Case

Solution of mandatory Ducati Case

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Course
Strategic Management

Institution
Katholieke Universiteit Leuven (KU Leuven)

Solution of mandatory Ducati Case. Save yourself the preparation and the 2 hours waisted in class and use this complete answer solution. The professor does not provide an answer solution online!

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Uploaded on May 20, 2019
Number of pages 3
Written in 2018/2019
Type Case
Professor(s) Unknown
Grade Unknown

solution ducati case

Institution
Katholieke Universiteit Leuven (KU Leuven)
Education
Master Business Economics
Course
Strategic Management

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Case Ducati
What is Ducati’s business scope?
 Geographic
 Europe(Italy), USA
 Customer
 Young people (-30), male (90%)
 Product
 Sport motorcycles (niche market)
 Higher segment: more expensive
 Experience
o Racing track
o People don’t buy a motorcycle; they buy an experience (‘Italian racing family’) 
intangible is important as well
 High performance, quality & very functional
The scope is consistent, which is important:
In Asia motorcycle is primary way of transport, whereas in US and EU it’s a secondary way: go driving
in the weekend with friends. So, they mostly target US and EU as usage situation is similar.
How does Ducati create value(Minoli)?
Strategic decisions should always create value
 Willingness to pay
 Tangible
o New products
o Smaller time-to-market
o Lots of R&D (to keep up with racing)
 Intangible
o Museum
→ They need to balance tangible & intangible
 Costs
 Outsourcing
o So you can focus on your core business
o Yet it still has to be an Italian motor cycle (don’t lose its heritage)
o Economies of scale
o Higher quality
 Because you don’t have to remake mistakes, avoid inefficiencies
 Affects the willingness to pay

How does Ducati capture value?
 Apparel & accessories/Merchandising
 Customization of your motor: nieuwe uitlaat van 3-6K
 Owned by private equity, in 5 years time they sell so they want to do an IPO to create more
enterprise value (general strategy of private equity). 3 levers of EV: margin, resource utilization
and growth. Ducati focuses on the last two.
ROIC is combination of margin and resource utilization.
 Price changes “(WTP-P) -> clients and (P-costs)-> value to Ducati”
 If P↘, the value is captured by the customers, and if P↗ by Ducati
 Premium price stays +- the same (consistent)
o Becomes a lot more attractive for customers as more value to the C (no Ducati clients
buy one, q↗) and we spread (P-costs) over a larger q.
o Ducati is capturing more value because there are more units sold

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