Lucchetti
I. STRATEGIC PROFILE AND CASE ANALYSIS PURPOSE
Case Background
Lucchetti, a subsidiary of Quinenco, has entered the Peruvian market after seeing the growth opportunity that had yet to be taken hold of. The company was known for the quality, nutritional value, and competitive prices of its products, most especially its pasta. Amidst the powerful competition, Lucchetti could have succeeded, if it hadn’t been only for the issues it faced in Lima city.
Lucchetti began by importing pasta from Chile, and then from Italy. Sales underwent continuous growth, but because of the seemingly ensuing price war in Peru and the high cost of importation, Lucchetti was tempted to consider the construction of a plant in Lima.
Because of certain oppositions, the construction was always disrupted, but finally went on line in 1999. However, in 2001, Lima City issued an order to close the LP plant, revoking the operating license, another in 2002, and finally in 2003 wherein it was truly shut down.
Lucchetti’s board decided to close immediately. However, in the ensuing months several local mayors in other parts of Lima offered to allow Lucchetti to relocate to their districts at preferential prices with favorable tax terms. This would mean an opportunity for Lucchetti to make up for its losses. It has however been emphasized the measure of getting out Peru, and Argentina as well, is to better concentrate its efforts in Chile where it has strong brand recognition, significant market share, access to a critical mass of consumers, and an in-house distribution capabilities.
Statement of the Problem
Considering all the losses they have incurred in Peru, should Lucchetti continue with its Peru operations or should it proceed leaving the country and concentrate its efforts in Chile?
Vision: To become the leading pasta company in South America.
Mission: “Lucchetti is committed to upholding our consumers’ well-being by providing every Peruvian high quality pasta made only
Case Background
Lucchetti, a subsidiary of Quinenco, has entered the Peruvian market after seeing the growth opportunity that had yet to be taken hold of. The company was known for the quality, nutritional value, and competitive prices of its products, most especially its pasta. Amidst the powerful competition, Lucchetti could have succeeded, if it hadn’t been only for the issues it faced in Lima city.
Lucchetti began by importing pasta from Chile, and then from Italy. Sales underwent continuous growth, but because of the seemingly ensuing price war in Peru and the high cost of importation, Lucchetti was tempted to consider the construction of a plant in Lima.
Because of certain oppositions, the construction was always disrupted, but finally went on line in 1999. However, in 2001, Lima City issued an order to close the LP plant, revoking the operating license, another in 2002, and finally in 2003 wherein it was truly shut down.
Lucchetti’s board decided to close immediately. However, in the ensuing months several local mayors in other parts of Lima offered to allow Lucchetti to relocate to their districts at preferential prices with favorable tax terms. This would mean an opportunity for Lucchetti to make up for its losses. It has however been emphasized the measure of getting out Peru, and Argentina as well, is to better concentrate its efforts in Chile where it has strong brand recognition, significant market share, access to a critical mass of consumers, and an in-house distribution capabilities.
Statement of the Problem
Considering all the losses they have incurred in Peru, should Lucchetti continue with its Peru operations or should it proceed leaving the country and concentrate its efforts in Chile?
Vision: To become the leading pasta company in South America.
Mission: “Lucchetti is committed to upholding our consumers’ well-being by providing every Peruvian high quality pasta made only