Analyze Ducati’s Essay

As the case mentioned, Ducati was experiencing a financial crisis before 1996. Just right before Ducati’s bankruptcy, Texas Pacific Group took over the company and appointed Minoli as the leader for the new management team. Despite having high tech motorcycles, Ducati suffered from lack of high quality reputation due to poor management and inefficient production. Under Minoli’s management, he successfully established Ducati’s core logic as a sports bike leading brand, and set company’s core goals as to increase growth as well as maintain profit margin. Minoli began this goal-oriented strategic decision and pointed out a blueprint in order to reshaped Ducati from head to toe. He not only made Ducati to be perceived as a brand to compete in its niche sports segment, but also reeducated the public’s thoughts toward Ducati as a lifestyle and entertainment rather than just motorcycles alone. One key to branding is to maintain customer retention. As mentioned in the case, since 55 percent of Ducati’s customers tend to purchase more than one motorcycles, it is essential for Minoli to establish a high customer loyalty in order to have repurchase intentions. With that aim in mind, Minoli launched levels of investments in customer retention activities to accompany his branding strategy. Implementations include things such as advertising to broaden customer base, creating customer service for quality satisfaction, bike customization for brand niche segmentation, and building Ducati heritage to reconstruct customer loyalty. In addition to branding, Minoli also reorganized production system by outsourcing majority of Ducati’s basic components to maintain the flexibility and efficiency for the production process (76 to 87 bikes produced per worker in 3 year) . Standardizing cylinders and crank cases for different models, acquiring accessories and apparel company also allowed Ducati to yield a higher profit margin (12%) and turnover rate. Furthermore, Minoli also started a new distribution strategy by reorganizing dealerships. To improve the quality and control of the dealerships of Ducati, Minoli began to limit dealerships by carrying only Ducati motorcycles and accessories. Although this act subsequently reduced a number of dealerships in the region, total annual registration still had increased by more than 300% from 2310 to 9750 within 4 years in Italy. In sum, Minoli’s turnaround program has allowed it to create core competencies in brand, product, and R&D technologies by implementing strategies mentioned above. Lowering the cost as well as raising the revenue made Minoli’s goal of long term profit sustaining possible. work cited:Gavetti, Giovanni: Ducati page 11.