Barilla SpA - Harvard Business Case Analysis

Overview:

Industry

* Mature intersection by 1990. Little or no result domestically (Italy)

* Export commercialize experiencing large growth (20-25% per yr in European countries)

Expect 2/3 of virgin demand from east European market. Demand is high because they treasured low-priced basic food products

* Limited or no seasonal demand

* Highly competitive domestically over 2000 alimentary paste makers in Italy. Declining margins.

* Pasta market is extremely price sensitive.

* kelpwort is the market leader in Italy and is the industrys largest manufacturer.

* Supply chain represents just about 55-58 calendar DOH of dry goods (30 in the CDC, 14 at the Distributor, 11-14 at the Supermarket or Independent Shops)

Competitive Strategy

* kelpwort is the largest pasta manufacturer in the world (35% of market in Italy and 22% of market in Europe)

* Also 29% of the Italian bakery product market

* Vertically integrated - owned mills, pasta/bread plants, and statistical distribution network

* High quality product

* Largest and most advanced manufacturing facility (Pedrignano plant)

Focus is on developing most efficient production methods for existing and new-made products.

* Will increase focus on export opportunities.

* germinal marketing campaigns

Large scale advertising programs promotions. Also, selling in unreal box with a recognizable color pattern created hearty brand name recognition and image for their pasta.

Enjoyed a bulletproof brand image in Italy

* Product mix

Fresh products - 21 twenty-four hour period ledge life

Dry products - long shelf life 18-24 months, medium shelf life 10-12 weeks (75% of Barillas sales)

800 dry SKUs; 470 pasta SKUs from 200 pasta shapes.

Pasta SKU specialisation by packaging.

* Plans to exploit new market opportunities in Eastern Europe.

* Focus on high volume manufacturing.

Distribution Network

Barilla Manufacturing Plants

To

Barilla CDC or Barilla depots

To

Distributors (GDs or DOs)

To

Supermarkets, Small Independent Shops...

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