Italdesign France

1. Italdesign France Best in France Case Study May 2005 – June 2005 Francesca Fenzi Aaditya Khemuka Nicolas Naftalski

2. Purpose of project The Best in France case study aims to : • Identifying the various acclimatization strategies pursued by firms when starting business units in France, • It also enables students to get a real feel of organizational cross-cultural issues faced by companies. • The local government bodies are benefited in terms of being able to identify and benchmark assistance needs of foreign capital investors. It also facilitates adoption of strategies that add value to the French economy and to firms operating in France, • The participating firms are given access to the database of the study thus providing them a repository of knowledge in management practices. Best in France case study

3. The storyline…. • What is Italdesign? • From to Turin to BUC, pourquoi? • Journey from Turin to BUC in a few lines… • Milestones & Detours en-route • Comment ça marche en France? • Cosa ci piace in Francia • Words of wisdom from the top….. • Ringraziamo Italdesign Team • Bibliography Best in France case study

4. What is Italdesign? • La storia del gruppo • Italdesign GIUGIARO founded in Turin in 1968 • 100% owned by the families GIUGIARO and MANTOVANI • Alcune cifre • Personel: 1100 • 875 in Italy, 225 abroad • Turnover: € 177M Best in France case study

5. What is Italdesign? • I lavori del gruppo • Ensuring carmakers a comprehensive consulting service to bring together the flexibility of the service with "state of the art technology«  • All this makes the company able to perform the assignment of a complete programme – from definition of the style to pre-series assistance – as well as partial but no less important tasks, such as stylistic research, production engineering of body subgroups, building prototypes and experimental machining. Best in France case study

6. What is Italdesign? • L'organizzazione del gruppo • 5 managerial sectors handling more than 30 operating divisions • Styling • Virtual Reality Center • Engineering • Prototyping • Testing • Operations in 5 countries Best in France case study

7. IDD IDChina (Shangai) What is Italdesign? Best in France case study

8. What is Italdesign? • Italdesign France • Founded in 2002 • Located in BUC, Yvelines • 150 employees: • Model and Painting departments (20 persons) • Engineering centres (130 persons) • Turnover: € 5.4M Best in France case study

9. The journey from Turin to BUC, pourquoi? • The philosophy of international expansion at Italdesign is similar to strategy consulting firms, they first test the market by doing a project with a major local automotive player. Then expand share of wallet and finally if mutually beneficial to clients and future business potential set-up local subsidiary. • Italdesign has successfully executed above strategy in Spain, Germany & France as part of it’s European expansion • Italdesign has 2 major automotive OEM clients in France : PSA Peugeot Citroen & Renault • The choice of BUC has proved to be ideal. Italdesign is situated mid-way between Peugeot’s new design center at Velizy & Renault Technocentre, an ultra-modern automotive R&D centre at Guyancourt Best in France case study

10. I nostri cari clienti in Francia Best in France case study

11. Journey from Turin to BUC in a few lines… • Given the quantum of business in France, Italdesign opted to get local operations up & running quickly, hence they chose to acquire an existing design firm rather than start operations from scratch like in Spain. • Despite it’s size of close to 1100 employees the Giugiaro group maintains a family run business outlook & some of it’s decisions, specifically the transition of ownership acquired company Berci SA, BUC makes an ideal case. • Berci, was an engineering firm owned & managed by the Mr. & Mrs. Boulou, to make a soft transition, Italdesign chose to nominate the wife of Mr. Matteo Gera as the financial controller. This enabled them to have a rather family & congenial transition avoiding the cold meetings generally conducted in the presence of lawyers or bank controllers. Best in France case study

12. Journey from Turin to BUC in a few lines… • In addition to this acquisition, Italdesign also simultaneously set-up new engineering facility at BUC site, by transplanting the organizational structure from the parent company at Turin Best in France case study

13. Milestones & Detours en-route • The acquisition and integration of Berci SA into Giugiaro group was smooth and quick. • The organizational set-up which had worked for 40 years in Italy faced major teething troubles. • The size of operations 150 people work-force and it’s Italian origin meant lack of policy guidelines, rendering it difficult to have a structured transition Best in France case study

14. Comment ça marche en France???? • Initially during the set-up phase, Italdesign tried to transplant the Italian organization structure based on the superficial semblance between French & Italian cultures. • But the tried & tested structure did not result in the same level of efficiency & output despite being based in a similar country with equally talented workforce and the same clients • The differences arose due to the intrinsic difference in approach to work & problems • Also the firm discovered that the fundamental driver of an organization differed between France and Italy, with the former based on process & the later being people driven. • The nature of work made it very local specificity oriented, lead to certain unexpected problems. Italdesign moved one of their most experienced clay-modeling experts to France to provide a good knowledge base, but this resource could not be utilized as planned. The unique problem was lack of fluency in French which did nit allow him to capture the nuances of the clients request for design modifications, thus despite the requisite skill he could not deliver. Best in France case study

15. Comment ça en France???? • Mr. Gera (GM) in retrospect could identify in part a similarity of their entry into France with 2 major mergers in the automotive industry: • Renault-Nissan: Convergence of Franco-Japanese management philosophy lead to the successful turnaround of Nissan • Daimler-Chrysler: Rocky marriage of two equals, with the sum ending up less than the parts. • Thus with two strong & distinct regional work ideologies, though with both being European, it is not advisable to try and transplant one to another. The best way forward is to achieve a balance between the two, rendering integration easier & also providing better management practices. Best in France case study

16. Cosa ci piace in Francia • The concept of the structured work environment, especially for a company 120-150 people in size where management is primarily pre-occupied with business policies, it helps to have an organized work force as it reduces the need for guidance regarding job description & work policy matters. • Availability of skilled work-force, which can easily adapt to combination of Franco-Italian work culture, thus deriving best of both worlds. Best in France case study

17. Words of wisdom from the top… • A few words of reflection by Mr. Matteo Gera, on the move to France and the future of Italdesign France • If you smell opportunity in a market move fast, you should not lose time experimenting. • Certain things like hiring have to be done with local guidance as expatriates, initially, are not plugged into the local scene, in terms of rankings of academic schools, work culture etc. This is specific to entry level recruitment as, experienced candidates could be evaluated on the basis of work experience. • Post the stabilization of French operations, the company now looks forward to interacting with CCIP & other local authorities to better utilize the services offered to foreign investors, like ‘Formation’ • The firm looks to be more active in participating in the activities of organized by CCIP to increase visibility as well. Best in France case study

18. Ringraziamo • Mr. Matteo Gera, General Manager, Italdesign France gera@italdesign-france.fr • Mrs. Valeria Emiliani, Finance Controller, Italdesign France emiliani@italdesign-france.fr • Mr. Mattia Pipino, Project Manager, Italdesign France pipino@italdesign-france.fr Italdesign France 256, rue Fourny, BUC, 78530 Tel: +33 (0)1 56 77 36 00 http://www.italdesign.it Best in France case study

19. Bibliography • References: • Italdesign Web Site http://www.italdesign.it • Giugiaro Group Corporate Presentation June 2005 Best in France case study

20. Our Team • Francesca FENZI, francesca.fenzi@mailhec.net • Nicolas NAFTALSKI, nicolas.naftalski@mailhec.net • Aaditya KHEMUKA, aaditya.khemuka@mailhec.net HEC School of Management 1, rue de la Libération 78351 – Jouy en Josas Cédex Tel: +33 (0)1 39 67 70 00 http://www.mba.hec.fr http://www.hec.fr Best in France case study