Three growth Options for Ducati are
1. Enter into the new Cruiser Market
2. Increase Distribution Channel through New Dealers in US and outside Europe 3. Introduce sporty bike segment for women
Entering into New Cruiser Market
Benefits: Globally, the current cruiser market has one majority player and others are small players and within the European market there is no major player. So the threat of competitor response is quite low. Cruiser market is dominated by Harley through its American brand which might be less effective in Europe. Market growth is high. Location of Ducati in continental Europe and the European brand identity can be used as an advantage. Entering into this market will increase the economies of scale with their European plants which they were not able to achieve previously. Risks: Brand name dilution with respect to the sporty image. Huge marketing costs. Heavy investment needed for entering into the new cruiser market with a complete range of new products. Huge change after the recent turnaround which has seen stabilized growth. Increase Distribution Channels outside Continental Europe
Benefits: Increased market penetration in huge markets in US and other markets outside Europe. No major players in the sporty bikes category in US. Strong racing brand has positive effects in US market. Low investment needed as we can increase the distribution by dealer agreements. Risks: Disadvantaged by current manufacturing locations in Europe. Huge Logistics costs. US in recession with dotcom bubble. Introduce new bike segment for Women.
Benefits: Attractive new customer base. High market growth potential. Use of existing technology with low seat height is an advantage for Ducati to market new products to Women. Achieve economies of scale in manufacturing. Risks: Brand dilution threat as Ducati is known Sporty bikes with a lot of power. Competition is high with Japanese manufacturers in this segment. Conclusion