Internal Customer Philosophy & Involvement of Employees in serving the external customer better Companies chosen are: South-West

Airlines, Toyota & Ducati A high level of internal customer service offers a morale boost for an organization. When employees in one department take care of the needs of an employee or employees from another, teamwork and mutual cooperation are enhanced. This ultimately benefits external customers who are taken care of by more satisfied employees. By: Abhishek Mishra, Shezad Trunkwala, Nitish Jaiswal, Shashikant Jajal 14-Oct-11

Importance of Internal customers While companies focus thousands of dollars on external customer service in hopes of wooing and retaining customers, little attention is being paid to the effect poor internal customer service has on customer satisfaction. It all starts within your organization! Sooner or later the ripple effect reaches your customers. To really walk your service talk, make sure your commitment to internal customer service matches your company's external focus on customer care. When we think of customer service we think of staff serving customers over a counter or over the phone. But customer service occurs within your organization as well. How well is your staff serving its internal customers: other departments, its management, vendors and consultants? Believe it or not, it all counts. Internal customer service refers to service directed to others within your organization. It refers to your level of responsiveness, quality, communication, teamwork and morale. We define Internal Customer Service as effectively serving other departments within your organization. How well are you providing other departments with service, products or information to help them do their jobs? How well are you listening to and understanding their concerns? How well are you solving problems for each other to help your organization succeed? Good internal customer service starts with good morale within your group. Are your people happy? Do they feel good about themselves and their contributions to the goals of the department and to the company at large? They should, and effort should be made to help them do so. Happy employees are productive, and customers take note. Happy employees are also better team players. Will you fly the airline whose employees are striking with management, or the airline whose employees are management? Employees invested in employee stock purchasing plans with matching contributions see themselves as much more a part of the company. Thus, as the company goes, so do they go. Many organizational charts employ an inverted pyramid with customers at top. Some companies instead put their employees at the top. In many senses, the employees are management's customers. Corporate values that emphasize treating employees well translate to good customer care too. Does your organization value its people? Invariably, companies that care about their people can better ask their people to care about their customers.

2|P ag e

This model represents the direction of service in champion organizations that provides for Champion Customer Service of the external customers that generate the revenue necessary to sustain and grow a successful organization. 1. It begins with a commitment to internal customer service whereby organization leaders create an environment in which internal service between employees is a priority. 2. Happy employees serve customers happily and happy customers buy and return and refer others. 3. This, in turn, makes for profitable, happy owners/shareholders, and 4. Resources are reinvested back into the organization to continue to reinforce the model.

3|P ag e

Southwest airlines strategy of internal customer service One of the strategies is walk the Walk. That means that you don't say one thing and do something else. You are genuine and what you see is what you get. One of the role-models in this strategy is Herb Kelleher of Southwest Airlines. If you've read his Shepard Letter or any of his past books, you know there has always been an emphasis on internal service. The Employee Golden Rule, as he calls it, is to treat employees the way you want the customer treated - maybe even better. Herb Kelleher and Southwest are model examples of that rule in action. From the very beginning, Kelleher believed in an employee-first approach which, at the time, was considered an extremely controversial first principle as management philosophies go. But Kelleher really meant it, and he insisted on it for sound strategic reasons. When you build a company around the idea of taking care of employees, taking care of customers becomes easier for everyone. As Kelleher himself put it: Do internal customers really want what employers think they want? As a reminder, the internal customer is anyone within our own organization who is dependent on us for anything. Taking care of this internal customer allows them to do their job, take care of another internal customer or take care of the outside customer. Much of what is written and taught about regular outside customer service works for internal service as well. One of my favorite areas on which to lecture is on understanding the customer. While I have written about this in an earlier article, it bears repeating. It is really a simple concept. Sometimes we think we know what our customers want, but they really want something else. In other words, we make assumptions. In order not to make mistakes, we need to get inside our customers heads and give them what they want versus what we think they want. The easiest way to do this is to ask questions. Okay, enough review. How does this apply to the internal customer? When was the last time you asked your employees if they were happy with you? Or, when was the last time you showed your employees sincere appreciation? What is all of this leading to? Some very important information. Apparently, some surveys are proving that managers and supervisors are not in sync with what their employees want.

4|P ag e

Robert Half International conducted a survey and found out the top reasons employees leave to go work somewhere else. When executives, managers and supervisors were asked what they thought, their number one answer was money. They thought money was the motivator to cause someone to "jump ship." When the employees who had left were surveyed, the number one reason they left to work somewhere else was lack of recognition and appreciation. Another survey conducted by Challenger Outplacement Council, written up in Human Resource Update, found that the most important employee motivators are: 1. Recognition/appreciation 2. Independence 3. Contribution to the company 4. Salary Another survey put together by Glenn Tobe & Associates asked employees and their supervisors what were their top motivators. The employees responses were a bit different than the supervisors. Notice what employees thought was most important versus what supervisors thought was least important. Employees wanted: 1. Appreciation 2. Feeling "in" on things 3. Understanding attitude 4. Job security 5. Good wages 6. Interesting work 7. Promotion opportunities 8. Loyalty from management

Supervisors thought they wanted: 1. Good wages 2. Job security 3. Promotion opportunities 4. Good working conditions
5|P ag e

5. Interesting work 6. Loyalty from management 7. Tactful discipline 8. Appreciation Let's look at other areas, such as employee perks. One of my clients took an area of his building and created a workout center for employees. He spent a large amount of money to put together a facility that was the best for the money based on the space that he had. He thought employees would go crazy over it. He was dead wrong! Yes, a few employees took advantage of it, but the facility was seldom used. All he had to do was ask the employees if they would use it. He eventually found out. Consider holding a focus group, not for customers, but for employees. Make it easy for your employees to give you feedback on what their likes and dislikes are. A survey could be put together to help better understand their feelings. Occasionally take an employee to lunch to see what is on his or her mind. You may also learn about the feelings of other employees. Anheuser-Busch has executives ride with the beer delivery trucks, not just to see the customer, but to get feedback from the "front liners" of their business. Many companies have similar types of programs that let their executives get a pulse on their customers in the "real world." Realize that this is not a onetime thing. Finding out what your employees think should be ongoing, just as it is for the outside customer. Determine which of these or other methods of employee feedback work best and consider doing it at least once every six months, if not more often. "Years ago, business gurus used to apply the business school conundrum: 'Who comes first? Your shareholders, your employees, or your customers?' I said, 'Well, that's easy,' but my response was heresy at that time. I said employees come first and if employees are treated right, they treat the outside world right, the outside world uses the company's product again, and that makes the shareholders happy. That really is the way that it works, and it's not a conundrum at all." This was Kelleher's "mantra." He lived and breathed the strategy that the success of the Southwest Airlines starts with service to employees. It became embedded within the working culture of the company. Kelleher's insistence on this point is, I believe, the real reason that airline has succeeded so memorably at a time when so many of its competitors have faltered. Following this philosophy, Kelleher built a community of employees who walked the walk, and he eventually handed the company over to executives who walked the walk. The transition was seamless-one of the reasons why Southwest is still an amazing organization!

6|P ag e

Toyotas strategy of internal customer service Physical Workplace TMMC's physical workplace is rated as exceptional. Toyota Motor Manufacturing's physical workplace is a custom-built facility includes over three million square feet of manufacturing space and two administrative buildings. Located adjacent to the facility is an impressive 30,000 square foot "Corolla Park" centre that offers a range of health and wellness activities for employees. The head office features an onsite fitness facility (with free memberships, treadmills, stationary bikes, stairmasters, rowing machines, weights, gymnasium, basketball court, volleyball court, squash and racquetball courts, cardio machines, sports leagues, shower facilities, instructor-led fitness classes, and a fully-staffed employee health centre); outdoor 14 acre park with walking trails baseball diamond, basketball court and children's playground; employee lounge (with a quiet lounge area, television and a games room that includes pool tables, foosball, table tennis, air hockey and shuffleboard); religious observance room; onsite cafeteria (with healthy menu items, subsidized meals, Pizza Pizza, Subway and Tim Horton's kiosks); travelling cafeteria cart (called the Pit Stop Caf); secure bicycle parking; free parking; nearby highway access; outdoor patio/deck; discounts at nearby restaurants. Work Atmosphere & Communications TMMC's work atmosphere is rated as exceptional. Depending on their position, employees wear uniforms or may opt for business casual attire. Business casual dress; employee sports teams; organized social events. The company-subsidized social committee (called the TMMC Social Club) organizes a variety of social events throughout the year, including a golf tournament, fun trips (include trips to the theatre, casinos and sports events) and a family Christmas party for employees and their children, with over 7,000 in attendance last year. Through the Carolla Centre, employees also have the opportunity to participate in a wide range of sporting activities, including hockey, soccer, squash, badminton, flag football, floor hockey, basketball, tennis, baseball and volleyball. Employees are kept informed about new developments and can provide direct feedback through a company newsletter; corporate intranet site; traditional suggestion box; email suggestion box. Financial Benefits & Compensation TMMC's financial benefits are rated as above-average. To keep salaries competitive the company participates in outside salary surveys every 12 months. Individual salaries are reviewed every 12 months. Toyota also provides signing bonuses for some employees; year-end bonuses for all employees; year-end bonuses (to $18,000); defined benefit pension with employer contributions (up to 8% of salary); defined contribution pension plan with
7|P ag e

employer contributions (up to 5% of salary); life & disability insurance; retirement planning assistance; phased-in retirement program; discounts (to $1,000 off dealer cost) of new Toyota vehicles for employees (and $800 for family members); lottery for discounted purchase of manager-driven vehicles; the use of a white Lexus RX350 on an employee's (or the children of employees) wedding day, complete with a full tank of gas and complimentary cleaning of the exterior and interior. Health & Family-Friendly Benefits TMMC's health and family benefits are rated as above-average. The company's health plan is managed by Sun Life. As part of the health plan, the employer pays 100% of the premiums. The health plan is a flexible plan with adjustable premiums and coverage levels. Employees who work 40 hours per week receive coverage. There is no waiting period before coverage begins. Employees receive full family coverage on the health benefits plan. The health plan also includes retiree coverage with no age limit. The basic plan includes routine dental; restorative dental; orthodontics; eye care ($215 every 2 years); traditional medicine coverage; alternative medicine coverage; massage therapy; medical equipment and supplies; homecare; employee assistance (EAP) plan; travel insurance. As part of the company's flexible health plan, employee can reinvest their unused health credits into a health spending account for additional coverage, into an RRSP plan, or taken as a taxable cash benefit. Toyota's familyfriendly benefits include; maternity top-up payments (to 65% of salary for 52 weeks); parental leave top-up for new fathers (to 65% of salary for 37 weeks); parental leave top-up for adoptive parents (to 65% of salary for 37 weeks); health benefits during maternity and parental leave; post-secondary academic scholarships for children of employees; flexible working hours; and time off in lieu of overtime pay. Vacation & Personal Time-Off TMMC's vacation and personal time-off are rated as very good. New employees receive 2.8 weeks of vacation allowance after their first year. Vacation increases after 3 years on the job. Long-serving employees receive a maximum of 4.6 weeks of vacation each year. Employees can schedule 5 personal days off each year, as needed. Employees receive 1 personal day off, as scheduled by their employer. During the Christmas to New Year's holiday break, employees receive an additional 4 days off. Employees can also apply for an unpaid leave of absence. Employee Engagement TMMC's employee engagement program is rated as above-average. Employees receive individual performance reviews every 12 months. Managers receive training in how to conduct effective performance reviews. As part of
8|P ag e

the review process employees can provide confidential feedback on their manager's performance. Exit interview provided for departing employees. In addition, all managers receive semi-annual evaluations and contract employees also receive reviews before the end of their contracts. The company also operates a unique suggestion program that awards points for suggesting and implementing cost saving suggestions -- employees can accumulate and cash-out their points when they wish. In a unique demonstration of responding to employee feedback, the redesigned 10th generation Corolla (first launched in 2009) has many uniquely Canadian-inspired features that are the result of employee feedback, from door pockets to accommodate hand-held ice-scrapers to adequate spacing between the clutch and brake pedals for winter boots (men's size 10 1/2 specifically) to cup holders large enough to accommodate a large coffee for the longer Canadian road. TMMC hires an outside consultant to conduct confidential employee satisfaction and engagement surveys. (These surveys are held every 12 months). Training & Skills Development TMMC's training and skills development program is rated as very good. Employees receive tuition subsidies for courses related to their position. In support of ongoing training and education, TMMC provides subsidies for professional accreditations; in-house apprenticeship and skilled trades programs; in-house training programs; online training programs; formal mentoring program. Community Involvement TMMC's community involvement program is rated as exceptional. Toyota Motor Manufacturing actively supports a variety of local charitable initiatives every year. Employees take part in the selection of charitable groups assisted each year. Approximately 188 charitable and community organizations were supported last year. Toyota Motor Manufacturing also encourages employee volunteerism through financial donations to local charitable and community initiatives last year where employees volunteer, from coaching minor league sports leagues to charitable fundraising work. Through this program TMMC donates $250 for every 50 hours of volunteer work completed during the year. Every year, employees also organize a number of charitable fundraising drives (with the company helping to fund up-front costs and providing matching donations), such as the Children's Wish Foundation, Habitat for Humanity and the W. Ross MacDonald School for the Blind. Employees have recently developed a unique "Charity Garden" onsite where employees volunteer to tend to the gardening chores, with the goal of donating proceeds to a local soup kitchen. The company also donates new cars and parts to shop classes at local schools. In a thoughtful initiative, the company donated a 1,000 square meter executive home to the Oxford County Victorian Order of Nurses. Located on the Woodstock site, Toyota chose not to demolish the structure but to find a community partner and donate the building. Today, the former residence (called Sakura House) operates as a 10-bed palliative care facility for residents of Oxford County.
9|P ag e

As part of an ambitious environmental initiative, Toyota Motor Manufacturing set a goal in 2004 of sending zero waste to the landfill. Impressively, the company met this goal through extensive recycling, reusing, reducing and composting programs. The remarkable accomplishment has raised the bar for every manufacturer (and perhaps makes the average householder reflect on their recycling efforts a little more). The company has introduced completely compostable plates, cups, cutlery straws and stir sticks at its onsite cafeteria and sets new environmental goals every year. Not resting on its laurels, TMMC has also introduced heat reclamation technology to reclaim previously waste heat energy to heat water used in its manufacturing processes (saving enough water to fill 300 residential swimming pools and enough energy to heat 65,000 homes each year) and water saving processes to dramatically reduce its water use in the painting process (saving the equivalent of the usage of 280 households each year). The company and its employees are also strong supporters of Earth Day every year, with TMMC publishing an informative newsletter to highlight upcoming initiatives and events. As part of past celebrations, employees and their families gathered at TMMC's facilities in Cambridge and Woodstock and planted over 1,000 trees on the grounds. In addition, the company sponsored the development of the "Toyota Living Roof" at the nearby Laurel Creek Nature Centre. The green roof is a feature attraction for visitors to the centre, highlighting the benefits of green roof technology, such as reduced heating and cooling costs, filtering air and water and absorbing carbon dioxide from the atmosphere.

Toyota builds employee health clinic in new factory to reduce health care costs In an effort to contain health care spending, Toyota Motor will construct a $9 million medical clinic for employees and their families at its new San Antonio truck factory, the Detroit News reports. The clinic will "provide a wider array of treatments and services than a typical factory medical office," including eye care, dental services, pediatrics, laboratory tests and physical therapy, according to the News. Toyota's U.S. health care costs have doubled over the past five years to more than $11,000 annually per plant worker, according to Ford Brewer, assistant general manager for health and wellness at Toyota's North American manufacturing headquarters. The decision to offer more comprehensive services onsite means the company likely will spend more for primary care and prescription drugs, but the additional costs should be offset by a drop in more expensive hospitalizations and specialty care, according to Toyota. Onsite clinics also reduce absenteeism. The clinic, which will be operated by CHD Meridian Health Care, initially will be staffed by two full-time doctors and one part-time doctor, but Toyota expects to increase the medical staff to as many as seven doctors once the plant becomes fully operational. By spring, the plant will employ about 4,100 workers. Toyota will measure the success of the clinic by monitoring employees' health indicators, such as smoking cessation rates and blood pressure

10 | P a g e

levels, and by tracking expenses. Toyota will not require employees to use the clinic but will charge higher copayments and deductibles for workers who seek care elsewhere, according to the News Internal customer involvement with external customer: Since its founding, Toyota has carried out corporate activities based on the concept of the customer always comes first. This concept was declared in The Toyoda Precepts (established in 1935) which has been handed down as the Toyota Groups guiding philosophy. Toyota, including its dealers, makes a companywide effort to build relations with its customers, and all employees keep the customer first policy in mind in all aspects of their jobs. The Customer Relations Division is the division within the company in direct contact with customers needs. The staff places an emphasis on the voices of individual customers, through consulting with them and handling their complaints, striving to improve customer satisfaction. The Customer Assistance Center acts as a contact point within the company for customers and have consulted with or handled complaints from about 200,000 people this fiscal year. Toyota is in contact with its dealers throughout Japan to handle customer complaints, and makes a sincere effort to gain customer trust and satisfaction, striving to maintain and increase the number of Toyota fans. The Customer Relations Division also makes direct proposals to sales, research and development, and production divisions and holds discussion meetings with them, so that customers voices can be useful in improving the companys products and corporate activities. Toyota Auto Salon Amlux showrooms function as a publicity arm of Toyota to offer consultations with customers about purchases and collect customer information to be forwarded to Toyota. In the showrooms, special consulting staff, called Amlux Mirar, deal with customer relations, suggesting the ideal car for each person and providing information about it. The information gathered here is input into the database and provided as feedback to the development and sales divisions via the Toyota Intranet. New car purchaser evaluation reports are also a part of these efforts. Customers visiting Amlux salons are provided with a questionnaire to fill out, by which Toyota gathers frank opinions on exterior design, interior furnishings, and features, etc., which are relayed to the relevant divisions. In addition, from June 2002 Toyota started forwarding information to dealers regarding issues that many customers have voiced concerns or doubts about via satellite-linked terminals, called MU-BOX.

Basic policy: Toyota places emphasis on making automobiles that reflect its policy of customer first, quality first. The key to achieving this lies in Toyotas approach that ensures high quality across all divisions through the control of quality functions. Divisions ranging from product planning, development, production engineering and
11 | P a g e

manufacturing to purchasing and sales & marketing are responsible for maintaining high levels of quality in their respective fields, and the leaders of each division meet every year to draft policies regarding quality functions. The annual policies clearly state the intention to achieve customer safety, satisfaction and happiness through Toyotas products and services. Toyotas efforts take the following three principal directions. Each division in charge cooperates with the Quality Division, which is dedicated entirely to ensuring quality, to promote initiatives. (1) All Toyotas products and services must meet customer expectations and comply with the laws of the particular country where business is conducted; and preventive action must be taken to ensure that quality or environment related issues do not arise. (2) If issues do arise, the causes should be swiftly elucidated and countermeasures counter measures initiated; appropriate action should be taken regarding products that have already been sold to enable early detection and early resolution of issues. (3) Conduct audits to confirm whether each division is taking appropriate action to maintain high quality levels; work on any areas that require improvement. We believe that the six most important factors for effective teamwork are as follows: effective leadership, good system of operating, sufficient and consistent control, friendly and trusting environment, effective communication and common purpose & vision. Traditionally, when we talk about teams, we are looking at people who work together with shared roles, much like a football team. They play into each others positions and have shared skills. At Toyota Manufacturing UK, our team behavior is more like rowing a boat. Each person has their own role, and they become skilled at operating within it, but if any Member of the team is missing, or cannot cope, it upsets the balance of the boat, and its ability to achieve maximum success. Teamwork is essential at Toyota Manufacturing UK. It means: Working together towards shared goals and understanding, share commitment to hard work, being creative and resourceful, sharing views and opinions openly, continuously learning about your job and those of your fellow Members and Being flexible to support the Company and other team Members. Teams share the same purpose, whether it is to build x number of cars or record ways to save money or improve efficiency. All Members must be clear about the task. Each Member of the team needs to understand what needs to be done and when it needs to be complete. Each Member must understand and agree on flexibility/need for continuous improvement. They need to have shared commitment to support others; this ensures that the results of the team measure up to the standards and customer expectations. So, success depends not just on individual skills but on the way those individuals support and work with each other there is no one way to develop teams. Communication is the key to achieving this.
12 | P a g e

One way in which the team environment lends itself to a more effective method of working is the review process. When a team discusses an issue, the conclusions tend to be more considered, and even if there is a correct answer, a team is more likely to get it. Individuals tend to have hidden agendas/prejudices, which cloud decisions. Brainstorming is a more creative way of solving problems. By bouncing ideas off one another, teams are more likely to reach an effective answer. Finally, it means a decision is reached through consensus so if all support it, no one can complain. Coming to a team decision is not always easy. The team needs to listen to and consider all ideas so as not to alienate any of the Members. Learning to co-operate effectively can be difficult. One needs to urge people to respect each others knowledge/abilities, putting team success ahead of individual goals.

Ducati:
Introduction: Ducati was acquired by Cagiva Group in 1983. The firm focused on the Sports bike segment under new management team. Then, a golden age of Ducati sports bike came with the effort of their strong R&D group. Although Cagiva found a way to solve its financial problems by unveiling a motorcycle that shocked the world-the Ducati Monster in 1993, which did work. Ducati have insufficient enough working capital for its payment to some major suppliers due to the liquidity problems in the mid 90s, which caused the delay in the production Cagiva sold Ducati to the Texas Pacific Group in 1996, when Ducati was just one step from going bankrupt. Ducatis R&D group is still strong, so based on the help of large amount of funding from new owner and the strategies form new management which was led by Federico Minoli, Ducati revived and had made significant growth after a turnaround program from 1996-2000. External Analysis: Political Tariff protection could be an advantage in domestic market, but also a disadvantage to compete with local firms in foreign markets y Indian Government regulation which cause the import of foreign motorcycle to become high cost Analysis: Government regulations and trade barriers cause Ducati more problems when they tried to venture into foreign markets. y 1998 Asian Financial Crisis: affects Asian markets in terms of levels of consumption and reduce the sales of automobile in most countries. y Crisis: results in reduced consumer spending and confidence y Economic crisis aggravates the decline on the sales of motor industry Analysis: By the year 2000, most of Asian economy had recovered from the financial crisis in the 1998 which open the market even more to global trade and the European market are more open. y Increasing in the culture of using recreational motorcycle. y Forming of groups such as Ducati owner clubs and Harley y

Economy

Social

13 | P a g e

Technology

Legal

Owner group in most country y More female population interested in the recreational and sports motorcycles. Analysis: The increase in using motorcycles for recreational purpose and motorcycle are no longer a form of transportation only. Emerging female markets shows the opportunity for a new market. y More powerful engines, more fashion designs. Technology is developing fast to achieve higher speed, safety and comfort y Internet become a new platform for marketing and brings people together. y Japanese motorcycle is producing more fuel efficient engines compared to Ducati & Harley Davidson Analysis: Ducati must stay ahead of the competitors in term of technology advancement if the company would to success in the market. y Gentlemans Agreement between motorcycle manufacturers which limit the top speed and horsepower of the motorcycles. y Increase in state regulations concerning public land use, allowable amounts of noise, age and other restrictions y Deregulations and abolition of exchange control strengthen the global economy Analysis: Increasing regulation for public land vehicle will cause disadvantage to Ducati if there is a law limiting the speed of the motorcycles which is part of the competitive advantage for Ducati.

14 | P a g e

Industry Analysis:

Ducatis competitive positioning in reference market

15 | P a g e

Marketing Strategies: To strengthen its brand name, Ducati created the core branding strategy called The World of Ducati. The motorcycles, accessories, and apparel were the center of this system which complemented by six categories. Each category contains several sub-categories. Each category was interconnected and was part of other categories. For example, racing was a category on its own but also acted as part of advertising.

Except the physical marketing strategies, Ducati also introduced the virtual marketing strategies. Ducati.com was using the internet to promote and to sell only limited editions of its motorbikes rather than all of its product lines. However, the Ducati.com was not aiming at taking business away from the dealers, but rather at attracting new customers and helping bring more business to the dealers.

16 | P a g e

Porters Generic Strategies:

Based on the porters generic strategy, Ducati and Harley Davidson are using differentiation strategy where the price of the product is not much of the concern to the marketer. Ducati is emphasis on the technology advancement on their product and selling their brand name rather than selling their product at a lower price for competitive advantage. Same goes for Harley Davidson which emphasis on the product quality and the culture of riding Harley Davidson Bike. In the segment both Ducati and Harley choose and attributes that many buyers perceive as important, and uniquely positions it to meet those needs.

17 | P a g e

SWOT Analysis:

Critical Success Factors: y y y Technology and R&D Efficient Production Lines and Supply chain Strong Brand Image

Critical success factor is the term for an element which is necessary for an organization or project to achieve its mission. These factors are the critical factors or activities required for ensuring the success of the business. For Ducati, the companys main critical success factor (CSF) is the strong brand image from their racing team. As a champion for many years, the customers perception is that Ducati motorcycle is up to quality as a racing motorcycle. Customers will tend to think that Ducatis product as a racing associated motorcycle which will then choose to buy a Ducati. Ducati used the brand name as the vehicle to deliver a corporate image to its audience which will then help the corporation to success in their selling of product to the customers. Beside brand, the Ducatis effort in the technology research and development also works as one of their CSF. By investing heavily on the R&D, Ducati will be able to exploit the distinctive elements of the motorcycles and ahead of their competitor in term of technological levels, style and performances for their motor cycles. The development of the networking capital through an improvement of the suppliers relationship management and
18 | P a g e

the creation of a new distribution channels - the Ducati Stores had bring a drastic improvement in the efficiency of the Ducatis supply chain and their distribution network. These had increase the flow of the product to the customers and reduce the cost of operations. Employee Training For Satisfying Customers:  Ducati follows an updated three-level program which is primarily hosted by Ducati North America & held at one of the two Wyotech motorcycle training facilities in Ormond Beach, Florida and Fremont, California.  The program is taught by certified Ducati motorcycle authority Bruce Meyers, founder of renowned New England-based Ducati Performance shop BCM Motorsports.  Inside the classroom students receive hands-on experience working on both new motorcycles (1198 Superbike, Monster 696) and older generation machines (999 and 749-series Superbikes). Training Levels:  In Level 1 students are taught how to complete all the service basics including pre-delivery inspection (PDI) and 7500-mile service. They also learn the fundamentals of the charging system, fuel-injection, suspension basics, and immobilizer anti-theft system set-up.  Students learn the inner working of Ducati motorcycle engines in Level 2, required for a mechanic to provide warranty repairs on a Ducati motorcycle. Technicians learn how to undertake a complete engine overhaul and operate Ducatis Diagnostic System (DDS) tool, allowing for advanced system analysis. In order to be eligible for Level 2 training, the student must have completed the updated Level 1 program and undergo annual update certification to keep their Level 2 status.  To become a Ducati master mechanic, students must complete Level 3 training, which is separated into four modules.  The first module consists of training in the inner workings and set-up of Ohlins suspension components. Instruction is held at Ohlins USA headquarters in Hendersonville, North Carolina.  The second module consists of engine dynometer training enabling the dealership to further diagnose problems and further tune the motorcycle if necessary.  The remaining two modules are comprised of advanced electronic troubleshooting and operations management training. Employee Care at Ducati:  People Service Profit Philosophy (PSP)  Leadership Evaluation & Awareness Program  New Hire Orientation Kit  Open Door Policy  Personnel Records Information System  Job Change Applicant Tracking System
19 | P a g e

Ducati.com

Context

E-mail

Personal home page

Commerce

Content

Community

B-2-C

B-2-B

C-2-C

Racing

DCO activities

Bikes

Bikes

Second hand bikes

Newsletter

Chat lines

Accessories

Accessories

Second hand spare parts

Motorcycle reviews

Games

Appeals

Apparels

second hand apparel second hand merchandising

Pricing

Affiliate programs Referral programs

Merchandising

Merchandising

Technical tips

Financial services

Financial Services Second hand motorcycles

Memorabilia

Maintenance reminder

Message board Investor realtions

Ticket counter

Forum

Schools

Ducatis New Web-Hierarchy:

Rental

Tours

Bets

20 | P a g e