Virtual Organizations Case Study: Ducati

Following its 1996 liquidity crisis, Ducati, an Italian manufacturer of high-performance motorcycles, took several initiatives aiming at strengthening the company brand, enhancing its portfolio and increasing its sales and profitability. This case first presents the above initiatives and discusses how Ducati streamlined its production process and rationalised its distribution network. It then focuses on the company's e-business strategy and the capabilities offered by Ducati Internet web site. The key starting point of Ducati ecommerce activities took place on January 1st, 2000 when the limited edition of its MH900e motorcycle was exclusively sold through the Internet. It was the first motorcycle ever sold this way and the first year production of the MH900e was sold out after just 31 minutes, making Ducati one of Italy's largest e-tailers. The case describes the above pioneering e-business initiative and presents the way the company created the physical and the virtual " World of Ducati " (which contains motorcycles and motorcycle-related products and services). It concludes by highlighting future challenges that Ducati faces, mainly its attempt to solve the online/offline channel conflict and to build the first motorcycle Internet portal. The latter aims at offering content, context, virtual communities, and commerce (i.e. business-to-consumer, business-to-business, and consumer-to-consumer transactions). Founded in Bologna (Italy) in 1926, Ducati is a leading manufacturer of high performance motorcycles. Since the 1950s, its motorcycles have dominated the World Superbike Championship and compete in the sport sub-segment of the road market segment with engine capacities of over 500cc (cc stands for cubic centimetre, a measurement for the motor cylinder capacity). The motorcycle market is divided into four segments: the motor scooter market, the off-road market, the road market with engine capacities of less than 500cc, and the road market with engine capacities of over 500cc. The road market segment with engine capacities of over 500cc includes four sub-segments: sport, touring, dual and cruiser. Motorcycles in the sport sub-segment are built for, or inspired by racing. Those in the touring and dual sub-segments are designed for comfortable, long-distance travel and for both on-road and off-road riding. The cruiser sub-segment comprises heavy motorcycles with classic American design. The four Ducati model lines differ in design, technical features and target customers. The flagship product, Superbike, has gained much ground over the last 3 years. Besides motorcycles, Ducati sells parts, accessories and apparel in 40 countries worldwide, with a focus on Western Europe and North America. In …