Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet
This case discusses the e-business strategy of Ducati, an Italian manufacturer of high-performance motorcycles. It describes how, on January 1st, 2000, Ducati exclusively sold through the Internet its new MH900e motorcycle at 15,000 Euros per unit. It was the first motorcycle ever sold through the Internet and the first-year production of the MH900e was sold out after just 31 minutes! The case also presents the way the company created the physical and the virtual World of Ducati.
Swot Analysis of "Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet" written by Tawfik Jelassi, Stefanie Leenen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ducati Motorcycle facing as an external strategic factors. Some of the topics covered in Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet case study are - Strategic Management Strategies, Internet, Sales and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet casestudy better are - – increasing commodity prices, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , there is backlash against globalization, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings,
technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ducati Motorcycle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ducati Motorcycle operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet can be done for the following purposes –
1. Strategic planning using facts provided in Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet case study
2. Improving business portfolio management of Ducati Motorcycle
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ducati Motorcycle
Strengths Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ducati Motorcycle in Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet Harvard Business Review case study are -
Successful track record of launching new products
– Ducati Motorcycle has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ducati Motorcycle has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Ducati Motorcycle is one of the leading recruiters in the industry. Managers in the Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Ducati Motorcycle has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Ducati Motorcycle in the sector have low bargaining power. Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ducati Motorcycle to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Ducati Motorcycle is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet firm has clearly differentiated products in the market place. This has enabled Ducati Motorcycle to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ducati Motorcycle to invest into research and development (R&D) and innovation.
Organizational Resilience of Ducati Motorcycle
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ducati Motorcycle does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Ducati Motorcycle has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ducati Motorcycle to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Ducati Motorcycle is present in almost all the verticals within the industry. This has provided firm in Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the Ducati Motorcycle are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Strategy & Execution field
– Ducati Motorcycle is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ducati Motorcycle in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Ducati Motorcycle is one of the most innovative firm in sector. Manager in Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet are -
Low market penetration in new markets
– Outside its home market of Ducati Motorcycle, firm in the HBR case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet, in the dynamic environment Ducati Motorcycle has struggled to respond to the nimble upstart competition. Ducati Motorcycle has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ducati Motorcycle is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Ducati Motorcycle is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ducati Motorcycle needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ducati Motorcycle to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Ducati Motorcycle has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet should strive to include more intangible value offerings along with its core products and services.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ducati Motorcycle supply chain. Even after few cautionary changes mentioned in the HBR case study - Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ducati Motorcycle vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet, it seems that the employees of Ducati Motorcycle don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Capital Spending Reduction
– Even during the low interest decade, Ducati Motorcycle has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High cash cycle compare to competitors
Ducati Motorcycle has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Ducati Motorcycle has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet can leverage the sales team experience to cultivate customer relationships as Ducati Motorcycle is planning to shift buying processes online.
Opportunities Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ducati Motorcycle in the consumer business. Now Ducati Motorcycle can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Ducati Motorcycle can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Ducati Motorcycle can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Ducati Motorcycle can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Ducati Motorcycle to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Manufacturing automation
– Ducati Motorcycle can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ducati Motorcycle to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ducati Motorcycle to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ducati Motorcycle can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Ducati Motorcycle can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ducati Motorcycle can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Ducati Motorcycle can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ducati Motorcycle in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Ducati Motorcycle to increase its market reach. Ducati Motorcycle will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Ducati Motorcycle has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ducati Motorcycle can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet .
Increasing wage structure of Ducati Motorcycle
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Ducati Motorcycle.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Ducati Motorcycle needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Ducati Motorcycle is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Ducati Motorcycle can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ducati Motorcycle in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ducati Motorcycle business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Ducati Motorcycle high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet, Ducati Motorcycle may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Environmental challenges
– Ducati Motorcycle needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ducati Motorcycle can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Ducati Motorcycle needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Ducati Motorcycle (Italy): Riding Traditional Business Channels or Racing through the Internet is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ducati Motorcycle needs to make to build a sustainable competitive advantage.
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