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ANALYSE DUCATI STRATEGY TO BECOME ONE OF THE MOST PROFITABLE MOTOR CYCLE MAKERS
DUCATI SUCCESS CAN BE ATTRIBUTED TO ITS FOCUSED DIFFERENTIATION APPROACH. DETAILED DIFFERENTIATING
FACTORS ARE LISTED BELOW:
COST Factors
Location advantage
1. High concentration of
automobile companies
and suppliers in the
area reduced training
costs and raw material
cost.
Tangible Factors
Technical Design
1. Desmodromic 2 valve L-Twin
Engine with Unique sound
2. Italian Style
3. Tubular Terstile Frame
4. Futuristic Designs
Redesigned product portfolio with
entry level and high end models
Intangible Factors
High brand building and loyalty (High Retention Rate)
1. Advertisements (Specialized Magazines)
2. World of Ducati (building lifestyle type image)
3. Various Tie Ups with luxury brands.
4. Association with various racing events.
Procurement/Distribution Strategy
1. Radically rationalized its suppliers network to improve
quality and service of ducati for customers and gain
bargaining power.
2. To gain better control over Distribution launched a 3
phase plan which improved dealers interest in the business
and thus gave bargaining power to Ducati.
Other Factors:
1. Re-alignment of Management Team to improve
team coordination Reduced lead time for
production.
2. Standardization of products
For the listed following reasons it seems that Ducati can sustain it.
1.
As most of the differentiation factors are intangible and internal to Ducati thus can be obscured from the
competitors thus would be difficult to imitate. Eg. They could patent the unique sound and engine design thus
making it difficult for competitors to replicate.
2. Deterrence and Preemption:
Eg .Product Varieties : Bikes in each sub segment.
Distribution and Supplier Network: Enrolled major suppliers.
3. Causal Ambiguity :
As Ducati differentiated itself by working on various tangible/intangible factors thus it would be difficult for
the competitors to discern the exact factor which gave Ducati the competitive advantage. Thus difficult to imitate
4. Emotional Connection (Life Style/ Racing)
Note: Reference used for formulation of answer : The nature and Source of Competitive Advantage.
Cons
POTTERs 5 FORCE
ANALYSIS
COMPETITION : Moderate
Even though there are many firms in
competition but the major player in the
market is Harley Davidson, which is
leveraging its lifestyle inclined image for
~50% Market Share. DUCATI is the only
oine also built its brand on similar lines.