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Ducati Essay

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Ducati Essay
Questions to answer 1) How did Ducati become the second most profitable motorcycle maker in the world despite its small scale?

2) What is the fundamental economic logic of Minoli’s turnaround?

3) Can Ducati sustain its position in the sport segment? Can Honda and the other Japanese manufactures stop its growth in this segment?

4) What strategic alternatives are available to Minoli in 2001? Which alternatives would you recommend, why?

GMAN 512 Midterm
11 February 2010
Dave Reynolds What are the global driving forces in this industry in terms of cost factors, markets and competitive factors? Ducati, Harley-Davidson (H-D), BMW, Triumph, Honda, Kawasaki, Suzuki and Yamaha together produced motorcycle models that were categorized into seven market segments: Off-Road, Cruiser, Touring, Hyper-Sport, Super-Sport, Sport-Touring and Naked. All four Japanese manufacturers have models in all seven market segments while the remaining competitors have models in select segments. The Japanese manufacturers and UK’s Triumph had average MSRP’s of less than $10,000, while BMW, Ducati and H-D had average prices above $10,000. This price boundary was the price elasticity of demand inflection point: price-sensitive consumers tended to select the less expensive bikes, while riders who made purchase decisions on factors other than price bought BMW’s, Harley’s and Ducati’s. As a result, the Japanese companies commanded 80% of the global market from 1996 – 2000.
Honda, Yamaha, Suzuki and Kawasaki all made models that were comparable to each other in terms of pricing, design and technology. Their individual shares of the market across all segments do not vary appreciably from ’96 – ’00. That Honda and Yamaha agreed to share shipping costs in order to save 30% on delivery costs, with Kawasaki and Suzuki soon to ink a similar deal, tells us that these rivals were comfortable with the stasis of their relationships in the market.
BMW, Ducati and H-D

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