Competitive Advantage Ducati
Ducati produces racing-inspired motorcycles with unique engine features, innovative
designs, advanced engineering and overall technical excellence. Ducati offers a range of the most
highly sophisticated and sought-after bikes ever created for the road.
There are various key sources of value creation with Ducati’s business activities. They
create value through their core competencies of research and development, product design,
manufacturing, and brand management. This had lead them to a competitive advantage within
the motorcycle industry.
Their sources of strong innovation contribute to their competitive advantage. Ducati’s
Desmodromic valve management system. R&D sources are engineers who have been able to
generate a feeling and sense of beauty through aesthetics of the Ducati engine. Product design
and marketing carries a great source of brand management where the subculture of Ducati has
only grown stronger through differentiation techniques in motorcycle designs and marketing
plans. Ducati is able to outsource production to the greatest possible extent, so that they can
maintain their focus on manufacturer their engine, which the key aspect of their competitive
advantage.
Ducati has employed a focused differentiation strategy to maintain a competitive
advantage in the motorcycle industry. Ducati could differentiate its products by extensively
focusing on the sports bike segment of the industry. Their core competencies of research and
development, product design, and brand management helped them achieve their strategy of
differentiation. Ducati encouraged standardizing of products using two crank cases and three
cylinder heads, which created more efficiency gain in manufacturing and fast production. Ducati
seeks to be differentiated and create a feeling of exclusiveness for its customers
Ducati has been able to sustain a very high brand loyalty of its customers. This loyalty and pride
is generated from the overall lifestyle that is obtained from owning and riding a Ducati bike.
The elements of Ducati’s competitive advantage that are most sustainable are their research and
development and brand management, which shapes their brand image. Ducati has been able to
eliminate this threat of imitation through the narrative of the brand and the culture around it. The
history of Ducati is something that never can be copied. In relation to the industry, only Harley
Davidson can utilize on its culture in a similar way as Ducati. Other competitors have little or no
cultural aspect as a competitive advantage
The different products functionality, the design, the brand, the Italian culture and many other
factors attribute to define the beauty of Ducati.
Overview:
After a, thorough internal and external analysis of Ducati organization, we came up with
an assessment of where Ducati is now. The main demographic of baby boomers is aging, which
correlates to how customer preferences are changing. This leads back to the question of should
Ducati enter the cruiser market to meet the needs of these changing views. Research and
development in aesthetics and performance is also expanding, so that Ducati can continue stay
ahead of its competitors at a larger margin. The last thing that shows where Ducati is today is the
increase in demand for bikes tailored to women. There is an increasing demand for a different
kind of bike and Ducati needs to find a way to position itself in the industry to meet these needs
and improve their competitive advantage.
Based on where Ducati is now, we originated four options for Ducati that may improve
their competitive positioning if implemented correctly. The four options are to enter the Cruiser
market, to strengthen more into the sports bike segment, to tap into the Japanese market, and to
capitalize on the women customer segment. Before these options could be implemented, we had
to evaluate each option from a strategic and financial perspective. It was important to take into
consideration the advantages, disadvantages, and if the option would be a good strategic fit with
Ducati’s core competencies and competitive positioning.
Starting off with option one, there are advantages and disadvantages in Ducati entering
the cruiser market. The main advantage of entering the cruiser market for Ducati would be that
they would have the opportunity to expand into a segment with potential for future growth,
leading to the possibility of increased market share. On the other hand, there are some
disadvantages that potentially out way the advantages. Ducati would face heavy capital
investments and may lose focus on the existing segment. This could lead to the loss of the value
of their brand, which is one of their core competencies. It also may be hard for Ducati to
penetrate the cruiser market because Harley Davidson is already dominating this segment with
its own style of strategy. If Ducati were to enter the cruiser segment, this move might put the
company at risk because it would sway away from their focused differentiation strategy. From a
strategic fit perspective, this option is inconsistent with the tradeoffs, doesn’t leverage
advantages of Ducati, and requires developing different capabilities than the ones Ducati already
possess.
Option two takes a different approach and states that Ducati should strengthen the sports
bike segment that they already control. This option has the pros of reducing the risk by not
entering into a new segment, offering more support to existing loyal customers, and continuing
to increase their brand loyalty. This fits with Ducati’s core competency of brand management.
This option would allow Ducati to strengthen their positioning in the sports bike segment by
investing more into research and development that is already exceeding. This option also stays
consistent with Ducati’s focused differentiation business strategy.
It would not be worth it for Ducati to sacrifice their narrow, differentiated strategy.
Harley Davidson is already dominating the segment and entering the segment could lead to a
fierce battle between the two.