In 2001, the turnaround was largely complete. Minolis focus shifted to future growth. Minoli announced ambitious growth targets. What should Ducati do next? What strategic directions are available to Minoli in 2001? (financial perspective)

The Turnaround Program Ducati was founded on July 4, 1926, when Antonio Cavalieri Ducati and his three sons established one of the first Italian operations of radios and electrical components. In 1935 Ducati started production at a new factory in Borgo Panigale, just outside Bologna, at the heart of what later became the most extensive Italian mechanical district. Not until the post-war period did Ducatis first motorcycle appear. The bike, il Cucciolo, soon became a blockbuster. The 1950s witnessed the introduction of a series of increasingly sophisticated and powerful bikes, and particularly the appearance of Ducatis technical signature: the Desmodromic valve distribution system. This innovation, developed by the celebrated Ducati engineer Fabio Taglioni, was a sophisticated mechanical system allowing the engine to achieve more revolutions per minute and greater usable power. The Desmo system could still be found in 2001 on every motorcycle produced, representing the soul of all Ducatis: the deep intoxicating noise made by the desmo engine was music to the ears of purists. Thanks to their technical superiority, Ducati motorcycles rapidly achieved success in the international racing circuit. This success fueled growth throughout the sixties and the seventies, and the development of a strong reputation in the performance segment of the motorcycle industry. In 1972, a Ducati 750 Super Sport prototype won a dramatic victory in the Imola 200cc race. This motorcycle, which was configured with an L-shape desmo engine (two cylinders mounted at a 90- degree angle) and a Formula Uno-derived tubular trestle frame, inspired the production of a new line of larger displacement motorcycles that represented the stylistic and technical foundation of modern Ducatis.

Despite the innovativeness and technical excellence of its product lines, Ducatis fortunes declined sharply in the early 1980s, primarily due to the decision of its major shareholder at that time (IRI, a State holding company) to refocus the company on products other than motorcycles. In 1985 IRI decided to sell its motorcycle assets, and Cagiva, an Italian manufacturing conglomerate and producer of small displacement motorcycles, acquired Ducati. Under Cagiva, Ducati suddenly recovered its reputation for on and off-track excellence. An impressive series of victories in the World Superbike Championship where, for the first time, a Ducati two-cylinder engine defeated a four-cylinder engine produced by Japanese competitors, was paralleled by the introduction of a new series of stunningly beautiful street performance bikes. However, towards the mid nineties, liquidity problems at the larger Cagiva group deprived Ducati of the necessary working capital funding, which, in turn, delayed its payment terms to some key suppliers, resulting in significant production delays. Ducati was one step from going bankrupt when, in September 1996, a majority stake in the company was acquired by the Texas Pacific Group, an American private equity firm. Abel Halpern, HBS 93 and TPG partner was the driving force behind the deal. He had a passion for high-end, nichey businesses, and was driven by the firm belief that Ducati had enormous potential that was largely unexploited due to poor management. For this reason, he needed a first-class, highly committed management team, and TPG appointed Halperns friend and former colleague at Bain & Co., Federico Minoli, as CEO of Ducati.