Why is the motorcycle industry so attractive?
What makes the motorcycle industry extremely attractive is rivalry. Competition between rivals in the motorbike industry is quite powerful. As each main contender comprises its own market position, price cut, novel product prologues, marketing campaigns, and creations in motorcycle technology constantly stimulate competition among companies. Instead of contending according to price, the key players in the motorbike business are inclined to contend according to services and characteristics. Each main firm proffers distinct kinds of products intended to suit various customer sectors. Currently, there is a high intensity of segregation between classes of products and brands, resulting in major customer cost switch. Accessories and parts are manufactured for a single brand. Moreover, scopes are high, and the product remains highly consumable. As a result of such aspects, rivalry is not inclined to drift down towards cost to the extent that other factors do.
Although price is not the center of rivalry in the motorcycle industry, the level of competition remains steep. The industry is comprised of few different leaders, each of which is major and possesses its high brand fairness. As a result of the industry’s absence of a main and definitive leader, rivals wind up stealing each other’s business. Furthermore, the absolute number of rivals within the market, besides the major few, brings about a profusion of buying assortments for the customer and found serious opposition.Â Competitors in the motorcycle industry exhibit different attitudes and perceptions on how to contend. As one firm may deem that introducing new traits to their products will assist in boosting up sales, a further firm may think that augmenting speed capacities will be more advantageous. One more firm may consider that providing lenient financing is the solution. Firms are continuously contending against each other to come up with the â€œnext big thingâ€ and magnetize as many consumers as achievable. This fight of thoughts and practices generate an industry where varied characters and ways occasionally disagree or build strong rivalry.
What is the logic behind Minoli’s turnaround efforts? In which ways have they been successful and unsuccessful?
Under Minoli’s administration, he effectively set up Ducati’s fundamental logic as a sports motorbike top brand, and established the firm’s essential goals with regard to boosting growth and upholding profit margins. Minoli initiated this goal-oriented tactical decision and created an outline in order to reform Ducati all over. He did not only facilitate the way for Ducati to be viewed as a major brand that is able to compete in its niche sports sector, but as well reintroduced Ducati as a way of life and entertainment instead of just motorcycles.
A key to branding is to preserve consumer maintenance. As stated in the case, since 55 percent of Ducati’s consumers are inclined to buy more than one motorbikes, it is vital for Minoli to set up strong buyer devotion in order to gain recurring customers. With that objective in mind, Minoli initiated degrees of investments in consumer maintenance activities to escort his branding strategy. Applications comprise aspects such as marketing to expand customer base, generating customer service for quality approval, customizing bikes for purposes of brand niche fragmentation, and structuring Ducati legacy to rebuild customer loyalty. Furthermore, Minoli as well restructured the manufacturing system by contracting out the majority of Ducati’s essential components in order to keep the flexibility and competence for the assembly process (76-87 bikes manufactured per employee in 3 years). Regulating cylinders and crank cases for various models and taking over accessories and kit firm also facilitated the way for Ducati to earn a higher yield margin (12%) and turnover rate.
Minoli’s efforts turned out to be quite successful, as Ducati’s exceptional business model and key activities lead to the production of Ducati’s technique of quality motorbikes, thus mostly highlighting the sport segment. Ducati’s strong point stems out from four major activities, which are manufacture process, allocation system, expansion of product and R&D, and â€œThe world of Ducati.â€ Minoli and Ducati focused on enhancing the dealers’ performance rather than the geographic development. There are several facets that Ducati took into account for traders’ performance such as sales drivers, fine technical support, and a sufficient physical room for product showcase.
Should Ducati get into cruisers and why?
In order for Ducati to contend in cruiser market, it must fulfill the subsequent requirements. Primarily, Ducati must comprise a product that is distinguished from that of its rivals, exactly the way it controls and focuses on the sport bike sector. The cruiser should possess a legacy of Ducati’s brand, meaning that Ducati must possess its own technique of a cruiser, just as BMW and Harley-Davidson. In order for this to be executed, Ducati is required venture in intense capital speculation related to designÂ practice and R&D. By focusing on the novel market line, Ducati might lose concentration on its existing section and consequently lose its brand value and loyalty. Following, Ducati must come up with a strategy to draw consumers to the new sector. It is not easy for Ducati to enter the cruiserÂ market since Harley-Davison is by now taking over this segment in addition to the latter’s unique character of strategy that designated it as the industry’s most profitable firm. In addition, almost all of Harley-Davidson buyers are exceedingly faithful to the brand, which makes it even more difficult and complex for Ducati to collect a new client base dedicated forÂ the cruiser sector. Creating a new plan, might consume an irrational amount of time via research. Despite the ability of Ducati to engage in such capital venture, specifically to currently penetrate the cruiser market, unforeseen economic slump might influence Ducati’sÂ productivity at the heart of the course of going into the cruiser market. In a nutshell, Ducati should not penetrate the cruiser segment. Despite being a probable option, there is no urge for Ducati to pierce the market according to its existingÂ performance stage, although the firm has undoubtedly underwent growth in the past few years. Ducati’s development lately wasÂ likely as a result of its powerful brand name and customs that boosted the number of loyal and devoted customers. Ducati must merely concentrate and spend more on the current segment, as it also comprises its individual character of strategy that allows it to outshine within sport bike sector, just as Harley-Davidson in the cruiser market. I think Ducati should maintain its tactic and reinforce especially so nobody can ever threaten to penetrate into the sport market.