Executive Summary
The motorcycle industry has changed significantly within the past few decades. The industry has been targeting different consumers with specific preferences and expectations. From 1970, many companies began to embrace the power of research and development (R&D) in order to produce revolutionary motorcycles. New technological improvements emerged thus supporting the needs of many customers (Gavetti, 2002).
Powerful advertising events and races were staged in order to increase the firm’s level of sales. The leading manufacturers were marketing their products in Europe, Japan, and Europe (Gavetti, 2002). However, some manufactures exited due to increased production costs and competition.
During the period, the major competitors included Harley-Davidson, BMW, Honda, Triumph, Kawasaki, Yamaha, and Suzuki. The changes encountered in the industry forced Ducati to focus on a new turnaround program (Gavetti, 2002). The purpose of the strategy was to produce the best results. The first approach was founded “on the company’s technical superiority” (Gavetti, 2002, p. 6). The company’s products performed positively in the racing segment. The inclusion of powerful engines made Ducati’s motorcycles successful.
Unfortunately, Ducati’s decision to focus on other products affected its performance throughout the 1980s. The firm became troubled and unprofitable. It was “a single step from bankruptcy” (Gavetti, 2002, p. 7). Federico Minoli introduced new strategies aimed at transforming the company.
To begin with, Minoli observed that Ducati’s product was reliable, effective, unique, and beautiful. The organization’s R&D department was also effective. He also observed that the presence of competent engineers could transform the company and make it successful. A crystallized strategy named “The World of Ducati” was framed in order to support the firm’s objectives. The company decided to “consider various issues such as advertising, racing options, events, and Ducati owners’ clubs” (Gavetti, 2002, p. 12).
The company also embraced the power of online marketing in order to attract more customers. More people were ready to purchase Ducati’s products. By 2011, the firm had a market share of 7 percent. Ducati also embraced new approaches in order to increase its market share to 10 percent (Gavetti, 2002).
The “new goal was to produce new motorcycles that could compete in Harley’s niche” (Gavetti, 2002, p. 14). According to the case study, Minoli was not sure if the decision to produce a powerful motorcycle could support the company’s sustainable growth.
Recommendation
The motorcycle industry has changed significantly within the past few years. That being the case, Ducati should monitor most of these changes in order to develop a sustainable business strategy. Federico Minoli’s turnaround strategy has presented new opportunities to this company (Gavetti, 2002).
Minoli supported the company’s traditional niche in order to become competitive and profitable. He managed to produce positive results within a short period. It is agreeable that a proper strategy should be designed to support the organization’s future performance.
It will also be appropriate for the management team to design a powerful motorbike that attack Harley Davidson’s niche (Gavetti, 2002). The case study shows clearly that Ducati has the best engineers and researchers. The company can use its financial strength to produce a powerful motorcycle.
This new product will compete successfully in the industry. The current marketing strategies should also be used in order to produce the best results. Ducati can use modern marketing strategies and social media networks (Gavetti, 2002). These strategies will attract more buyers and make Ducati one of the most sustainable companies in the industry.
Reference
Gavetti, G. (2002). Ducati. Harvard Business School, 1(1), 1-25.