Textbook Case Study: Case 9.1 Opening Case: Ducati Redesigns Its Operations

Ducati updated their business systems and the consumer’s ability to interact with them. In this module, you have learned about the importance of business systems and e-commerce to an organization. In this case study, you will focus on improvements and benefits made by Ducati.

Write a 2-3 page paper not including the cover page or reference pages, that answers the questions from the textbook case study 9.1 – Ducati Redesigns Its Operations. You must cite at least five independent scholarly sources to support your position, using appropriate APA format.

Case 9.1 Opening Case
Ducati Redesigns Its Operations
Company Overview
Photo illustration of Ducati showrooms.
Ducati Motor Holding manufactures motorcycles known worldwide for their precision engineering, lightning speed, and sleek design and for customers who are passionate about their motorcycles (Table 9.1). Six models make up the product lines, with prices starting at $15,000 to the $90,000 Superleggera Superbike, which produces up to 200 HP at the crankshaft. Ducati is owned by Audi through its Italian subsidiary Lamborghini. Its 2013 net sales were $518 million.

TABLE 9.1
Opening Case Overview

Company Ducatiusa.com and Ducati.com
Founded in 1926, the company has 1168 employees.
Ducati’s main factory site and headquarters are located in Bologna, Italy, with an additional assembly factory in Thailand.
Industry Racing-inspired motorcycles characterized by “Desmodromic” performance engines and innovative design and technology.
Product lines Four models: Diavel, Hypermotard, Monster, Superbike, and SuperSportter.
Digital technology New dealer communication application for mobile devices called DCS or Ducati Communication System. The interface lets dealers easily find, send, and receive all the information they need to place orders and track them through production and delivery. The high-performance global communication system serves more than 5,500 users worldwide in seven languages.
Business challenges Because of competition and tough economic conditions worldwide, motorcycle dealerships had to offer customers better value and after-sales services.
Awards
In March 2014, Ducati received five awards at the annual Motorrad des Jahres (Motorcycle of the Year) event in Stuttgart, Germany. Ducati’s Multistrada and Diavel were awarded Motorcycle of the Year in the Allrounder and Cruiser categories, respectively (Figure 9.2). Ducati’s models are benchmarks in innovative design and technology.

Photo illustration of Ducati’s Multistrada and Diavel bikes.
FIGURE 9.2 Ducati’s Multistrada and Diavel were awarded Motorcycle of the Year in 2014 in their class for their innovative design and technology.

Product Lines
In addition to six motorcycle brands, the company sells parts, apparel, accessories, and other items to create the Ducati experience. Dealers need to be familiar with thousands of products and customization options for their customers.

Business Challenges
Companies worldwide were faced with tougher competition and economic conditions after the financial meltdown in 2008. And as global manufacturers, geography was a marketing challenge.

Internally, its sales staff struggled with conflicting or outdated data on product inventory, availability, and ordering time schedules. The source of the problem was multiple communication systems and data silos that were not coordinated.

To resolve these challenges and grow the business, Ducati focused on the following:

Improving the sales process
Engaging the customer in the design of its motorcycles
Decreasing the cost of operations
The plan was to redesign dealer operations, business processes, and communication tools to align them with leading industry practices.

Partnership with Accenture and Apple
Ducati selected Accenture to help redesign operations and processes and to roll out a new integrated communication application for its dealers worldwide. Ducati equipped its sales network with iPads and developed a custom in-house app called DCS or Ducati Communication System. The DCS app gives dealers a single point of access to Ducati’s back-end systems. The DCS is an SAP-based interface used by dealers to easily find, send, and receive data necessary to place orders through a point-of-sale (POS) device and then to track orders through the production and delivery processes. (SAP is a global software company that specializes in Enterprise Resource Program (ERP) applications.)

Authorized dealers receive updates directly through the Apple App Store. They also have access to a configurator app on their iPads to configure a customer’s dream motorcycle. An e-mail detailing the customized motorcycle and accessories is then sent to the customer. Dealers communicate in real time with colleagues and complete the sale without delay.

Intuitive User Experience
The familiar user experience was designed to be the same for desktop computers, iPads, and iPhones.

Cristiano Silei, vice president of Global Sales at Ducati, said: “It was clear from the start that iPad was the right device. It’s the simplicity, the immediate usability. Everyone understands how it works in just a few minutes.”

Visiting a dealership is a very emotional experience for customers. Dealers want to make the experience unforgettable. According to Silei, the iPad helps gives the future Ducati owner a richer experience.

In addition to providing real-time sales support, the DCS app on iPad acts as a training interface to keep dealers updated on Ducati’s evolving product line. A change management program helped dealers transition smoothly from the old solution to DCS. DCS was quickly embraced by Ducati dealers, whose positive feedback included comments such as “It’s a game changer” and “a great time saver.”

Performance Improvements
Ducati’s high-performance global DCS was deployed in 88 countries across four continents. DCS serves more than 5,500 users worldwide in seven languages. By leveraging dealer communication, Ducati is able to capture and consolidate local and global sales activity, spare parts, warranty, and service activity. As a result:

Ducati is able to capture and consolidate local and global sales activity, spare parts, warranty, and service activity, improving the company’s ability to respond daily to changing consumer demand.
Dealers run all parts of their business and have a robust tool to execute their operational, growth, and customer objectives.
Dealers respond more quickly to customer demands and market conditions, making each dealership easier for customers to do business with.
Dealers are equipped with leading practices for their processes to help them better serve customers in a simple, streamlined manner.
The dealer system is one of the most innovative and effective user experiences in the industry. It is user-friendly and sleek and reinforces Ducati’s brand.

Questions
What pressured or motivated Ducati to implement new digital technology?
What costs could Ducati cut? What costs could it not cut? For example, could Ducati cut its R&D budget? Explain your answers.
Why did Ducati need to improve communications with dealers?
Explain the capabilities and benefits of the DCS.
Why was it important to implement a change management program?
What other factors contributed to the success of DCS? Explain their contributions.
Visit the Apple iPad store at apple.com/ipad and search for “Ducati.” Review the Ducati Communication System app. Explain how the DCS app gives the future Ducati owner a richer experience.
Sources: Compiled from Ducati websites (2014), LexisNexis company profiles (2014), Apple.com (2014), Accenture.com (2014).

Case: Ducati Redesigns Its Operations

Question One

The financial meltdown that occurred in 2008 had a significant impact on the supply networks, compelling organizations to explore different approaches that could enhance their performance in the business environment. Unable to reach and explore the market, Ducati partnered with Apple to develop an in-house communication system that would foster their interactions with their target audience. From this perspective, dealers would be engaged during the designing process where their opinion regarding a specific product would be sought.

Question Two

Even though Ducati is an established motorcycle brand, it cannot eliminate its advertising and marketing budget because of the need to inform existing consumers about the advancements made on the brand. In the same vein, the company cannot cut down costs on research and development because of the consistent need to achieve a competitive edge over other organizations (Barbagallo, Sequenzia, Cammarata, Oliveri, & Fatuzzo, 2018). From this perspective, increasing the budget on the two aspects will enable Ducati to develop innovative products that address the dynamic problems in the modern business environment. However, Ducati can reduce its production costs to respond to market demands.

Question Three

Improving communication with various stakeholders enhances the relationship between individuals because of their ability to understand the nature of the products and their impact on the overall experience of prospective customers in the corporate world. In this case, dealers are the link between Ducati and its target audience, a move that highlights their significant role in the supply chain (Noe, Hollenbeck, Gerhart, & Wright, 2017). Maintaining effective communication with dealers enabled Ducati to understand the issues affecting consumers when using their products. Besides, collecting feedback from customers became more manageable because of the improved relationship between Ducati and their dealers.

Question Four

By using the Ducati Communication System (DCS), dealers could access the corporation’s back-end platforms, where they could monitor their supplies and raise other issues regarding the company’s products. Besides, using the DCS made work more comfortable by enabling them to track orders through the production process where they could realize the status of their requested products (Jacobs, Yu, & Chavez, 2016). In the same vein, the Apple Store played a critical role in the dissemination of real-time updates concerning the state of different products, a move that enhanced the overall consumer process.

Question Five

Implementing change in the workplace is usually a complicated process because of its impact on the perspectives of employees. However, Ducati identified its dealers as the change agents, who would enable the corporation to realize its vision in the business environment. From this realization, the company was able to achieve its desired objectives that offered it a competitive edge over its competitors (Barata, Cunha, & Coyle, 2019). Understanding the market enables company managers to implement change in the workplace and realize positive results.

Question Six

Enhancing the customer experience of individuals builds the reputation of an organization in the business environment. In this case, Ducati realized an approach that could improve their performance at a time when organizations were experiencing different challenges in managing their supply chains (Lim, Tseng, Tan, & Bui, 2017). In this regard, the DCS offered an exclusive opportunity to dealers that allowed them to make informed decisions based on the changing market needs. Besides, the organization relied heavily on its dealers to penetrate different markets in the global market, making it easier to manage individual concerns.

Question Seven

The DCS is an elaborate communication system that promotes interactions between the organization and its consumers. When dealers can provide consumers with correct information, it becomes easier for them to target specific individuals who can make purchases among other customized products. Given the fact that future Ducati owners can customize their model bike, it equips the organization with a certain level of dominance in the business environment over other companies.

References

Barata, J., Cunha, P. R., & Coyle, S. (2019). Evolving manufacturing mobility in Industry 4.0: the case of process industries. Journal of Manufacturing Technology Management.

Barbagallo, R., Sequenzia, G., Cammarata, A., Oliveri, S. M., & Fatuzzo, G. (2018). Redesign and multibody simulation of a motorcycle rear suspension with eccentric mechanism. International Journal on Interactive Design and Manufacturing (IJIDeM), 12(2), 517-524.

Jacobs, M. A., Yu, W., & Chavez, R. (2016). The effect of internal communication and employee satisfaction on supply chain integration. International Journal of Production Economics, 171, 60-70.

Lim, M. K., Tseng, M. L., Tan, K. H., & Bui, T. D. (2017). Knowledge management in sustainable supply chain management: Improving performance through an interpretive structural modelling approach. Journal of cleaner production, 162, 806-816.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.