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Overview of Italy and TVS Project

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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Overview of Italy and TVS Project

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  1. Overview of Italy and TVS Project

  2. Italy • Southern Europe, peninsula from Central Mediterranean Sea to northeast of Tunisia • 301,340 sq. km • Slightly larger than Arizona

  3. Italian People • Population – 61 Million • 90% Roman Catholic • Languages – Italian, German, French • Literacy – 98.4%

  4. Government • Government – republic • Capital – Rome • Legal system – civil law • Chief of State – Prime Minister Mario MONTI

  5. 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

  6. Economy • GDP – $1.847 trillion (11 in the world) • GDP growth = 0.4% • GDP per capita – $30,500 (45in the world)

  7. Economy • GDP composition – agriculture (2%), industry (24.7%), service (73.4%) • Labor force – 25M • Unemployment – 8.4% • Inflation – 2.9%

  8. Economy • Agricultural products – fruits, vegetables, grapes, potatoes, sugar, soybeans etc • Industry – tourism, machinery, food processing, iron and steel, ceramics, etc

  9. Export • Volume - $525 B • Products – engineering, textiles, machineries, food • Partners – Germany (13.3%), France (11.8%), US (5.9%)

  10. Import • Volume - $549 B • Products – engineering, chemicals, transport equipments • Partners – Germany (16.5%), France (8.8%), China (7.7%)

  11. The Company

  12. 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

  13. 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

  14. Company • Dual goal : tradition + innovation • Theme : Made in Italy Spirit • Culture of design • Highest European standards • International awards

  15. TVS Service • Return rate < 1.5% • Average lead time < 45 days • On time deliveries > 95%

  16. 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)

  17. 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)

  18. TVS Sales • 30% - Italy • 19% - France • 14% - Switzerland • 6% - Russia • 5% - Sweden • 4% - Holland • 22% - Others

  19. TVS Market Positioning • Big retailers – 68% • Loyalty programs – 14% • Independent shops – 7% • Others – 5% • Industrial – 4% • Wholesalers – 2%

  20. Growth in ceramic coatings • Ceramic – Euro 20M • Roller – Euro 17M • Lacquer – Euro 14M • Induction – Euro 7M • Enamel – Euro 6M • Titan – Euro 5M

  21. 2012 Budget (in M Euro)

  22. TVS Production Range • Rolled coated items • Spray coated • Ceramic • Induction • Titanium • Handle

  23. Products • Afrodite • Arco • Liquida • Ho • Terra • 100% Ceramica

  24. 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

  25. The US Cookware Landscape

  26. 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

  27. 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)

  28. 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)

  29. 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

  30. China Landscape

  31. 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.

  32. The Project

  33. How should TVS grow their business in China ?

  34. Distributor • 1. Should they work with only one distributor or multiple distributors to optimize market development in China ?

  35. Speed of growth • 1. Should they grow fast or grow slow in the China market ?

  36. Success factors • 1. What factors need to be considered to develop their business successfully in China ?

  37. 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 ?

  38. 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

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