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IGUZZINI CASE STUDY
Transcript of IGUZZINI CASE STUDY
Competitive Advantage Formula
The company’s competitive advantages are based on a number of key drivers in development:
The internationalization process started 30 years ago. Nowadays the company has 17 foreign
departments in- and outside of Europe.
Between 2002 and 2010 branches in China,
Singapore, Hong Kong, Macao, Taiwan, Russia, Dubai, North America, Sweden, Finland and
Turkey were established.
The "China Project' is prominent among the most important internationalization projects. This project, however, requires commitment and planning. The decision to open a production plant in China was based on a careful assessment of the level of technological expertise which the network of local suppliers would be able to be able to avail of.
In the Chinese market: competition of local producers (in price terms).
Internal: loss of control over the growing complexity of the company’s management culture
iGuzzini was one of first companies in Europe whom paid great attention to the beneficial aspects of eco-sustainability and energy saving.
Pioneered in effectively combining high quality technological performance and design.
Continuation of reinterpreting the products over time based on customer needs and market change.
Collaboration with leading lighting designers was of crucial importance for the fine-tuning and implementation of this change in culture, organisation and market approach, as was the definition of two strategies successfully pursued by the company:
extensive ongoing training
communication of the brand
All iGuzzini processes are managed and controlled by the standards of quality and continuous improvement; Likewise, the company availed of two laboratories (one regulatory and one photometric) certified by the Italian Quality Mark (IMQ), aimed at ensuring the safety of its products.
IV. Organizational Structure
The organizational system that is based on an interfunctional type of model is supported by a significant Human Resources structure that handles growth, training and development of resources both internally and in the branches.
The system of training and development of human resources developed by iGuzzini offers not only the opportunity to enhance specialist skills, but also aims to develop soft skills and management expertise at different levels of management
Nikola Bezobchuk, Mattia Cavattoni, Grace Hernandez, Alessandro Stabilini, Stephan Westernstroer
The third generation of an entrepreneur's family founded this company after the WWII.
First they sold acrylic lamps in houseware and giftware shops, which were also run by family members. The main focus for the Guzzini family was that design and direct communication should be intangible values. Products were presented in efficient ways thus allowing themselves to grow in the market in comparison to other italian light companies. Guzzini's interest in exploring foreign markets allowed the company to change from a "make-to-stock" production to an "assembly-to-order" or "make to order".
With hopes to reach an international market, Guzzini also decided to make joint ventures in geographical strategic places, e.g. Yugoslavia to supply the eastern European market. Later on, the focus was more directed to Asia.
The lighting industry has been undergoing a transformation and although this can lead to a vast array of technolgical advances it can also attract new strategic and organizational challenges. A few advantages of LED techonology can be categorized as follows:
Significan energy saving
Longer lasting life than traditional light sources
Reduction of energy requirements and CO2 emissions
Market Growth Rate
The market has grown exponentially, increasing by 400% between 2005- 2010. In Europe, the installation of devices that use LEDs as a light source increased in 2011 by almost 60%.
We can predict that...
A. Greater vertical concentration of the industry will occur.
iGuzzini owners now have to rethink their product-market mix in order to embrace the opportunities offered by new technology.
All while also maintaining and developing traditional production, which has achieved a certain level of excellence.
B. There will be a diffusion of small assembly enterprises.
A small number of large groups that, until few years ago, produced light sources and currently produce LED
They are integrating downstream by acquiring enterprises that specialise in the production of lamps and elettronics.
Small businesses are developing in European countries which are able to assemble LEDs on an artisanal basis.
The process of developing a new product is also important to the competitive advantage formula:
iGuzzini operates in the four lighting product sectors; residential, commercial, outdoor, and industrial. (diverse product portfolio)
Development and the internationalization process were executed thanks to the direct communication through participation in economic and cultural events.
Change of business: refocused emphasis on brand and intangible values.
Creativity and the open innovation model are based on team collaboration. Monitoring the sales performance each 6-12 months.
Flexibility to pass from an artisan to an industrial enterprise.
Reorganization: incorporation of the logistics, production and purchising department (somewhat of a vertical integration).
Good network of subcontractors, assemblers, and sub-suppliers of finished products.
Transition from concept of OBJECT to that of DESIGN:
Rethink sales chain
Creation of a global culture
Development of IT and Human Resources structure
This process enables skills to become established which generate efficiency and innovation over the long term .