. Following its 1996 liquidity crisis, Ducati, an Italian manufacturer of high-performance motorcycles, took several initiatives, under the guidance and leadership of Federico Minoli whose main aim was to strengthen the company’s brand by turning Ducati into a global brand that appealed not only to “extreme” customers but also to a broader spectrum of customers, enhance its portfolio by venturing into several new market segments and increase and expand its sales and profitability. Ducati faced severe competition from the Japanese manufacturers such as BMW, KTM, Honda, Suzuki, Kawasaki and Yamaha in all the three major segments. Thus, in order to broaden its spectrum of revenue sources, Ducati, in 1997, entered into the business of accessories and apparels by acquiring a stake in Gio.ca.Moto. a company that was already producing a line of accessories for Ducati, this contributed to 16.6% of its total revenues in the year 2000. Ducati’s strategic decision of outsourcing it’s production and logistic spare parts translated in greater availability of parts and improved distribution channels, while the decision of revising its pricing policy led to a phenomenal increase in the contribution of spare parts to total revenues. As of 2001, the company’s outsourcing has grown to approximately 87% with the company planning to take it even higher to almost 90%. Due to the standardization of its products, Ducati was touted as one of the most efficient manufacturers in the industry, despite its relatively low volumes in 2001 as shown in the table below:

The apparel and accessories business had grown consistently following the entry of Ducati in this line of business, and thus had only one strong contender – Harley Davidson. In 2001, the company launched two basic models – 996 and 748, each in 3 different versions. This contributed to almost 43% of the company’s total revenues, the key competitors being targeted under this segment were – Yamaha, Suzuki, and Honda.&nbsp. &nbsp.&nbsp.