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Overview of Italy and TVS Project. Italy. Southern Europe, peninsula from Central Mediterranean Sea to northeast of Tunisia 301,340 sq. km Slightly larger than Arizona. Italian People. Population – 61 Million 90% Roman Catholic Languages – Italian, German, French Literacy – 98.4%.
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Italy • Southern Europe, peninsula from Central Mediterranean Sea to northeast of Tunisia • 301,340 sq. km • Slightly larger than Arizona
Italian People • Population – 61 Million • 90% Roman Catholic • Languages – Italian, German, French • Literacy – 98.4%
Government • Government – republic • Capital – Rome • Legal system – civil law • Chief of State – Prime Minister Mario MONTI
Economy • Diversified industrial economy – developed North, welfare-dependent, agricultural South • High underground economy (17% GDP) • Reforms – balance budget, decrease debt, increase VAT, pension reforms, cuts to public administration
Economy • GDP – $1.847 trillion (11 in the world) • GDP growth = 0.4% • GDP per capita – $30,500 (45in the world)
Economy • GDP composition – agriculture (2%), industry (24.7%), service (73.4%) • Labor force – 25M • Unemployment – 8.4% • Inflation – 2.9%
Economy • Agricultural products – fruits, vegetables, grapes, potatoes, sugar, soybeans etc • Industry – tourism, machinery, food processing, iron and steel, ceramics, etc
Export • Volume - $525 B • Products – engineering, textiles, machineries, food • Partners – Germany (13.3%), France (11.8%), US (5.9%)
Import • Volume - $549 B • Products – engineering, chemicals, transport equipments • Partners – Germany (16.5%), France (8.8%), China (7.7%)
Company • Italian premier cookware company situated in Fermignano, Italy (near Ancona Port, 130 km from Bologna) • Founded in 1968 • Built factory in 1986 • http://www.tvs-spa.it
Company • Starting in 2000, innovation and technological experimentation drove designs • In 2008, developed “Ceramit” ceramic coating with Ilag Swiss • Recipient of several awards, including the 2011 Compasso d’Oro
Company • Dual goal : tradition + innovation • Theme : Made in Italy Spirit • Culture of design • Highest European standards • International awards
TVS Service • Return rate < 1.5% • Average lead time < 45 days • On time deliveries > 95%
Business Approach • Respect for environment • Green philosophy – Cadmium and lead free coatings, recyclable paper in packaging • 260 employees (195-Production, 10 - R&D, 5 – QC, 35 – Strategic Departments such as marketing, sales)
TVS Sales • 2008 – 54.9 M Euro • 2009 – 54.79 M Euro • 2010 – 62.70 M Euro • 2011 – 67.55 M Euro • 12 M pieces sold in 68 countries (2011)
TVS Sales • 30% - Italy • 19% - France • 14% - Switzerland • 6% - Russia • 5% - Sweden • 4% - Holland • 22% - Others
TVS Market Positioning • Big retailers – 68% • Loyalty programs – 14% • Independent shops – 7% • Others – 5% • Industrial – 4% • Wholesalers – 2%
Growth in ceramic coatings • Ceramic – Euro 20M • Roller – Euro 17M • Lacquer – Euro 14M • Induction – Euro 7M • Enamel – Euro 6M • Titan – Euro 5M
TVS Production Range • Rolled coated items • Spray coated • Ceramic • Induction • Titanium • Handle
Products • Afrodite • Arco • Liquida • Ho • Terra • 100% Ceramica
Marketing • Trade shows attended – Paris, Hong Kong, Milan, Frankfurt, Turin, etc • Advertising mediums – magazines, TV commercial, radio, cinema, outdoor, blogs, website, text messages, one-on-one meetings • Chef sponsor – Carlo Cracco
US Cookware Sales, 2010 (in M) • Total – 1087 • Aluminum – 674 • Stainless – 302 • Cast iron – 100 • Bakeware – 305 • Kitchenware – 37 • Cookware, bakeware, cutlery = $3 B market
Cookware Industry Trends • Cookware, bakeware, cutlery market sales in the US has been declining due to poor housing sales, declining consumer confidence, reduction in high-end purchases. • Some brands increased sales due to focus on education • Growth in stainless steel cookware (ie, gourmet kitchen)
Cookware Industry Trends • Single people had food behavior suited for certain types of cookware • High income household more likely to spend on high quality kitchen tools and cookware • Childless couple with higher than average income most likely to purchase high end cookware • Health issues associated with certain cookware (ie aluminum) • Safety issues (ie glass bakeware shattering)
Cookware Industry Trends • There exist other premier brands (ie Demeyere) • Cookware sales have been growing in other parts of the world ie Asia (India - $625M, South Korea – 270M, Thailand - $145M) • Mini kitchenware have started to gain popularity • Copper cookware from France makes inroads
China Landscape • TVS entered the China market in 2012 through a distributor in Shanghai. In just a few months, sales have reached 300,000 Euro. • TVS has been present in Korea and Taiwan and has performed well.
Distributor • 1. Should they work with only one distributor or multiple distributors to optimize market development in China ?
Speed of growth • 1. Should they grow fast or grow slow in the China market ?
Success factors • 1. What factors need to be considered to develop their business successfully in China ?
Strategies • 1. If you were a Business Development Consultant assigned to the TVS account, what five (5) strategies will you recommend in order for the company to optimize their business in the country ?
Useful project resources • 1. Review documents on Moodle and study articles that could be relevant to the case. • 2. Check out the CIA World Factbook website for current business and economic information on China. • 3. Check out this link : Country Commercial Guide – China (available at export.gov) export.gov/china/build/groups/public/.../eg_cn_025684.pdf