Course: Strategic Management PB
Instructor: Zhang Haiyan Zheng Xin
Homework: Italian Pasta Industry
Name: Giorgia Di Muzio
Student ID No.:
I declare that this assignment is my own work, which all sources of reference are acknowledged in full and it has not been submitted for any other course.
Italian pasta industry and trends
With 3.2 million tons Italy is the leading country in the production of pasta, and this quantity represents 26% of world production and 75% of EU production.
The value of production of Italian pasta has reached a total of 6.1 billion euro with an employment of 30,000 employees working in around 6,000 companies.
Italy also holds the record for the consumption of pasta (about 28 kg per capita per year, equal to three times the consumption in the U.S.). Phenomena such as new dietary trends, the deconstruction of the meals and the emergence of innovative competitors have barely scratched the consumption of dry pasta.
In the period 2006-2009 the total consumption has declined for both egg noodles (- 1.5%) and for the dried semolina pasta (-1.2%).
In recent years, the demand for dried pasta has stabilized around 1 million tons per year.
In recent years, the consumption of Italian families has changed significantly. The phenomena that impact on the recent trends of consumption are not only aging of people, but also environmental awareness, sophistication and more attention to health. Due to the current economic environment, last year consumers have favored the purchase of regular semolina pasta, the cheapest dish ever. Many consumers, in fact, they are extremely interested in the price factor.
However, from a co-branded search conducted by IRI, in partnership with the Bocconi University in Milan, it was found that consumers are interested in having a good compromise in terms of price for value. That is to say that the competitive battle that should not necessarily be played only on price and promotions. In fact, effective communication and product innovation are key strategies for a company to obtain satisfactory results from the point of view of the market share from the revenue.
Finally, the marginal niche products with a strong health value (such as kamut pasta and semolina pasta integral) has shown great dynamism with major increments.
Analysis of competitive environment by 5 forces
The market for pasta in Italy is characterized by the presence of many firms (129), most of which are managed at the household level. The industry is quite fragmented: most of the market is covered by Barilla that imposes itself as the absolute leader, followed, with much lower shares, by other national competitors.
De Cecco carefully selects its suppliers, which are mainly foreign (83%).
All suppliers are required to meet sustainability standards required by the company that gives great importance to the regulations on