1. What makes the motorcycle manufacturing industry so attractive?
Ducati has found major success in the motorcycle industry with its stylish and performance driven vehicles. Although several competitors have decided to leave the industry, Ducati believes the industry to be attractive for several reasons. The fact that a Ducati product is a niche product works towards the company's favor. As any niche product, the consumer's are very particular about purchasing the Ducati brand and the Ducati brand only. This creates a set of consumers who are not price sensitive. Ducati also offers a selection of products that are highly differentiated that gives the consumers zero buyer power.
The motorcycle industry also has a very broad range of consumers that come from different age, income, and education backgrounds. Its appeal is even starting to gain traction among women consumers, which gives way to a whole new market. Lastly, the market is differentiated into four key segments based on consumers' preference of lifestyle, comfort, functionality, and performance of a bike. These segments each present an individual market that creates more opportunity for profit.
2. How did Ducati turnaround from the brink of bankruptcy to become one of the most profitable motorcycle manufacturers in the world? Why are buyers willing to pay such a premium for Ducati motorcycles?
One of the largest reasons Ducati was able to turnaround from the brink of bankruptcy was the leadership of their new CEO, Federico Minoli. Minoli implemented a strategy of strengthening a global brand that appealed to every type of rider. The major selling point of Ducati according to Minoli was the history and reputation of the brand. Even through their difficult times, the strong loyalty for a brand that had been making unique and beautiful motorcycles since 1926 kept the company going. This same respect is why customers are willing to spend more on a Ducati motorcycle. The engine and power of the...
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