Us Nero Giardini
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PAULO ALVES – CARLO FOCE – ZHONGHUA LIU
INTERNATIONALIZATION PLAN TO THE USA
NERO GIARDINI
HOW TO DO BUSINESS IN THE USA
Slide 2
INTERNATIONALIZATION STRATEGY
1
2
3
4
OVERVIEW
COMPANY’S DESCRIPTION
US FOOTWEAR OUTLOOK
MARKET ATTRACTIVENESS
5
RECOMMENDATIONS 6
AGENDA
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- SHOES INDUSTRY
- MEDIUM-HIGH SEGMENT
- 100% MADE IN ITALY
- REVENUES OF €230 MILLION
- PRESENT IN 8 EUROPEAN COUNTRIES
- STRONG BRAND REPUTATION
OVERVIEW
Slide 4
COMPANY’S DESCRIPTION
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HISTORY
1975FOUNDATION
1990RESTRUCTURATION
1998UNIQUE
SHAREHOLDER
2005BUSINESS
INTERNATIONALIZATION
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VISION, MISSION & VALUES
“100% MADE IN ITALY QUALITY AT AN AFFORDABLE PRICE”
“BECAME A MULTINATIONAL ITALIAN COMPANY EXPORTING ALL OVER THE WORLD”
“POWERING AND VALORIZING THE
COMPANY’S REGION”
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CORE COMPETENCIES
STRENGTHS
CORE COMPETENCIES*Value Creation
for the CustomerDifficult
To ImitateAccess
New Markets
Brand Reputation ✓ ✓ ✓
Quality Management ✓ ✓ ✓
Production Cost Management ✓ ✓ ✓
Wide distribution Channel ✓ ✓ ✗
Fashionable Product Line ✓ ✗ ✗
* In order to be considered a core competency it must fulfill the three dimensions
RESOURCES HUMAN -‐ 300 SPECIALIZED MANPOWER
ORGANIZATIONAL -‐ ECONOMIES OF SCALE, EXPERIENCE, AND SCOPE -‐ NEW LOGISTICS CENTER OF 12 000 MT2
FINANCIAL -‐ EXTRA CASH FLOW FROM THE LAST 10 YEARS
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OBJECTIVES
OBJECTIVE TODAY 2015
NEW FRANCHISING SHOPS 35 300
INCREASE EXPORT REVENUES 10% 35% -45%
INCREASE TOTAL REVENUES 230 MILLIONS 500 MILLIONS
NEW ABROAD FLAGSHIP SHOP 15 MILLION INVESTED 100 CHINA, 2 RUSSIA, 3 PRAGUE, 10 MOROCCO
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BUSINESS MODEL
VALUE PROPOSITION COSTUMER RELATIONSHIP
DISTRIBUTION CHANNELS
COSTUMER SEGMENTS
KEY RESOURCES
KEY ACTIVITIESPARTNERS
COST STRUCTURE REVENUE STRUCTURE
MAN – HIGH QUALITY ORIENTED
WOMAN – HIGH QUALITY ORIENTED
KIDS – HIGH QUALITY ORIENTED
MASSIVE ADVERTISING ON JOURNAL AND TV
RETAILS (81%)
FRANCHISING (16%)
FLAGSHIP STORE (3%)
PRODUCTION
QUALITY CONTROL
PROMOTION
BRAND
FACTORY AND ECONOMICS OF
SCALE
RETAILER
COMPONENT SUPPLIER
ADVERTISING AGENCY
FACTORY AND EMPLOYEE PROMOTION COMPONENT
SUPPLYEDDIRECT SALES
(3%)FRANCHISING SALES (16%) RETAIL (81%)
FASHIONABLE AND HIGH
QUALITY SHOES AT AN
AFFORDABLE PRICE
Slide 10
US VS. ITALIAN CULTURE
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HOFSTEDE
40
91
62
46
29
50
7670
75
34
Power Distance Individualism Masculinty/Femininity Uncertainty Avoidance Long-term orientation
United States Italy
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GLOBE
SOCIETY PRACTICES USA ITALY
PERFORMANCE ORIENTATION HIGH (4.49) LOW (3.58)
FUTURE ORIENTATION HIGH (4.15) LOW (3.25)
ASSERTIVENESS HIGH (4.55) HIGH (4.07)
HUMAN ORIENTATION LOW (4.17) LOW (3.63(
IT IS EASY TO MOTIVATE AMERICANS!
IT IS POSSIBLE TO BE MORE DEMANDING AND EXPECT MORE FLEXIBILITY FROM AMERICANS!
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HALL
Ronen and Shenkar (1985)
USA
- LOW CONTEXT
- MONOCHROMIC
ITALY
- HIGH CONTEXT
- POLYCHROMIC
Slide 14
US FOOTWEAR OUTLOOK
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DEMAND
US IS THE 2ND GREATEST CONSUMER OF SHOES IN THE WORLD
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DEMAND
- USD$48 BILLION INDUSTRY
- GROWING AT A RATE OF 1.8% PER YEAR SINCE 2008
- INTERNAL CONSUMER SPENDING EQUALS USD$20 BILLION
MEN'S&ATHLETIC&
20%&
WOMEN'S&CASUAL&17%&
WOMEN'S&DRESS&13%&
WOMEN'S&ATHLETIC&
10%&
MEN'S&CASUAL&9%&
MEN'S&DRESS&6%&
OTHERS&25%&
2012 FOOTWEAR MARKET SHARE BY TYPE OF PRODUCT
Source: Statisticbrain
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SUPPLY
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SUPPLY
MANUFACTURING
USD$2BILLION
CAGR (2008-2013) = -1.4%
RETAILING
SHOE STORES (54%)
GENERAL MERCHANDISE STORES (19%)
SPORTING GOODS STORES (7%)
NON-STORE RETAILERS (6%)
Source: IBIS world Source: StatisticBrain
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MAIN PLAYERS
REGARDING 2010 SALES
USD$4.8 BILLIONUSD$3.3 BILLION
USD$2.27 BILLION
USD$3.6 BILLIONUSD$20.86 BILLIONUSD$16.68 BILLION
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KEY SUCCESS FACTORS
ECONOMIES OF SCALE & SCOPE
ESTABLISHMENT OF BRAND NAMES
QUALITY
AUTOMATION
PLACEMENT
STYLE & INNOVATION
Slide 21
MARKET ATTRACTIVENESS
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PESTLE
POLITICALLY STABLE
LOWER TAXES
PROJECTED GDP GROWTH AT 1.7% RATE UNTIL 2015
STRONG URBANIZATION
LOWER EXPENDITURE WITH LEISURE
STRONG SYSTEMS AUTOMATION
SHORTER PRODUCT LIFECYCLE
FLEXIBLE LABOR CONTRACTS
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PORTER 5 FORCES
0.00
1.00
2.00
3.00
4.00
5.00
THREAT OF NEW ENTRANTS
THREAT OF SUBSTITUTES
BARGAINING POWER OF SUPPLIERS
BARGAINING POWER OF
BUYERS
RIVALRY AMONG EXISTING FIRMS
MODERATE COMPETITIVE LANDSCAPE
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COMPANY GOALS VS. US MARKET
OBJECTIVES (2015) US MARKET
REVENUE €500 MILLION - 2ND GREATEST CONSUMER IN THE WORLD
EXPORT REVENUE
35%-‐45% OF THE REVENUES - VALUE + LOWER TARIFFS + INSTITUTIONS
FRANCHISE 300 - ENTREPRENEURIAL BEHAVIOR + STABLE, SAFE AND CREDIBLE COUNTRY
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SWOT ANALYSIS
STRENGTHS WEAKNESSES
- Brand Reputation- Management Quality- Cost Efficiency- Wide distribution Channel- Fashionable Product Line
OPPORTUNITIES THREATS
- 2nd greatest footwear consumer- Similar Consumption cultures- Greater demand for quality, stylish
and innovative products
- Saturated and Slow Market Growth- Constantly Shorter Product Life Cycle- Demand is becoming less concerned
with material goods
Slide 26
INTERNATIONALIZATION STRATEGY
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GOALS
DECREASE MARKET EXPOSURE
DECREASE COSTS
ACQUIRE RESOURCES
STIMULATE BRAND AWARENESS
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GLOBAL INTEGRATION VS. LOCAL RESPONSIVENESS
NERO GIARDINI MUST CONSERVE ITS ITALIAN ESSENCE
CULTURE & HABITS
DESIGN & TASTE LANGUAGE SIZE &
PACKAGETECHNICAL
SYSTEMCLIENT &
APPLICATION
CONCEPT
PROMOTION X X X X
TECHNOLOGY X
PRODUCT X
ATTENTION: IT DOESN’T MEAN THE COMPANY DOESN’T NEED TO ADAPT TO THE CULTURAL DIFFERENCES FOR MANAGEMENT PURPOSES
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GLOBAL INTEGRATION VS. LOCAL RESPONSIVENESS
NERO GIARDINI MUST CONSERVE ITS ITALIAN ESSENCE
LOCAL ADAPTATION
LOW HIGH
GLOBAL INTEGRATION
HIGH
LOW MULTI DOMESTIC
- LOCAL TEAM
- CONTROL AND MONITORING FROM HEADQUARTERS
- PRODUCTS DEVELOPED FOR THE LOCAL MARKET AND THEN DIFFUSED TO US
Slide 30
RECOMMENDATIONS
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RECOMMENDATIONS
ACQUIRE THE SERVICES OF A LAW FIRM
GET IN RELATION WITH TRADE ASSOCIATIONS
SEEK FOR EXPERT AND CUSTOMER INSIGHTS IN US
FORM A LOCAL TEAM WITH A LOCAL MANAGER
LOCATE IN HIGHLY POPULATED CITIES
CLEARLY SET GOALS, AWARDS AND DEADLINES FOR THE US TEAM
Slide 32THANK YOU FOR YOUR ATTENTION
ANY QUESTION? COMMENT?