Resource-Based Approach to Sustained Competitive Advantage
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RESOURCE-BASED APPROACH TO SUSTAINED COMPETITIVE ADVANTAGE
In late 1995 to 2000, Ducati enjoyed the legacy of success in sport bikes segment of motorcycle industry. Limited to this small scale, Ducati have achieved sustainable competitive advantages because of its organizational changes and marketing strategy.
Recognizing the crucial opportunities which identify Ducatis relevant market, the CEO – Minoli – makes a very important change in organizational operation. He focuses in technical superiority and rigorous quality control over products to create a great satisfaction to customer, in return, receiving higher premium for the brand. In sum, Ducati has acquired the “right” resources to seek a competitive advantage. Quality products and talent technical skills are main components accounting for value creation which can not only differentiate to incumbent rivals but also utilize the companys distinctive competencies for superior efficiency. As a result, the customers repeat purchase intention increases up to 65% (Exhibit 16) and the worldwide market share in sport segment for 7% which was just 4% in 1996 (Exhibit 1).
However, the most credible change Ducati has made to achieve competitive advantage and define its sustainability is marketing strategy. First, under new management team who passionate about Ducati, the firm differentiates the way it is operating. By bringing up the history of the company and Italian style, Ducati strengthen their culture of commitment for employees passionately pursuing their cause and mission. As result, the aggressive outsourcing policy grows highest in the industry; the streamline of production increases both in way and time. Therefore, the firm creates higher consumer surplus and lower the operational cost for greater value creation; consequently, empower its competitive advantage. Second, through emphasizing quality control over suppliers, Ducati depress the suppliers power; at the same time, increase its quality and reliability. Third, under new distribution of re-organizing the network of dealers, competent sales forces, and creation of a chain of “Ducati Stores”, Ducati implements the open structure of marketing in order to extend customers network, and to sustain the profitable growth. Other activities including museums, “The World of Ducati”, Ducati.com are not only serving for the same purpose but also satisfying customers concerns and responsiveness. Overall, exploiting these marketing strategies, Ducati gain access to other complementary strategies, and use this integration to create corporate capabilities that leverage a sustainable competitive advantage.
In summary, among sport bikes segment of the motorcycle industry, through employing its key success factors (good products, top-notch engineers, and strong brand loyalty), Ducati efficiently implement