Business Brief of Ducati

Brief Problem: Should Ducati target US cruise market and penetrate in Harley Davidson market?

In my opinion, Ducati should not choose to penetrate the cruiser market instead they should focus
on the current market segment.

In my opinion, Ducati should not enter into cruiser market. Though entering the cruiser market is
a possible option but there is no need for Ducati to enter this new market based on current
performance. From previous few years, Ducati has seen significant growth but that growth was
because of its strong brand name and culture that was associated with a sports bike. So by entering
a new market, they could lose this status which relatively young biker associate itself with Ducati.

It is also true that entering the new market will expand their market segment but the counter
argument for this is that as it is believed that in America you just don’t buy a bike of a brand but
you also buy a lifestyle which that is associated with that brand. As currently Harley Davidson is
dominating the cruiser market and most people in middle age prefer to buy Harley while people
with younger age prefer to buy Ducati. So once Ducati also focuses on cruiser market they can
lose its younger sports bike loyal customers.

For entering the cruiser market Ducati would need a heavy capital investment because its product
must be differentiated from its competitors like it has differentiated itself in sports bike segment.
This cruiser must have a legacy of Ducati’s brand, or we can say that Ducati must have its own
way of a cruiser like BMW, Harley-Davidson have for that they would have to position itself in
people mind which would not be that much easy. That would need a lot of investment on its
marketing campaign and would need a lot of attention and by giving that much attention to a new
market in such uncertain economic downturn as itself a great risk and again they may lose focus
on the existing segment and therefore will lose the value of its brand.

As currently Harley is dominating the cruiser market in the USA and has a very loyal customer
base so far Ducati it would be very hard to compete with them and even if they did penetrate their
market then Harley Davidson could retaliate by attacking sports bike segment of Ducati which
again is the area of concern for Ducati.

Also as we know in turning around Ducati its enthusiastic engineers of sports bikes had a great
rule but currently Ducati has not much experience of producing cruiser which in turn would be a
lot time-consuming.

So Ducati should focus and invest more in the current segment and should be able to sustain its
strategy and strengthen more so no one can ever penetrate into the sports segment. This is the ideal
option because this reduces the risk and helps Ducati to support the existing customers and
therefore increase their loyalty even more which could yield more profit than entering to cruiser
market.