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ducatiessaySWOT-HARLEY - Student 14025147 11209559 14027895...

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Student #: 14025147, 11209559, 14027895, 14024392 Introduction: “…everything should be continuously rediscussed…” Frederico Minoli (Gavetti, 2004, pg.861) In the summer of 1996 Frederico Minoli was appointed as the CEO of Ducati in order to lead the company into a new era of profitability and to establish Ducati as a brand to contend with in the sports motorcycle segment. In the years preceding the revolutionary turnaround, the company changed hands a number of time which resulted in a lack of overall strategic direction. Minoli was faced with a company which, despite having a team of top engineers, had gained a reputation for average quality as a result of inefficient production and poor management. Until 1996 it was driven by the imaginations of its engineers rather than by goal-oriented strategic decisions. Minoli described Ducati’s top management as operating in “a structured chaos” (Gavetti, 2004, pp.861). He believed that by incorporating certain basic structural changes and by redefining company’s strategic goals, it could be turned into a profitable brand-driven company. Ducati’s turnaround focused on brand building which was supported by the reconfiguration of a number of activities ranging from increased efficiency in the production process to broadening its customer base. Having almost doubled its market share in 2001, Minoli wanted to find new sources of growth. Among others he considered the cruiser market, currently dominated by Harley Davidson. His goal was to compete directly with Harley Davidson in Europe by introducing a cruiser that combined Ducati’s high performance engine with its own unique design. This essay will begin with a SWOT analysis of Ducati as it stands at the end of its turnaround program. The analysis will bring to light Ducati’s strategic position in the industry as well as any potential that the company may have built up to further diversify into other, related markets such as the cruiser market. This will be followed by a study of the cruiser market using Porter’s Five Forces Framework (pp.118-119 in Stonehouse et
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al, 2004). The report will assess whether or not Ducati has built up the capabilities to diversify into the European cruiser market successfully. It must be noted that this report provides a preliminary assessment of Ducati’s ability to enter the cruiser market based on a thorough examination of the company’s attributes and a preliminary study of the broad characteristics of the market. It hopes to lay the grounds for a more detailed analysis of cruiser market that goes beyond the scope of this paper. 1. SWOT The following SWOT analysis will provide insights into Ducati’s internal strengths and weaknesses at the end of the turnaround as well as the opportunities and threats posed by the external environment in which the company operates.
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