Problem Identification
The given Ducati HBR case focuses on the remarkable strategic repositioning and turnaround of Ducati i.e. an Italian high-end sports bike manufacturer. The case describes the existing concerns of the company related to the growth prospects. In spite of the outstanding profitability and explosive growth of Ducati, the CEO & the strategic business mind - Federico Minoli was concerned about the future business as he knew that Ducati could not grow forever in its existing niche. Therefore, currently Minoli and Ducati’s tops management is struggling with crafting a strategy that overcomes such constraints. In order to do so, one of the alternatives under their consideration is to outbreak the niche of Harley Davidson by entering into the competition of cruiser market. The problem is to determine whether this expansion of Ducati’s conventional market niche would be an expedient move for organizations’ sustainable growth.
Evidence
Considering the evidential support, the case incorporates the financial data, worldwide market for Ducati and other competitor bikes, market share details, market map, presence of market segments, sales breakdown, customer profile, segmentation etc. It also includes the comparison of products, cost, and standardization. The evidence offered by the case are sufficient for making a decision related to confronting Harley Davidson’s niche.
Analysis
In the given case, it has been analyzed that Ducati, which is an Italian sports motorbike manufacturer has successfully completed its turnaround and strategic repositioned in four years that is reflected by explosive business growth and profitability. However, the CEO Minoli and the top management of the company are apprehensive with the fact that the company cannot get a long way with its existing market niche. They further came up with the fact that since their market share expansion has brought them closer to the profitability of Harley Davidson, they should further think of diversification and should think of entering a new market segment in order to reinforce the long-term growth and profitability of the company.
Solutions
Minoli and his management should bring the alternative as the cruiser market segment is a huge market segment. Apparently, entering the market would require Ducati to invest 17 million Euros with an additional cost of 26 million Euros. Although the previous profitability of the company allow it to invest; however, the company has serious issues like financial interventions by the troubled subsidiary Cagiva along with some manufacturing bottlenecks issues too.
References
Gavetti, G. (2001). Ducati Case Study. Harvard Business Review. Retrieved on May 17, 2016
