Ducati

1. Ducati has been using differentiation strategy as well as market share extending strategy. After the 1996 acquisition, Ducati continuously upgraded its existing motorcycles through design and technical innovations, which build up its main products differentiation. At the meantime, Ducati also introduced new models and tried to expand the market share and increase its sales and profitability. According to the illustration of Ducati's global brand strategy (Exhibit 7), Ducati wanted to appeal not only to "extreme" riders, but also to a broader spectrum of customers.

2. Following its 1996 liquidity crisis, a turnaround program has been initiated. Firstly, Ducati increased working capital. The lack of working capital funding resulted in significant production delays. By doing so, production level was raised. Secondly, a new, highly committed management team was installed, which was necessary to the following revolution. Thirdly, Ducati implemented an aggressive outsourcing policy. According to Exhibit 12, that reduced the fixed sales costs. Besides, Ducati increased its production efficiency by standardizing its products and reducing complexity. The number of motorcycles made per worker increased from 76 in 1997 to 87 in 2000. EBITDA also increased by 79.73% to 60.03 million from 1997 to 2000 (Exhibit 1). What's more, Ducati strengthened its corporate image by adopting strict selection and quality control procedures. Furthermore, Ducati introduced new models and new motorcycle-related products (such as accessories and apparel) to attract all types of customers (Exhibit 7), and then the market share was expanded from 3.9% in 1996 to 6.7% in 2000 (Exhibit 3). Finally, Ducati restructured its distribution system by establishing owned sales and marketing subsidiaries,