An_an

Industry analysis 5 forces Rivalry * Very high from HD, BMW, Japanese competitors Bargaining power of buyers * High low switching cost Bargaining power of suppliers * Low has a network of 130 suppliers * Selected suppliers are chosen * Core product remain in house Threat of new entrants * Low due to strong capital requirement * and many lager competitors Threat of substitutes * Low. High end Product added value to users Company analysis SWOT Strength * Quality product * Strong R&D * Brand loyalty * Competitive racing team * Distribution system * Low fix cost due to outsourcing Weakness * In the segment with lots of competitors Opportunity * New segments * New market for women Threat * Economic downturn customer more price sensitive * High competition Financial and Market performance The companies currently were successful with all of their models with revenue increased more than 20% from 1997 to 2000 and projected reduction in 2001 to 11%. But EBITDA ratio remains high above 15%. The market share for sport motorcycle increased from 3.9% in 1996 to 6.7% in 2000. This is a clear proof that the company was very competitive among existing players. The company production and supply chain were very efficient. Ducati outsourced approximately 87% of its component yet kept in-house the two substantial parts, crank case and cylinder heads. The supplier networks were carefully chosen with at least two suppliers for each product under short term contracts, giving company much flexibility. The distribution network was designed to provide customers with high quality products and helpful after sell services through improvement of dealer quality and Ducati stores channel Three core competitive advantages for Ducati * Very good products with unique and beautiful performance * The Ducati invested heavily in R&D with 3,7% of revenue. This made company become ahead of their competitor in term of technology * Brand loyalty with the help from winning racing team Ducati should not enter the new market segment in 2001 because of the flowing reasons * The company had to invest large amount of money approximately USD 46 mil * Due to economic downturn more and more price conscious customer * Harley Davidson remain strong, loyalty customers * The company currently owned significant debt * Time consuming * ROI The company should only focus on current segments, keep investing on R&D to bring more distinct features to its products and increased customer loyalty as well as brand awareness.