Barilla SpA - Harvard Business Case Analysis
Overview:
Industry
* Mature product by 1990. Little or no growth domestically (Italy)
* Export market experiencing large growth (20-25% per yr in European countries)
Expect 2/3 of new demand from Eastern European market. Demand is high because they wanted low-priced basic food products
* Limited or no seasonal demand
* Highly competitive domestically over 2000 pasta manufacturers in Italy. Declining margins.
* Pasta market is extremely price sensitive.
* Barilla is the market leader in Italy and is the industry's largest manufacturer.
* Supply chain represents approximately 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
* Barilla 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 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 products.
* Will increase focus on export opportunities.
* Creative marketing campaigns
Large scale advertising programs promotions. Also, selling in cardboard box with a recognizable color pattern created strong brand name recognition and image for their pasta.
Enjoyed a strong brand image in Italy
* Product mix
Fresh products - 21 day shelf life
Dry products - long shelf life 18-24 months, medium shelf life 10-12 weeks (75% of Barilla's sales)
800 dry SKU's; 470 pasta SKU's from 200 pasta shapes.
Pasta SKU differentiation 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 (GD's or DO's)
To
Supermarkets, Small Independent Shops
1. What do you think are the
Industry
* Mature product by 1990. Little or no growth domestically (Italy)
* Export market experiencing large growth (20-25% per yr in European countries)
Expect 2/3 of new demand from Eastern European market. Demand is high because they wanted low-priced basic food products
* Limited or no seasonal demand
* Highly competitive domestically over 2000 pasta manufacturers in Italy. Declining margins.
* Pasta market is extremely price sensitive.
* Barilla is the market leader in Italy and is the industry's largest manufacturer.
* Supply chain represents approximately 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
* Barilla 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 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 products.
* Will increase focus on export opportunities.
* Creative marketing campaigns
Large scale advertising programs promotions. Also, selling in cardboard box with a recognizable color pattern created strong brand name recognition and image for their pasta.
Enjoyed a strong brand image in Italy
* Product mix
Fresh products - 21 day shelf life
Dry products - long shelf life 18-24 months, medium shelf life 10-12 weeks (75% of Barilla's sales)
800 dry SKU's; 470 pasta SKU's from 200 pasta shapes.
Pasta SKU differentiation 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 (GD's or DO's)
To
Supermarkets, Small Independent Shops
1. What do you think are the