Ducati

Ducati

Question # 1

Ducati is an 80 years old company which was producing electronic radio equipments since many years. Since last 60 years, it started producing motorcycles and became a leading company of that market. Minoli, who is the CEO of Ducati, became the CEO just before ten years. When he joined the company in 1996, then that was the time when Ducati was near to bankrupt. After joining the Ducati, Minoli turned around the company by creating the “World of Ducati”. He created that a world that concerned with the superior type of engineering, slick design, Italian heritage and an undeniable attraction for racing lovers. After becoming Minoli a part of the Ducati, the revenues started increased from 95 million to 380 million in the same era. That was the period of 1996 to 2000 when the revenues increased to a large extent. Due to this EBITDA got better from a loss to 60 million in that period. That became a reason of stalled results of the business in the five continuous years. Revenues decreased 2.3 % on an annual growth rate with compounding interest rates from 2000 to 2005. EBITDA decreased to -273,000 at the end of 2005. By the end of 2005, the shareholder of Texas Pacific Group signed an agreement to sell its 30% shares in Ducati in order to invest the Industrial Holdings SA. An association of many investors came up with the understanding that there would surely be a capital increase of about 80 million by the investments in Ducati. Minoli was aware of the fact that the new investors will definitely demand some specific changes to minimize the costs and getting back the company's previous growth. For assuring the shareholders for the capital increase in their shares, he would need to communicate a plan that could address the concerns of finance as well as the strategic considerations in the long-run immediately.

Question # 2

Minoli should install a new top-tier team of management. He should leave a large unstructured company to enhance creativity and team work instead of doing efforts to put strict and rigid organizational structure. He must think about the three notch attributes which he always believed like a differentiated and unique product, a team of high-skilled mechanical engineers, and a high brand loyalty by customers. The company had already a historical advantage of performance, speed, and innovation. Every engineer it was having was very ridiculous and was always known as fanatic purists in terms of their works also. This was a great advantage to this company. Minoli can be benefited from these things by planning properly. He should also implement two types of settled goals. That is double-digit revenue growth and a ratio comparable in terms of EBITDA of 20 %. Minoli must send a substantially change signals to the company by that an ideological change could take place. At the very first, Minoli with his management team has to make decisions about where should they start to focus on company's ...