly abroad.…

    • 2222 Words
    • 9 Pages
    Powerful Essays
  • Better Essays

    However, Harley-Davidson’s journey was not without its bumps in the road. As a result of the rapid rise in production growth – 0 in 1903, 28,000 in 1920, and 150,818 in 1998 – Harley-Davidson experienced quality control issues and faced stiff competition from Japanese manufacturers Honda, Yamaha, Suzuki and Kawasaki. In the 1980s, things became so bad that Harley-Davidson found itself on the verge of bankruptcy. Determined to regain its prowess and move away from the verge of bankruptcy, the company “renewed focus on quality” and completed a successful IPO in 1986 leading to a worldwide resurgence (Austin, 2003, p.2).…

    • 3591 Words
    • 12 Pages
    Better Essays
  • Good Essays

    How this will be accomplished is by looking at the companies ' strengths, weaknesses, opportunities, and threats. First we will look at the company 's strengths. Harley Davidson has a name that people recognize with quality and dependability. This will sell many products just on name alone. Harley Davidson can take this name dominance and build a nice looking crotch rocket and take over the cruiser and sport markets.…

    • 467 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Ducati Solution

    • 2852 Words
    • 12 Pages

    Issues/Challenges Today, Ducati is one of the most successful motorcycle companies in the world with a dramatic profit growth since 1996. Before its huge success, Ducati was one step away from facing bankruptcy. Ducati managed to overcome such an obstacle through strong innovation and culture. Today, Ducati is faced with another challenge that may bring fortune to the company if successfully managed. Ducati set a new goal, which is to sustain the explosive double-digit profit growth in the next decade and eventually reach Harley Davison’s profit level. Ducati is considering attacking Harley Davidson by entering the cruiser market, which is Harley Davidson’s niche product and also a very profitable market segment in the industry. To do this, Ducati must invest 17 million Euro and cost of 26 million Euro. Based on this huge capital requirement, should Ducati enter the new market segment or should Ducati just concentrate on its current segment? If Ducati chooses to enter the cruiser market, what are other requirements besides the capital? Does Ducati have what it takes to succeed in the new market segment? The purpose of this memo is to help the executives of Ducati to make the optimum decision for Ducati’s future success. This memo contains the industry analysis, as well as an internal strategic analysis, company performance, and solutions and recommendations. This industry is divided into 4 segments. Ducati’s dominating segment is the sport sector. Ducati managed to utilize its differentiation strategy by taking into account of the industry’s driving forces. The cruiser segment is one sector that Ducati is very interested in entering. Unfortunately, Bert’s consulting concluded that this is not the best option through the feasibility analysis. The analysis contains the advantages and disadvantages of both options and the result was that the disadvantages outweighed the advantages. Also, entering the cruiser market is not really necessary for Ducati based on its…

    • 2852 Words
    • 12 Pages
    Powerful Essays
  • Good Essays

    Ducati

    • 484 Words
    • 2 Pages

    The ability for Ducati to sustain its position in the sport segment of motorcycles is going to depend on management’s ability to stay focused on keeping their image and story alive and in the minds of the motorcycle community. If management continues its current trend I believe that they can sustain their position, although there are challenges posed by the Japanese firms and changes in Ducati itself can also play a role in their ability to maintain their growth and position as the high end advanced sport bikes.…

    • 484 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Ducati Case

    • 8704 Words
    • 35 Pages

    On the first business day of January 2006, Federico Minoli pulled up and parked his Ducati Multistrada motorcycle in front of the Ducati headquarters in Bologna, Italy. As he looked up at the complex, which housed offices, the assembly factory and the Ducati museum, he reflected back on the company’s history. 2006 would mark several anniversaries: 80 years since Ducati was established to produce electronic radio equipment; 60 years since Ducati had been producing motorcycles; and ten years since Minoli had become the company’s CEO. Minoli joined the then near bankrupt Ducati in 1996, and led its turnaround by creating the “World of Ducati,” a world that involved superior engineering, Italian heritage, slick design and an undeniable attraction for racing enthusiasts to “join the tribe” and become “Ducatisti.” Revenues moved from €95 million to €380 million from 1996 to 2000. EBITDA improved from a loss to €60 million in the same period. However, in the five subsequent years, business results stalled: revenues fell 2.3 percent on a compound annual growth rate from 2000 to 2005, and EBITDA fell to -€273,000 at the close of 2005.…

    • 8704 Words
    • 35 Pages
    Powerful Essays
  • Good Essays

    One of the biggest opportunities in the motorcycle industry is the growth trend of 3.3% in unit sales over the past five years, mostly in the United States and Asia/Pacific markets. Also, the rapid growth of women ridership offers the potential of an even larger customer base in the future. In the sport segment in particular, growth in the next few years is expected between 2% and 3%. The history and brand recognition of Ducati will help them to attract some of these new customers related to industry growth.…

    • 1538 Words
    • 7 Pages
    Good Essays
  • Good Essays

    The case describes Honda’s move into the US motorcycle market in the 1960's. Honda's strategy was directed towards high volumes per model, providing high productivity, and low costs. Honda succeeded in the US by introducing a new product (small motorcycles, 50cc) that expanded the motorcycle market in the US through price generic competitive strategy. Honda was prepared with capacity, capital and technical capability to enter the US market.…

    • 609 Words
    • 3 Pages
    Good Essays