Ducati

894 words 4 pages
1. How did Ducati become the second most profitable motorcycle maker in the world despite its small scale? What is the fundamental logic of Minoli’s turn around?
Operational effectiveness is a key to gain profitability. [p 29 What is Strategy?]
Constant improvements in the following operational activities resulted in profit maximization of Ducati:
 Standardization of products using two crank cases and three cylinder heads provided efficiency gains in manufacturing.
 Moved towards a platform based approach to production gaining more efficiency with economies of scale.
 Outsourced almost 87% of production activities involving spare parts while maintaining core competencies like R&D, design, quality control and key trademark
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• Ducati.com promoted the brand and gained popularity while creating a community that accommodated direct customer feedback which is instrumental in product development.
 Strategic Fit: It drives competitive advantage & sustainability [p37 What is Strategy?]
• Simple consistency was achieved by functional divisions
• Reinforcing: custom designed accessories and apparel business with Ducati branded riding gear reflecting exclusivity.
• Optimization of effort:
1. Established an internal design division, product development, R&D and marketing which operated in close contact.
2. Collaborated with specialized firms for R&D, purchasing and suppliers’ quality control, etc.
3. Initiated new distribution strategy by establishing subsidiaries in strategic markets, re-organizing the network of dealers and creating a chain of “Ducati-Stores”
 Careful selection of suppliers having a superior value chain for a particular product:
• Reduced the number of suppliers from 200 to 130, having short term contracts with most of them – this enabled switching between suppliers when there was a need
• This relationship with suppliers led to increased quality and reliability of the product 2. Can Ducati sustain its position in the sport segment? Do Honda and the other Japanese motorcycle makers pose a threat to Ducati in this segment?
 Yes, Minoli created unique valuable position involving different set of activities and creating

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