Ducati Case

2. What are the relevant value drivers and cost drivers in this industry? What generic strategy does Ducati pursue?

Value Drivers:

There are many value drivers that are relevant in this industry. These include products, Ducati corse racing, accessories and apparel, marketing, and sales and distribution. All of these give something unique to Ducati, adding value.

Included in the products is a desmodromic valve control system, which allows the engine to “breathe” at high speeds, thereby increasing engine performance. It allows Ducati’s two-cylinder engine to perform as competitor’s four-cylinder engines. Ducati was the only bike on the market that used the Desmo System. Ducati products also have an L-twin design, providing improved aerodynamics and lighter weight. Ducati’s frames are built around the Formula One inspired tubular trestle. This gives the bike greater rigidity, handling power, enhanced speed, and offers a more compact design. Ducati products also have a lower seat and a lighter weight making it more attractive to woman. Lastly, Ducati’s engine has a low-hum sound, and each product is created with Ducati’s unique Italian styling.

Ducati corse racing is another important value driver. Participation in professional motorcycle racing increases the visibility of Ducati motorcycles through media coverage of the races and serves as a practical demonstration of the high-performance characteristics of Ducati motorcycles. The racing team was managed under a different name Ducati Corse SRL (spun off in 2005).

Accessories, spare parts, and apparel are more components of Ducati that add value. Ducati sold approximately $29 million of accessories and spare parts in 2005. Lucio Attina said, “Accessories are twice as profitable as motorcycles on the basis of margin. As of 2006, Ducati collaborated with other well-known brands like Oakley, Dainese and Suomy to produce Ducati-branded suits, jackets, gloves, boots, helmets, and other gear improving their...