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DUCATI HBR Case Analysis

1. Motorcycle industry: Products Cruisers Sport bikes Off Road Segment Touring Segment
comprise of off Motorcycles for more focus on focus on road and dual longer rides
and styling over speed, acceleration purpose bike greater comfort and n over comfort
Japanese were Major players: speed. Hyper the largest BMW, Harley Major Players:
sport, Super- manufacturers Davidson & Harley sport, Naked, Spo Honda Davidson,
BMW & rt touring Japanese companies
2. Motorcycle industry: Customers Knee down Racing aficionados, sought extreme
performance and functionality Easy riders Associated the motorcycle with a particular
lifecycle Weekend riders & Highway lovers Interested in more balanced and versatile
bike Undecided bikers Preferred a more balanced and versatile bike New customer
base for Hardley and Ducati Women 8% sale of Ducatis Monsters motorcycle
3. Motorcycle industry: Technology And R&D 2-5% of revenue to be invested in R&D
Integration between technical and marketing team to understand customers Optimizing
engine performance Reducing weight Lower fuel consumption and toxic emission Racing
competitions: develop technical solutions and test materials
4. Motorcycle industry: Manufacturing Heavy investment on automation of production
line Outsourcing of input Greater flexibility Adopted Japanese production techniques
Optimize production level and improve quality
5. Motorcycle industry: Distribution Major Markets US Europe Japan Agents
Wholesale: build and manage the network of retail dealers in a geographic area
Independent, Partly owned & Totally owned Retailers Multi-franchise & Singlefranchise
6. Harley Davidson Triumph Competitors Honda BMW Harley Honda BMW Triumph
Davidson >650 cc 5.4 mn bikes Network of 30,000 bikes Strong Started the 160
retailers Virtually American superbike Pioneer in unbreakable focus boom technical
bikes lifestyle 23 models of innovations Applied company >500cc 60% Japanese
revenues production from principles automobiles
7. Threat of Substitutes Low threat from Cars, as consumer likely to have one in addition.
Low threat from other types of motorcycles, as for different markets. Competition
Bargaining Power Bargaining Power Oligopoly, with Harley Davidson as of Buyers of

Suppliers main threat (48.1% of US market share), Power is high due to branding and
loyal Power may be low within the particularly in terms of brand. Customer base, so
Harley buyers market, due to Harleys other competitors are unlikely to switch, as costs
are too high. Dominance. Triumph, Yamaha, Honda New entrants unable to touch
Harleys High power with regard to new (on price/technology) licensees, as they are
locked in dealer entrants, due to high switching & BMW networks costs Threat from
New Entrants Dominance and strength of Harley brand suggests high entry barriers, so
low threat from new entrants. No dominating brand in Europe means here threat from
new entrants higher in Europe Porters Five Forces (1979), (1980), and (1985) Porters
Five Force Analysis in analyzing the cruiser market Figure 1.
8. Ducati Contributed to 43% of total revenues from Hyper-Sport motorcycles Super-Sport
Had been most popular Ducati on road Recently introduced segment of Sport-Touring
motorcycles Naked Monster the most popular Ducati now MH 900 Evolution
Limited editions 996R
9. SWOT Analysis Opportunities Other segments in the market Strengths Weakness R&D
Technical superiority SWOT Marketing Reliance on suppliers L-Twin engine Reached
peak of Brand loyalty turnaround Threats Strong competitors like Harley Davidson
10. Ducati : Presence and involvement Ducati Events Owners Museum Advertising Racing
Club
11. Ducati: Distribution Strategy Sales and Re-organization Chain of marketing of network
of Ducati Stores subsidiaries dealers
12. DUCATI: The Turnaround program Fredrico Minolis 2 goals Equaling Harley Double
digit growth Davidsons profit level Ducati had 3 things to be highlighted Good Top
notch A strong product engineers Brand Objective :- To increase market share from 4% to
10% Managements Perspective :- Right strategy was to develop a global brand that
could not only appeal to extreme riders but also to a broader spectrum of customers
13. Should Ducati Expand or Not ?EXPAND Dont Expand Expansion of Risk reduction
Segments Better focus on Pros Increase in market existing share Pros customers
Sustain current brand name Heavy Capital Investment Losing the chance of possible
Cons Time consuming Unpredictable economic Cons expansion conditions
14. Dont Expand Reasons Ducati may lose focus and hence brand loyalty Ducati should
minimize risk by not entering the cruiser segment R&D efforts may not payoff for new
interpretation of Cruiser bike It should focus on brand loyalty for existing segments.

Enhance its own style of Harley Davidsons own style of strategy and its brand loyalty
will make it hard to strategy in existing segment just penetrate cruiser market like Harley
does in cruiser. Unexpected downturn and unreasonable amount of time may lead to
failure.