Ducati Case Study

Topics: Ducati, Ducati 1098, Brand Pages: 8 (2783 words) Published: October 7, 2013
Case Study
Ducati:

Content

Summary
Ducati is an Italian racing-motorcycle manufacturer whose products are characterized by unique engine features, innovative design, advanced engineering and overall technical excellence. In its 80 years of history, the company has won eleven of the last thirteen World Superbike Championship titles and many more individual victories. Ducati produces motorcycles in four market segments which vary in their technical and design features and intended customers: Superbike, Supersport; Monster and Sport Touring. The motorcycles are sold in more than 40 countries worldwide, with a primary focus in the Western European and North American markets. Despite its success in racing and products, the company went almost bankrupt in 1996 when it was taken over by Texas Pacific Group. The company experienced a very successful turnaround between 1996 and 2001 with the help of the new CEO Federico Minoli. Under his leadership, the company strengthened the brand (including the establishment of the Ducati Museum), boosted research and development, introduced new models and outsourced heavily. Nevertheless, the financial situation of the company went down again from 2002 to 2005 due to mistakes in product selection, decline of the US dollar, and so on. Therefore, Texas Group sold its stake in Ducati to InvestIndustrial. In order to achieve the growth in 1996-2001 again, the company now has to decide on the best growth strategy. Some alternative strategies are to invest in technology, product lines, Ducati Image or shares to increase the value of Ducati. The Problem

How can Ducati re-achieve the growth they had between 1996 and 2001? Cast of Characters
People
Federico Minoli, CEO
Federico Minoli, 57, has been the Chairman and CEO of Ducati between September 1996 and May 2007. He was hired by Texas Pacific Group as Ducati’s new CEO in 1996. He had a successful history in different companies, starting in the Italian division of Procter & Gamble in 1974 and later moving between consulting firms (McKinsey and Bain & Co.) and industry (as the CEO of the U.S. division of Italian garment brand Benetton). After becoming the CEO of Ducati, he installed a new top-tier management team. He created the “World of Ducati” with his management team by investing in the Ducati brand. Some of the investments were the establishment of the Ducati Museum, purchasing a controlling interest in Gio.Ca.Moto, which was an apparel and accessories company that had been producing products for Ducati, and forming a joint venture with Dainese to develop and manufacture special riding equipment. Minoli left the largely unstructured company alone to encourage creativity and teamwork. He had set two goals: double-digit revenue growth and an EBITDA ratio comparable to Harley Davidson’s of 20 percent. Institutions

Texas Pacific Group
An American investment firm that took over Ducati in 1996. It brought much needed cash and a new group of international managers. InvestIndustrial Holdings SA
An Italian firm focused on providing industrial solutions and capital to leading mid-market companies in Southern Europe. In late 2005, it bought the controlling shares of Ducati from Texas Pacific Group. MotoGuzzi

Italy’s oldest motorcycle company that mostly produced cruisers. Minoli had made several attempts to purchase this company instead of building a cruiser with the Ducati name, although never been successful. Acquisition of MotoGuzzi is always an option for Ducati, according to CEO Minoli. Chronology

2007: Gabriele Del Torchio becomes the new CEO, taking over Federico Minoli’s former position. Ducati takes its first MotoGP World Title. 2006: The Desmosedici RR is launched at the Italian MotoGP in Mugello. The Superbike 1098 is also announced and voted "Best Design". 2005: Controlling shares of Ducati changed from Texas Pacific Group (TPG) to the Italian company Investindustrial. 2003: The Multistrada is on the road. ...
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