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%

Government

Government – republic

Capital – Rome Legal system – civil

law Chief of State – Prime

Minister Mario MONTI

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

Economy

GDP – $1.847 trillion (11 in the world)

GDP growth = 0.4% GDP per capita –

$30,500 (45 in the world)

Economy

GDP composition – agriculture (2%), industry (24.7%), service (73.4%)

Labor force – 25M Unemployment –

8.4% Inflation – 2.9%

Economy

Agricultural products – fruits, vegetables, grapes, potatoes, sugar, soybeans etc

Industry – tourism, machinery, food processing, iron and steel, ceramics, etc

Export

Volume - $525 B Products –

engineering, textiles, machineries, food

Partners – Germany (13.3%), France (11.8%), US (5.9%)

Import

Volume - $549 B Products –

engineering, chemicals, transport equipments

Partners – Germany (16.5%), France (8.8%), China (7.7%)

The Company

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

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

Company

Dual goal : tradition + innovation

Theme : Made in Italy Spirit

Culture of design Highest European

standards International awards

TVS Service

Return rate < 1.5% Average lead time <

45 days On time deliveries >

95%

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)

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)

TVS Sales

30% - Italy 19% - France 14% - Switzerland 6% - Russia 5% - Sweden 4% - Holland 22% - Others

TVS Market Positioning

Big retailers – 68% Loyalty programs –

14% Independent shops –

7% Others – 5% Industrial – 4% Wholesalers – 2%

Growth in ceramic coatings

Ceramic – Euro 20M Roller – Euro 17M Lacquer – Euro 14M Induction – Euro 7M Enamel – Euro 6M Titan – Euro 5M

2012 Budget (in M Euro)

Industrial investments 2.1

Product .700

R & S .150

Buildings and Services .600

ADV .800

Delocalisation 2.1

Total 6.45

TVS Production Range

Rolled coated items Spray coated Ceramic Induction Titanium Handle

Products

Afrodite Arco Liquida Ho Terra 100% Ceramica

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

The US Cookware Landscape

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

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)

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 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)

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

China Landscape

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.

The Project

How should TVS grow their business in China ?

Distributor

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

Speed of growth

1. Should they grow fast or grow slow in the China market ?

Success factors

1. What factors need to be considered to develop their business successfully in

China ?

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 ?

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