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Ducati In Pursuit of Magic A Case Solution

Solution Id Length Case Author Case Publisher
2895 2021 Words (8 Pages) Jordan Mitchell, Bruno Cassiman IESE Business School : DG-1507-E
This solution includes: A Word File A Word File

The case study "Ducati: The case 'In Pursuit of Magic (A)'" presents the period from 1996 to 2001 when Ducati was led by its CEO Federico Minoli, and the motorcycle manufacturer managed to transform from a poorly performing company to generating significant revenues from motorcycles through the principles of brand management, innovation, and a strong relationship with the customers, the "Ducatisti." But, the period between 2002 and 2005 was not as successful. The company faced operational challenges such as reduced revenues, product differentiation, and issues in the U.S. market. When planning for new investors in 2006, Ducati’s primary strategic direction was to return to profitability, sustain its position as a luxury sports bike manufacturer, and actively consider avenues for profitable growth such as acquisitions and new product lines.

Following questions are answered in this case study solution

  1. What do you think Ducati's customers really are buying (e.g., specific tangible product features and intangible emotional attachment)?

  2. What is Ducati's business strategy- its strategic position and scope of competition?

  3. Itemize strategic choices Federico Minoli made to achieve the turnaround of Ducati during 1996-2001. Explain how each strategic choice lead to a widening value gap, i.e., increase in willingness-to-pay and/or decrease in cost?

  4. Why did Ducati's growth stalled between 2002 and 2005 (present your explanations in categories)? Briefly discuss how you would do to fix those problems or challenges faced by Ducati.

Case Analysis for Ducati In Pursuit of Magic A Case Solution

1. What do you think Ducati's customers really are buying (e.g., specific tangible product features and intangible emotional attachment)?

Apart from a motorcycle, Ducati’s consumers are paying for both the attributes and attributes standpoints that intertwine with their sense of self and life choices. Thus, the brand’s values are based on the promises of high-tech engineering, individual design, and pedigree, generating a potent link with the client. The physical aspect of it is where Ducati motorcycles excel through enhanced engineering and speed, agility, and power to suit the performance demands of people. The Desmodromic valve system, L-twin engine, and lightweight frames give Ducati motorcycles high performances that even challenge other brands within the sportbike category. Furthermore, there is styling that is unique to Ducati, with references to Italian design, mechanical purity, and functional beauty, which makes the motorcycles stand out from the crowd. Aerodynamic elements like the intersectional tubular trellis frame give the bike not only a power boost but also a proud look. In addition, Ducati has differentiated itself by branding its motorcycles as luxury products, which would appeal to those who want to stand out from the majority of motorcycle owners. In addition to the physical attributes, people have deep-seated attachments emotionally linked to Ducati as a product. Thus, the lengthy experience of the brand and the victories in racing – for example, in the World Superbike Championship – serve as valuable assets that give clients the feeling that they are now a part of something great and powerful. This goes a long way toward adding value to the product emotionally, making it much more than just a motorcycle. Additionally, Ducati maintains a vibrant and loyal community of patrons, locally known as 'Ducatisti.' Being a Ducati owner is like being in a club; customers of Ducati motorcycles are always eager to identify with high–performance motorcycles and the image that comes with them. Events, clubs, and the overall brand culture make this emotional bond even stronger. Thus, for many, the purchase of a Ducati also has an element of social status and signaling being associated with success and refinement. The link to celebrities, big events, and the more expansive sphere of luxury sports makes the brand aspirational and something people want to want; people want the brand because they want to be associated with it.

2.    What is Ducati's business strategy - its strategic position and scope of competition?

Ducati’s strategy is based on competing as a luxury niche producer of motorcycles in the global motorcycle market, especially in the market of high-performance sports motorcycles. The strategic positioning of the company is founded on four strategic values which include brand history, superior engineering, unique design, and customer passion. Ducati is keen on positioning the brand as a prestige one, and the company offers primarily sports bikes with high performance rather than motorcycle differentiation. Thus, the focus on the given segment helps Ducati achieve better brand identification and convey the company’s values to the unrivaled and enthusiastic audience. The brand draws on a heritage and strong record in racing, especially in the World Superbike Championship, to reestablish its brand image and enhance the credibility of its 2008 MotoGP contenders as high-performance motorcycles: born of racing, intimately linked with it.

Ducati also stands apart in terms of design approach, heritage-linked, Italian design ethos of being aesthetically, minimalistically, and ergonomically pleasing. Ducati is famous for its L-twin engine, and Desmodromic valve system that delivers high power, good handling, and truly amazing sound.

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