Day 2: Ducati (9-701-132)

Questions:
1. Analyze Ducati’s strategy under Minoli. Why was it a success?
F. Minoli was a turnaround manager for Ducati, who succeeded to transform the
company into one of the most profitable motorbike producers in the world. When
Minolti took over the Ducati, it was lacking clear functional responsibilities. Moreover,
the strategic direction was vague. His strategic vision was to emphasize on the core
values (historical brand with passion for entertainment) and invest more in the
developing iconic products for unique customer experience (including building a
Museum). Of course, he did not forget to enhance the operative part of the company
to improve quality and optimize costs. Main points of focus were:
- Appointed new management team with clear functional divisions/accountability
- Outsourcing – decreased number of suppliers (from 200 to 130), short contracts with
at least two sources of supply which improved quality
- New distribution strategy – aimed at taking control on key markets and improving the
entire process (targeting unique customer experience)
- R&D – by concentration the design internally, Ducati improved the time for releasing
new products. The budget for innovations increased significantly (EUR3,2m in 1997
to EUR 12,9 in 2000) as well as relying on market research for better prediction of
customer taste and needs
The entire program was an enormous success which is visible from the doubled
market share and revenues in only 4 years. The reason for this is that Minoli focused
on the company competitive advantages and at the same time efficiently managing
the operative day-to-day business.
2. Is Ducati’s success sustainable? Why or why not?
Ducati success could be sustainable (from the point of view in Y2000) if maintained
properly over the years. The main factor for this is that the company strategic
positioning is towards building strong customer relationship, which will result in brand
loyalty over the years. On the other hand, by managing both supply chain and
distribution network, it will guarantee better cost overview/control and live connection
to the customers. Additional factor to the success is the use of technology and power
of Internet which at that point of time turns to be a new competitive advantage. That
is a strong indication that Ducati besides being a historic brand is also highly
innovative.
3. What should Ducati do going forward?
Keeping this strategy successful/sustainable over the years would require that Ducati
includes many emerging strategic components to keep up with the trends and
customer/industry expectations. Strong marketing and brand positioning in
combination with high quality customer experience would assure future success and
leadership in its market segment. Of course, operative growth should be also managed
properly investing in new technology.