Group 5 Ducati Week 4

Chang Jia Xun | Loh Wan Jing Alicia| Lynette Ee Su Min |Ng Yew Yeong 1
Company Overview
MOTORCYCLE MANUFACTURER HEADQUARTERED IN BOLOGNA, ITALY

Also offers bike parts, accessories and apparel Automobile manufacturers such as
Lamborghini and Ferrari are located in the
same region
Ducati’s Value Value Chain Core Core Core

Introduction Conclusion 2
Chain Analysis Competency #1 Competency #2 Competency #3
Company History
INTRODUCTION OF
SOPHSTICATED BIKES FORTUNES DECLINED SHARPLY LIQUIDTY PROBLEMS AT CAGIVA
including Ducati’s signature due to decision to refocus the deprived Ducati of the necessary
Desmodromic valve company on products other than capital funding, leading to
distribution system motorcycles production delays
1926 1960s to 1970s 1985 1996
1950s 1980s Mid-1990s

DUCATI STRONG GROWTH CAGIVA TEXAS PACIFIC GROUP
was founded fueled by Ducati’s success in acquired Ducati acquired Ducati, Federico
the international racing Minoli appointed as CEO
circuit

Product Overview
Products Breakdown of Sales
Breakdown of Ducati’s Motorcycle Sales in 2000
32%
Hyper-Sport
Super-Sport
50%
Touring
Naked
SPORT BIKES 10%

Only competes in the Sport Bikes niche
market segment, offering 21 models in total 8%
From Exhibit 8

Ducati’s Competitors
Market Share of Sport Niche Competitors in 2000

3% 2% 7%
4%
• Ducati relevant market largely dominated by Japanese
Ducati manufacturers (Suzuki, Honda, Yamaha and Kawasaki),
14%
Suzuki holding a total market share of 84% in 2000
25% Honda  Japanese manufacturers competed in all of the
Yamaha segments of the motorcycle industry and typically
Kawasaki did not just specialize in the production of
BMW motorcycles e.g. Yamaha also made water vehicles
Harley-Davidson • European firms such as BMW had stronger presence in
22% other market segments and held a relatively small
Buell
market share in the Sport bikes segment
23%
From Exhibit 3

QUESTION 1
What are the value chain activities of Ducati after Minoli became the CEO?
6
Value Chain Analysis
Product Development
and Research &
Development
Marketing Production
Distribution
Human Resource

Product Development and R&D
Product
Development and
R&D Product Development and R&D
• Spent 3.7% of its revenues on R&D activities in 2000
• R&D investments increased from €3.2m in 1997 to €12.9m
Marketing Production in 2000
• Product development conducted by internal design division
• Operates in close contact with the racing division and
incorporates feedback from market research
• Collaborations with external organisations located in the
Distribution district of Bologna, such as TWR and Ferrari car company
Human Resource

Production
Product
Development and
R&D Production
• 87% of production activities are outsourced as of 2001,
planned to increase it to 90%
Marketing Production  Only R&D, design, quality control, and the machining of
two critical components are conducted in house
• Majority of Ducati’s suppliers belonged to the Emilian
industrial district
• Collaborations with other firms to form the “Engine
Distribution Technology District”
• Standardisation of its products  used only two crank cases
and three cylinder heads across all its models
Human Resource

Production
Product
Development and
R&D Supply Chain Management
• Strict supplier selection and careful quality control
procedures
Marketing Production • Largely short-term contract with suppliers
• Typically identifies at least two sources of supply for each
component, switches to the alternative supplier as needed
• Platform approach to production used for a large number of
components: one key supplier responsible for the provision
Distribution of a component, and managing suppliers of sub-component
Human Resource

Distribution
Product
Development and Distribution
R&D • Established wholly owned sales and marketing subsidiaries
in strategic markets
• Emphasis on the quality of its dealers – competent sales
forces, good technical assistance, and adequate physical
space to display Ducati motorcycles and apparel
• “Ducati Stores”: offers superior technical and service
support with a retail environment that emphasises the
distinctive racing heritage and engineering capabilities of
Distribution Ducati, and displays Ducati accessories and apparel
Human Resource

Marketing
The World of Ducati
Product
Development and Racing
R&D
Stores Advertising
Motorcycles
Accessories
Apparel
Distribution Museum &

Events
University
Ducati
Human Resource Owners Club
From Exhibit 7

Marketing
Product Racing
Development and
R&D • Participation in racing competitions, winning 8 Riders’
titles and 9 Manufacturers’ titles in the World Superbike
Championship from 1990 to 2000  increased media
coverage and developed Ducati’s strong reputation in the
Marketing Production performance segment
• “Open paddock” policy where members of Ducati Clubs
were given the privilege of interacting with the racing
team
Distribution
Museum
• Attracted 10,000 visitors each year
• Celebrates the history of the company, its technical
Human Resource achievements, and its racing tradition

Marketing
Product Ducati.com
Development and
R&D • Internet used to conduct market research – understand
the needs of customers through online polls and market
surveys
Distribution
Human Resource

Human Resource
Product
Development and
R&D Human Resource
• Minoli looked for “talented managers who could become
passionate about Ducati”
Marketing Production • Passionate and talented engineering team
Distribution
Human Resource

QUESTION 2
How do these activities contribute to the cost and differentiation drivers of Ducati?
16
Establishment of Internal Design Division Time Taken from Model Development to Market
40
• Reduced the “time to market” for new product launches 36

35
30
Resources Characteristics
25
Human assets Competency of internal design team
Months
20
Social capital Close coordination and fast communication 15

15
assets with other departments
10
Technological Develops and owns its own design
assets technology 5
0
900SSie Previous Model Development
Model

Establishment of Internal Design Division
Product
Development and CAPABILITIES
R&D • Products with the latest technology can be launched quickly
• Product is available for purchase in the market within a
shorter period of time
DIFFERENTIATION
Distribution • It ensures that the latest technological advancements are
available in the market before competitors
Human Resource

More External Sources for Product Development and R&D
• For example, cooperation with TWR, a major Formula One engine development centre and formed a joint venture
named HPE (High Performance Engineering) with some local producers like Piero Ferrari of the Ferrari are company to
develop advanced engine technology
Social capital assets External relationship with suppliers and development centre
Physical assets Its prime location in Bologna gave it access to external

sources of technical skills and innovations in the mechanical
district of Bologna

More External Sources for Product Development and R&D
Product
R&D • Ability to tap on external expertise to develop advanced
technology
DIFFERENTIATION
• Leads to more innovative products and more advanced product
Distribution technology
Human Resource

Close Coordination between Departments
• There was close coordination between product development and R&D, and Racing division and Marketing
Department
• Allowed fast and clear transmission of market research to engineers in product development and racing division, as
well as marketing department
• Market research provided a fundamental input to both design and technological innovation
Organizational assets The system of communication among different departments
Social capital assets Relationship between the different departments

Close Coordination between Departments
Product
R&D • Ability to innovate more efficiently and effectively
DIFFERENTIATION
• Leads to more innovative products and more advanced
technology (quality)
Distribution
Human Resource

Ducati’s Engineering Team
• Reputed as one of the most expert and skilled in the industry
• E.g. Desmodromic valve distribution system was introduced in 1950s which is still used in 2001 on every motorcycle
produced. It achieves more revolutions per minute and greater “usable” power (quality) and makes a deep
intoxicating noise that represents Ducati (brand)
• Minoli recognised that Ducati had a group of top-notch engineers, strong engineering culture with a real passion for
races
% of Total Revenues
Resources Characteristics 1.2
1
Human capital assets The expertise and knowledge of engineers
0.8
Organizational assets Culture in the firm 0.6

0.4
0.2
0
R&D
Ducati 2000 Ducati 1996
From Exhibit 12

Ducati’s Engineering Team
Product
R&D • Have the motivation and skill to innovate and increase quality
of products, as well as build the company’s brand through its
races
DIFFERENTIATION
• Leads to more innovative products and more advanced
Distribution
technology (quality)
Human Resource

Production
Aggressive Outsourcing Policy
• Ducati outsourced many of its operations, and maintained only its in-house R&D, design, quality control, and
machining of 2 key strategic components (crank cases and cylinder heads)
• Ducati’s outsourcing level is higher than industry average
• Ideally leads to cost reduction and lower capital expenditure
Social capital assets Relationships with a large network of external suppliers that
it can outsource to
Human capital assets Experience and knowledge in sourcing for suppliers,
conducting quality control procedures etc

Production
Aggressive Outsourcing Policy
Product
R&D • Ability to be more productive and cost-efficient in its production.
• Ability to increase quality as it can focus on key areas of
production and outsource other components who suppliers with
greater expertise in these areas.
DIFFERENTIATION
Distribution
• Leads to more high-quality products
LOW COST
Human Resource
• Cost-savings from outsourcing

Production
Supply-Chain Management
• Ducati adopted stricter selection procedures and careful quality-control procedures for its suppliers
• Since 1996, the total number of its suppliers dropped from 200 to 130
• Ducati would have short-term contracts with suppliers, and also identify at least 2 sources of suppliers for each
component so that they could easily switch suppliers when needed
• Ducati motorcycles had a longer lifespan than typical competitors’ machines
• Engine lifespan of 10 years and frame lifespan of at least 5 years
• Ducati changed its image, since it was previously known for its mediocre reliability and high maintenance costs
Social capital assets Relationships with a large network of external suppliers


Production
Supply-Chain Management
Product
R&D • Ability to increase quality and reliability of its products
DIFFERENTIATION
• Leads to more high-quality and reliable products
Distribution
Human Resource

Production
Platform Approach to Production
• Ducati was moving towards a platform approach for its production
• The motorcycle was divided into a relatively small number of components, which were broken up into sub-
components
• 1 key supplier was in charge of providing a component and managing the suppliers of the sub-components
Social capital assets Relationships and trust with key suppliers


Production
Platform Approach to Production
Product
R&D • Ability to increase efficiency of production
• Ability to reduce costs by outsourcing some work
• Ability to improve on quality and reliability of its products as each
sub-component supplier will be more specialized in their
production work
Distribution DIFFERENTIATION
• Leads to more high-quality products
LOW COST
Human Resource
• Cost-savings from outsourcing to many suppliers

Production
Standardisation of Products
• In 1999, Ducati produced all of its models using only 2 crank cases and 3 cylinder heads
• In 2001, Ducati was considered as one of the most efficient manufacturers in the industry
Number of motorcycles produced per worker increased from 76 in 1997 to 87 in 2000
Physical assets Equipment to piece components of motorcycle together
after producing each component separately
Technological assets Technology needed to divide motorcycle into components
and subsequently piece them together
Human and intellectual assets Knowledge and research needed to decide on the most
efficient way to break down the motorcycle into
components, across the range of motorcycle models

Production
Standardisation of Products
Product
R&D • Ability to standardize its products for increased productivity and
cost-savings
LOW COST
• Cost-savings from using standard parts for its production
Number of Components per Models Produced
Distribution 1.000
0.800
Ducati
0.600
HD
0.400
BMW
Human Resource 0.200
Honda
0.000
Crank Cases Cylinder Heads Engines
From Exhibit 13

Production
Collaboration with other firms in the Emilian Industrial District
• The Emilian Industrial district was known as the Engine Technology District
• It comprised of a number of small clusters of firms, each specializing in particular classes of mechanical products
• There were about 2400 firms in the motorcycle industry in the proximity of Bologna
• Ducati collaborated with some firms such as Ferrari and Maserati for joint activities such as R&D, purchasing,
suppliers’ quality control and employee training
Physical assets Prime location to collaborate with other similar firms
Social capital assets Network of relationships with firms in the same industry

Production
Collaboration with other firms in the Emilian Industrial District
Product
R&D • Ability to tap on pooled resources to increase quality of products
and production
DIFFERENTIATION
• Higher quality as a result of shared technology and resources
Distribution
Human Resource

Distribution
Established Sales and Marketing Subsidiaries in Strategic Markets
• The first phase of Ducati’s distribution strategy
• Previously, they had external independent distributors who were responsible for managing their network of retail
dealers
• Establishing subsidiaries allows Ducati to have more direct control of distribution and marketing in these strategic
markets (Japan, France, Germany, UK, Holland)
• Hence this allows them to have an oversight and control of the strategic markets which allows them to better serve
its customers.
• Able to gain valuable market insights
Physical assets Subsidiary offices in many strategic markets
Organisational assets The system whereby it controls its subsidiaries such as quality control, reporting systems
Social capital assets Closer relationship with its distributors and dealers since it has subsidiaries based overseas
who can communicate with them better

Distribution
Established Sales and Marketing Subsidiaries in Strategic Markets
Product
R&D • Able to control the final stage of sale to their customers to a greater
extent than before, and hence control quality of services and marketing
DIFFERENTIATION
• Leads to better quality of service and product
Distribution
Human Resource

Distribution
Hiring a Competent Network of Dealers
• The second phase of Ducati’s distribution strategy
• Ducati did not aim to increase in geographical reach, but rather to improve the average quality of the dealers, unlike
most of its competitors
• Competent sales forces, good technical assistance, and an adequate physical space where Ducati motorcycles and
apparel could be displayed
Human assets High quality of service provided by its dealers
Social capital assets Better relationship with its customers as a result of
better front-line service (brand loyalty)

Distribution
Product
R&D
• Ability to provide its customers with a pleasant experience
DIFFERENTIATION
• Leads to better quality service and brand image
Distribution
Human Resource

Distribution
Setting up Ducati Stores
Distribution of Ducati Stores Worldwide
• The third phase of Ducati’s distribution strategy
2%2%
• Set up in select markets and cities around the world 6%
• Offered superior technical and service support 10%

UK
• Provides a unique retail environment Japan
 A ‘History Wall’ displayed images of Ducati’s racing heritage
France
 An ‘Engineering Wall’ showed a large scale engineering drawing of the 916, Ducati’s symbol 10%
Germany
 Merchandised areas dedicated to ‘Ducati Performance’ accessories and apparel
USA
• Emphasizing the distinctive traits of Ducati’s brand
Italy
• These Ducati stores could educate and build on to consumers’ positive 70%
perception of the brand
From Exhibit 14
Physical assets Large number of Ducati stores
Reputational assets High brand recognition and brand history that Ducati
could tap on to establish its stores
Distribution
Product
CAPABILITIES
Development and
R&D • Ability to educate its consumers and build its brand innovatively
DIFFERENTIATION
• Leads to better brand image
Distribution
Human Resource

Marketing
Ducati’s new Branding Strategy
• The “World of Ducati” branding strategy which aims to create intangible Repeat Purchase Intentions
attributes to boost the firm’s brand image
80
• 27% of interviewees indicated that the most important purchase factor
was Ducati’s presence in the Superbike competitions, followed by 60
magazine tests 40
• The orientation of the brand and its link to competition (together with 20
Ducati’s Italian style) ranked as the most prominent features of the brand
0
• Brand loyalty of Ducati’s customers improved since 1996
BMW HD Ducati Honda Kawasaki
• Revenues from sponsors and the sale of race engines and bikes increased
1995 2000
greatly from zero revenue in 1996 to 7.9 million euros in 2000
From Exhibit 16
Intellectual and Minoli and the management/marketing team who had
human assets headed the “World of Ducati” strategy
Reputational assets Ducati’s rich history and high customer loyalty

Marketing
Ducati’s new branding strategy
Product
CAPABILITIES
Development and
R&D • Ability to tap on its rich history to strengthen Ducati’s brand image
innovatively
DIFFERENTIATION
• Leads to a positive and unique brand image
Distribution % of Total Revenues

20
15
10
5
Human Resource
0
Fixed Sales Costs
Ducati 2000 Ducati 1996

Summary
Ducati’s differentiation and cost drivers
1. Innovative and high-quality product development capabilities
2. Effective Marketing/Branding
3. Effective Cost Management

Value Chain Analysis: Summary
• Internal design division Product Development • Aggressive outsourcing policy

• Open structure and Research & • Supply chain management
• Close coordination with marketing Development • Platform approach
and racing departments • Collaboration with other firms in
• Skilled engineering team the Emilian Industrial district
Innovative and high-

Marketing quality product Production
development
capabilities
Distribution

Product Development
and Research &
Development
Marketing Effective Production

Marketing/Branding
• Ducati’s new branding strategy • Established sales and marketing

(World of Ducati) subsidiaries in strategic markets
• Hiring a competent network of
Distribution dealers
• Setting up Ducati Stores

• Aggressive outsourcing policy
• Platform approach
Product Development
and Research & • Standardization of products
Development • Collaboration with other firms in
the Emilian Industrial district
Marketing Effective Cost Production

Management
Distribution

QUESTION 3
Critically assess the extent to which Ducati has core competencies.
47
Competency #1: Innovative and high-quality product development capabilities
4 criteria test for Sustainable Competitive Advantage

Price Premium vs Comparable Products
Valuable Yes • Possessed R&D head start advantage over
Year Hyper- Super- Sport- Naked
competitors, such as Harley-Davidson, BMW,
Sport Sport Touring
Honda etc, by “having a group of top-notch
engineers, both in R&D and in the racing 1997 31.02% 8.03% 29.97% 13.27%
divisions” 2001 31.4% 7.2% 20.4% 13.03%
• Skilled engineers and competent design teams
gave Ducati an advantage in terms of From Exhibit 11
technological advancements compared to *Note: Price Premium remains relatively

competitors unchanged – Not a meaningful indicator
• Outsourcing and strict selection of high-quality in this case.
suppliers also resulted in Ducati’s quality and
reliability rise Reason: Ducati’s niche – Sport/Racing.
• Creates differentiation value Goal is to grow (market size, not profits) ->
Thus, they keep price comparable &
enlarge market share

Rare Yes • Scope: Development capabilities in racing bike World Superbike Championship
• Ducati’s R&D capabilities stem from having a strong Winners (1990-2000)
human capital team that is “the most expert and skilled 10
in the industry”. It is rare to find equally strong teams in 9
all its competitors 8
• Ducati’s competitors such as Honda, Kawasaki and 7

6
Yamaha also participate in racing competitions.
5
However, Ducati has largely dominated the World 4
Superbike Championship from 1990 to 2000 which 3
indicates that Ducati’s R&D capabilities is superior to 2
that of its competitors 1
• Engaging high-quality suppliers involves intangible 0
Ducati Kawasaki Honda
resources such as having relationships with a network of
suppliers which requires years to develop. Ducati has Winner: Rider Winner: Manufacturer
From Exhibit 6
had a long history in the industry, hence it is able to tap
on this rare resource.

Costly to Yes • Difficult for competitors to imitate a top-notch R&D team

imitate • Multi-dimensional: Its R&D capabilities was formed by a mixture of many factors (strong team,
research activities, networks with other firms), hence it may be difficult to establish an exact
same replica in a competing firm
• May be difficult to imitate the “strong engineering culture with a passion for the races” such as
in Ducati
• Social complexity: Relationships with suppliers have to be built over time

Non- Yes • Purchase of technology such as patents

substitutable • However, compared to having in-house R&D resources such as facilities and human capital, it
may be less effective as technology may be generic and not specially catered to the company
• The use of Japanese manufacturing techniques such as Just-In-Time and Materials-as-Needed
production
• These strategies will not be able to solve problems effectively when used independently
• At Triumph, management used tactics to encourage commitment and participation of all
employees in solving problems and coming up with ideas on improving processes
• Employees without the same level of expertise as an R&D team may not be able to come up
with strategies that provide the same value
• Insourcing instead of outsourcing (maintaining control of production)
• May be effective for companies who have the expertise to do so
• However, for others, it is unlikely to be cost-efficient

Competency #2: Effective Marketing and Branding Competency
Valuable Yes • Ducati employed unique marketing measures

• Co-marketing initiatives with different major international brands such as DKNY.
• Resulted in Ducati’s strong brand value, which translated to increased market
share and sales
• Created differentiation value
Rare Yes • Ducati’s success in the World Superbike Championship (Exhibit 6) was difficult
for competitors to imitate
• Ducati’s Italian heritage also made its branding unique
• Ducati stores, racing, advertising, museum, Ducati owners clubs and events
• Less evident in Ducati’s direct competitors since they focused more on
technological innovation, reliability, and price.
• Japanese mass-producers (e.g. Honda and Yamaha) tended to maximise “reach”
and penetration
• Marketing and Branding Competency of Ducati was similar to Harley-Davidson
but different from other manufacturers

Competency #2: Effective Marketing and Branding Competency
Costly to Imitate Yes • Ducati’s strong branding stems from its rich history
• Ducati’s strong dominance in racing competition (unique historical conditions)
• Passion that Ducati’s employees have for the business/motorcycle market
• Cannot be imitated easily
Non-substitutable Yes • There are numerous ways to build a firm’s branding, but it is difficult to replicate
the brand loyalty of Ducati, cultivated by the unique culture, history and
branding associated with the Ducati brand
• In major European markets, Ducati’s brand loyalty ranked among the highest in
the motorcycle industry, with about 55% of its small customer base expressing
repeat purchase intentions.
*Note: Define the scope: Marketing in racing & sport ->

Racing, Italian heritage that is to their advantage.

Competency #3: Effective Cost Management
Valuable Yes • Ducati was considered one of the most efficient manufacturers in the industry
• This creates low cost value for Ducati
• Rigorous quality control system employed by Ducati ensured that it’s
motorcycles was of a high quality
• Ducati’s machines had a longer lifespan than typical competitors machines.
(Engine 10 years, Frame 5 years)
Rare Yes • Ducati ability to maintain a low cost structure
• COGS as a % of total revenue of Ducati was 59% as compared to that of Harley-
Davidson at 65.9%
• Ducati was better equipped in planning and controlling the budget of their
business as compared to that of its competitors.

Competency #3: Effective Cost Management
Costly to Imitate Yes • Socially Complex: Ducati’s network of suppliers and its relationship with
suppliers was difficult for competitors to replicate.
• “Ducati typically identified at least two sources of supply for each component
and switched to the alternative supplier as the need roses, leading to the
increase of quality and reliability of Ducati’s”
Non-substitutable No • Honda and Yamaha agreed to jointly transport their motorcycles and spare parts
with the hope to save 30% on their delivery costs, Kawasaki and Suzuki planned
to enter a similar alliance
• Leads to cost reduction
• Leading motorcycle firms implemented Japanese manufacturing techniques,
including Just-in-Time and Materials as Needed production in order to respond
more readily to market fluctuations, optimize production levels, and improve
quality.

Core Rigidity
Core Rigidity: No, as Ducati is well equipped to Number of New Registrations in Ducati Relevant
develop new resources and capabilities to align with Market
the changing external environment 600
Thousands
• Exhibit 2 shows that the worldwide market for Ducati’s
relevant market has been steadily growing from 1996 to 500
2000
• There is increasing demand for products in Ducati’s 400
niche
• Hence in the aspect of consumer’s preferences, there 300
should not be much of a need to change Ducati’s core
competencies 200
• Low Inertia: If changed is needed within Ducati in order
to align to the external environment, it’s human capital 100
resource is well equipped, proven with a strong
capability to adapt to the changing environment under 0
Minoli’s leadership 1996 1997 1998 1999 2000
From Exhibit 2

Conclusion
Innovative and High Quality
Effective Marketing and
Competencies Product Development Effective Cost Management
Branding Competency
Capabilities
Valuable Yes Yes Yes
Rare Yes Yes Yes
Costly to Imitate Yes Yes Yes
Non-substitutable Yes Yes No
Core Competency ✔ ✔
• From the above table, we conclude that the Core Competencies of Ducati are:
1. Innovative and High Quality Product Development Capabilities
2. Effective Marketing and Branding Competency
• Hence, as a result of its core competencies, Ducati will be able to sustain competitive advantage over its competitors
by generating above average returns in the long run.
• Ducati’s strong branding and technical superiority of its products differentiates it from its competitors while its cost
management capability allows its product’s pricing to remain competitive.

Conclusion
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Any Question(s)?


Group 5 Ducati Week 4

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Chang Jia Xun | Loh Wan Jing Alicia| Lynette Ee Su Min |Ng Yew Yeong 1

MOTORCYCLE MANUFACTURER HEADQUARTERED IN BOLOGNA, ITALY

Ducati’s Value Value Chain Core Core Core

1926 1960s to 1970s 1985 1996

1950s 1980s Mid-1990s

Ducati’s Value Value Chain Core Core Core

Breakdown of Ducati’s Motorcycle Sales in 2000

SPORT BIKES 10%

Ducati’s Value Value Chain Core Core Core

Market Share of Sport Niche Competitors in 2000

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Distribution Museum &

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

• Reduced the “time to market” for new product launches 36

Human assets Competency of internal design team

Social capital Close coordination and fast communication 15

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Physical assets Its prime location in Bologna gave it access to external

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Social capital assets Relationship between the different departments

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Organizational assets Culture in the firm 0.6

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Human capital assets Experience and knowledge in sourcing for suppliers,

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Human capital assets Experience and knowledge in sourcing for suppliers,

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

• Offered superior technical and service support 10%

Ducati’s Value Value Chain Core Core Core

Ducati’s Value Value Chain Core Core Core

Distribution % of Total Revenues

Ducati’s Value Value Chain Core Core Core

1. Innovative and high-quality product development capabilities

3. Effective Cost Management

Ducati’s Value Value Chain Core Core Core

• Internal design division Product Development • Aggressive outsourcing policy

Innovative and high-

Ducati’s Value Value Chain Core Core Core

Marketing Effective Production