Ducati Case study
DUCATI
EMBA 2014 – 2016
Group Booetes
Sweta Gupta
Sven Henkes
Paul Jäkel
Thomas Lautenbach
Ignacio Santiago
Georgia Tirologou
Page # 1
EMBA 2014 – 2016 BUS Group Booetes
Ducati Case
Introduction (How did Ducati become the second most profitable motorcycle maker in the world despite its small scale?)
In the summer of 1996 Frederico Minoli was appointed as the CEO of Ducati in order to lead the company into a new era of profitability and to establish Ducati as a brand to contend with in the sports motorcycle segment. He believed that by incorporating certain basic structural changes and by redefining company’s strategic goals, it could be turned into a profitable branddriven company. Ducati’s turnaround focused on brand building and to follow a clear differentiation strategy allowing the company to charge premium prices. Moreover Ducati became very cost efficient through the highest outsourcing ratio in the industry, being the most efficient manufacturer through standardization and rationalization as well as quality control of the supplier network. As a result, the company was able to invest into R&D as well as brand building and simultaneously become the second most profitable motorcycle maker in the world despite its small scale. This strategy design was embedded in clearly defined objectives and supported by organizational arrangements. Moreover, Federico appointed a talented and passionate management team, stimulated creative decision making and set following clear objectives: Double-digit growth and equalling Harley-Davidson´s profit level
Increase market share from 4% to 10% (sport sub-segment>500cc; Ducati market).
The above approach showed following impressive results:
CAGR of EBIT grew from 1997 – 2001 by 22.61%
Share of Market in the Ducati relevant market (Sport Niche) grew from 5.1% to 6.7%
(1997 – 2001, global market) - whereas most competitors are losing market shares; only
Yamaha won shares as well and Harley shares transferred to Buell
EMBA 2014 – 2016
Group Booetes
Sweta Gupta
Sven Henkes
Paul Jäkel
Thomas Lautenbach
Ignacio Santiago
Georgia Tirologou
Page # 1
EMBA 2014 – 2016 BUS Group Booetes
Ducati Case
Introduction (How did Ducati become the second most profitable motorcycle maker in the world despite its small scale?)
In the summer of 1996 Frederico Minoli was appointed as the CEO of Ducati in order to lead the company into a new era of profitability and to establish Ducati as a brand to contend with in the sports motorcycle segment. He believed that by incorporating certain basic structural changes and by redefining company’s strategic goals, it could be turned into a profitable branddriven company. Ducati’s turnaround focused on brand building and to follow a clear differentiation strategy allowing the company to charge premium prices. Moreover Ducati became very cost efficient through the highest outsourcing ratio in the industry, being the most efficient manufacturer through standardization and rationalization as well as quality control of the supplier network. As a result, the company was able to invest into R&D as well as brand building and simultaneously become the second most profitable motorcycle maker in the world despite its small scale. This strategy design was embedded in clearly defined objectives and supported by organizational arrangements. Moreover, Federico appointed a talented and passionate management team, stimulated creative decision making and set following clear objectives: Double-digit growth and equalling Harley-Davidson´s profit level
Increase market share from 4% to 10% (sport sub-segment>500cc; Ducati market).
The above approach showed following impressive results:
CAGR of EBIT grew from 1997 – 2001 by 22.61%
Share of Market in the Ducati relevant market (Sport Niche) grew from 5.1% to 6.7%
(1997 – 2001, global market) - whereas most competitors are losing market shares; only
Yamaha won shares as well and Harley shares transferred to Buell