Ducati: In Pursuit of Magic Case Analysis
Ducati: In Pursuit of Magic
By: Hanmiao Li, Bohong Liu, Adam Loewer, Tianyue Shao, Yi Wei
Ducati is a specialized manufacturer of racing and sport motorcycles based in Italy. In this case report, we will analyze Ducati’s competitive position through an opportunities and threats analysis, Porter’s Five Forces, a value and cost drivers analysis, as well as the VRIO framework.
Opportunities/Threats
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.
The industry continues to face the threat of adverse regulation relating to the safety of motorcycles. Also, the lack of growth in Europe may be signaling a change of preferences away from motorcycles to other forms transportation and recreation. This is particularly troubling for Ducati because most of their sales are to riders in European markets. Also, the industry faces the constant threat of negative exchange rate movements, especially related to the dollar, which devastated Ducati and other European manufacturers in recent years.
Porter’s Five Forces
1) Barriers to Entry
Overall, the industry has relatively low barriers to entry. 1) One barrier that exists relates to mechanical engineering expertise, which in the sport bike category may be even greater. However, automobile manufacturers may have some of required expertise already or they could hire the needed expertise relatively easily. Therefore, all existing car manufacturers are potential competitors. 2) A second barrier relates to fairly high capital requirements. Investments include the
By: Hanmiao Li, Bohong Liu, Adam Loewer, Tianyue Shao, Yi Wei
Ducati is a specialized manufacturer of racing and sport motorcycles based in Italy. In this case report, we will analyze Ducati’s competitive position through an opportunities and threats analysis, Porter’s Five Forces, a value and cost drivers analysis, as well as the VRIO framework.
Opportunities/Threats
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.
The industry continues to face the threat of adverse regulation relating to the safety of motorcycles. Also, the lack of growth in Europe may be signaling a change of preferences away from motorcycles to other forms transportation and recreation. This is particularly troubling for Ducati because most of their sales are to riders in European markets. Also, the industry faces the constant threat of negative exchange rate movements, especially related to the dollar, which devastated Ducati and other European manufacturers in recent years.
Porter’s Five Forces
1) Barriers to Entry
Overall, the industry has relatively low barriers to entry. 1) One barrier that exists relates to mechanical engineering expertise, which in the sport bike category may be even greater. However, automobile manufacturers may have some of required expertise already or they could hire the needed expertise relatively easily. Therefore, all existing car manufacturers are potential competitors. 2) A second barrier relates to fairly high capital requirements. Investments include the