February 1, 2014
Being a motorcycle company that produces high performance, highly successful racing motorcycles, as well as motorcycles for the commercial market, has proven to be a winning strategy for Ducati. This case focuses on Ducati Corse, a subsidiary of Ducati Motor Holding S.p.A. that manages racing teams, bike development, promotions, and sponsorship areas of the company. Ducati Corse is a relatively small organization that encourages cross-departmental integration with its internal teams to achieve the best motorcycle design and racing outcomes as possible. Ducati started racing in the new MotoGP Circuit during the 2003 race season. With unexpected positive racing results, Ducati took the data collected from the 2003 racing season and changed too many aspects of the bike in 2004. The 2004 racing season proved to be far worse partially because Ducati failed to test all changes made. Looking forward to the 2005 season, Ducati is debating whether to switch to a modular design for their racing motorcycle that would, over time, lead to grander designs for Ducati.
Question 1: What is the organization trying to achieve?
Ducati is after a competitive advantage, via learnings from previous races, which has produced a new product design process that will allow modularity of their racing motorcycle. With success on-track, Ducati believes they can achieve increased commercial sales through a popularity increase, which comes from the surge of interest following a winning race or season. Ducati engineers collect and use enormous amounts data from previous races and tests along with rider feedback to build a winning combination of bike attributes that are specifically tuned to the nuances of the ride.
Question 2: How would you describe their operating environment? The Ducati operating environment is informal and small when compared to competitors. With most departments under one roof, the company has a siloed feel to it. Ducati has hired top graduates, who have an intense passion for motorcycles. Ducati encompasses three main principles: a data-driven approach to problem solving, a clear priority in solving problems, and frequent face-to-face communication. The importance of face-to-face communication cannot be underestimated and Ducati Corse, being a small operation, can seize the advantage of having a small floor plan, more direct personal relationships, and close geography to push operations that are more efficient.
Question 3: Who are their customers and how does this affect their decision? Ducati’s customers are in-market, sport motorcycle enthusiasts looking for a high performance bike. They also have customers, likely race fans, who may one day consider a Ducati for purchase, but may not necessarily be in the market for one now. Customer-wise, Ducati has a primary focus on the Western European and North American markets. If Ducati can win on the track, marketing has additional opportunities for promotion via traditional and non-traditional media. It is crucial that Ducati performs well on-track to give customers additional assurance and confidence when applying purchase rationale that they are buying a high performance machine.
Question 4: What at this point is the current dilemma?
The current dilemma is whether or not to take a modular approach to their GP5 design for the 2005 race season. In the past two years, they applied an integrated design approach, which had made small design changes very expensive, but resulted in high performance. This pushes Ducati Corse to evaluate the risk of taking a modular approach, which offers ease of manufacturing and the ability to change one aspect of the bike at a time, but could result in a compromise of performance.
Question 1: What accounts for Ducati’s success?
The perceived performance of the street bikes was positively influenced by successes on the track, which was intimately intertwined...
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