overview of italy and tvs project. italy f southern europe, peninsula from central mediterranean sea...
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Overview of Italy and TVS Project
Overview of Italy and TVS Project
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Italy
Southern Europe, peninsula from Central Mediterranean Sea to northeast of Tunisia
301,340 sq. km Slightly larger than
Arizona
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Italian People
Population – 61 Million
90% Roman Catholic Languages – Italian,
German, French Literacy – 98.4%
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Government
Government – republic
Capital – Rome Legal system – civil
law Chief of State – Prime
Minister Mario MONTI
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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
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Economy
GDP – $1.847 trillion (11 in the world)
GDP growth = 0.4% GDP per capita –
$30,500 (45 in the world)
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Economy
GDP composition – agriculture (2%), industry (24.7%), service (73.4%)
Labor force – 25M Unemployment –
8.4% Inflation – 2.9%
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Economy
Agricultural products – fruits, vegetables, grapes, potatoes, sugar, soybeans etc
Industry – tourism, machinery, food processing, iron and steel, ceramics, etc
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Export
Volume - $525 B Products –
engineering, textiles, machineries, food
Partners – Germany (13.3%), France (11.8%), US (5.9%)
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Import
Volume - $549 B Products –
engineering, chemicals, transport equipments
Partners – Germany (16.5%), France (8.8%), China (7.7%)
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The Company
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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
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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
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Company
Dual goal : tradition + innovation
Theme : Made in Italy Spirit
Culture of design Highest European
standards International awards
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TVS Service
Return rate < 1.5% Average lead time <
45 days On time deliveries >
95%
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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)
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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)
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TVS Sales
30% - Italy 19% - France 14% - Switzerland 6% - Russia 5% - Sweden 4% - Holland 22% - Others
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TVS Market Positioning
Big retailers – 68% Loyalty programs –
14% Independent shops –
7% Others – 5% Industrial – 4% Wholesalers – 2%
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Growth in ceramic coatings
Ceramic – Euro 20M Roller – Euro 17M Lacquer – Euro 14M Induction – Euro 7M Enamel – Euro 6M Titan – Euro 5M
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2012 Budget (in M Euro)
Industrial investments 2.1
Product .700
R & S .150
Buildings and Services .600
ADV .800
Delocalisation 2.1
Total 6.45
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TVS Production Range
Rolled coated items Spray coated Ceramic Induction Titanium Handle
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Products
Afrodite Arco Liquida Ho Terra 100% Ceramica
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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
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The US Cookware Landscape
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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
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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)
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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 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)
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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
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China Landscape
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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.
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The Project
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How should TVS grow their business in China ?
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Distributor
1. Should they work with only one distributor or multiple distributors to optimize market development in China ?
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Speed of growth
1. Should they grow fast or grow slow in the China market ?
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Success factors
1. What factors need to be considered to develop their business successfully in
China ?
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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 ?
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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