Case created the Vulcan cruiser line which earned
Case Study: Ducati Should Minoli seek to grow the business in 2001? Since Minoli took the position as CEO of Ducati in 1996, the business has grown and became extremely successful. He transformed a company that was once on the verge of going bankrupt into one of the most profitable motorcycle manufacturers in the world. The explosive growth, profitability, market share, and revenues prove Minoli truly is an expert in turnaround management. He set high goals for the company such as reaching 10% market share and earning profits comparable to Harley Davidson.
Although the company has seen stable change and growth, Minoli refuses to stop here. He hopes to continue growing the business and venture out into a market where Ducati has never been before, the cruiser market. Although Minoli has done nothing but prove himself trustworthy of accomplishing such a change, the cruiser market is so large and already dominated by not only Harley Davidson, but all of the existing cruiser manufacturers as well. The choice to expand the business is wise, but venturing into the cruiser market would not be a good idea.For starters, the cruiser market has been dominated by Harley Davidson since it began in 1903. Harley has seen 15 consecutive years of record revenues and net income, making it an extremely successful and powerful company.
They emphasize their focus on the American market and represent a social and cultural phenomenon that no motorcycle company can compare. Not only would Ducati have to compete against the strongest brand in the industry, but there are many other competitors in the cruiser category already.BMW, Honda, Kawasaki, Suzuki, and Yamaha all offer products in that category. Kawasaki created the Vulcan cruiser line which earned the title of being “Cruiser of the year. ” Entering a market with such domination would be extremely tough and risky.
Ducati’s brand targets a much younger crowd than Harley Davidson. Ducati targets riders ages 25 to 35, which has been consistently decreasing. Harley Davidson riders are around 45 years old. The cruiser crowd is a little bit older than Ducati’s target market and they would need to find a way to overcome that gap.In addition to grabbing the attention of an older market segment, Ducati would need to increase their advertising efforts.
Currently they only advertise through specialized magazines. Their campaigns feature some central values of the brand: the Italian style, the history of the company, the young age of the riders and their sporty attitudes. That entire advertising strategy would need to change because they will need to reach more audiences than just specialized magazines and show how their cruiser will fit into the Italian style and the young rider culture.If Ducati did create a cruiser, Minoli would need to reevaluate their strategies. Lastly, Ducati should be aware that Harley Davidson has the highest repeat purchase intention between the major competitors with 68% (Exhibit 16).
Second is BMW with 67%, who also offers a very successful cruiser. It would be very hard for Ducati to get Harley or BMW customers to switch over to their new and unproven product.Ducati has been very successful in the other motorcycle segments, but adding the cruiser to their line of products could completely fail. Ducati’s main products emphasize speed, acceleration, and minimal comfort- the total opposite of a cruiser’s features. Ducati has a great product, top notch engineers, and strong potential. Since 1996 they have become more efficient, skilled, and increased brand loyalty. Although I believe Ducati can become even more successful in the future, I believe entering the cruiser market could be very risky.