Ducati nearly faced on bankruptcy 1996 though it has good reputation on the famous mechanical system and its unique extreme performance. In the fierce competition with the domination by Japanese companies with high technology, it is difficult to survive or even recover from bankruptcy. Fortunately, the explosive growth and profitability occurred from 1997 led by the CEO, Federico Minoli. This document is the case study of Ducati recovering to a position owing a certain amount of market share.
Analyzing the external environment
The General Environment Analysis
The case of Ducati involves the whole world analysis, which does not mention the specific country. Each company produced the motorcycles with its certain target consumers with diversified age, income, education and gender.
• Demographic, Economic, Socio-cultural & Political-legal No specific information
More women as the new customers are attracted by motorcycle manufacturers, whose preferences are the low seat height and weight of its motorcycles.
The motorcycle technological innovation should be aided with the use of CAD and CNC technologies. Besides, there are many suppliers offering the components for the production of motorcycles. However, Japanese manufactures are also the leader of the motorcycle firms throughout the world with its high techniques.
General Environment Conclusions
To sum up, the new market from the demand of female offers the market opportunities. Also, the new technologies invented provide the companies for the abilities to innovate the new products. Whereas, the dominance by Japan companies with the high technology becomes a high threat in the whole industry.
In motorcycles industry, it is important to keep the features with the performance and functionality. The sport segment in the industry needs a bundle of competitive strategies for all companies in the intense competition. With the analysis of the Porter five forces model, difficulties of operating in this industry will be noted.
• Barriers to entry: HIGH
Firstly, this kind of industry needs considerable capital requirements thanks to its complex production with many components. Moreover, the consumers require high quality of the motorcycle products and they will not trust on the new machine from the new company.
• Threat of Substitute Products: HIGH
The motorcycle industry is dominated by some Japanese companies. Meanwhile, European firms vie for it as well. Customers can choose any product that they want.
• Bargaining Power of Buyers: LOW
The motorcycles attract the consumers with its extreme performance and high techniques. The price of products is not affected by buyers. Buyers have no strong position.
• Bargaining Power of Suppliers: LOW
No suppliers in this industry are critical to buyers’ marketplace success. There are many suppliers for all motorcycle companies to choose. The suppliers have not strong power.
• Intensity of Rivalry among Competitor: MODERATE to HIGH Although the motorcycles of each company differ from each other with their unique features, the competitive rivalry is intense because these companies will also challenge their competitor’s actions. They can be informed the technology and enter into the competitors’ segment.
|Overall Conclusion - Five Forces Analysis | |Forces |Strength |Profit Potential |Attractiveness | |Entry Barriers |high |high |yes | |Threat of Substitutes |high |low |no | |Buyer’s Power |low |high |yes...