Barilla SpA - Harvard Business Case Analysis

Essay by dyerean929University, Master'sA, June 2006

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* Mature product by 1990. Little or no growth domestically (Italy)

* Export market experiencing large growth (20-25% per yr in European countries)

Expect 2/3 of new demand from Eastern European market. Demand is high because they wanted low-priced basic food products

* Limited or no seasonal demand

* Highly competitive domestically over 2000 pasta manufacturers in Italy. Declining margins.

* Pasta market is extremely price sensitive.

* Barilla is the market leader in Italy and is the industry's largest manufacturer.

* Supply chain represents approximately 55-58 calendar DOH of dry goods (30 in the CDC, 14 at the Distributor, 11-14 at the Supermarket or Independent Shops)

Competitive Strategy

* Barilla is the largest pasta manufacturer in the world (35% of market in Italy and 22% of market in Europe)

* Also 29% of the Italian bakery product market

* Vertically integrated - owned mills, pasta/bread plants, and distribution network

* High quality product

* Largest and most advanced manufacturing facility (Pedrignano plant)

Focus is on developing most efficient production methods for existing and new products.

* Will increase focus on export opportunities.

* Creative marketing campaigns

Large scale advertising programs promotions. Also, selling in cardboard box with a recognizable color pattern created strong brand name recognition and image for their pasta.

Enjoyed a strong brand image in Italy

* Product mix

Fresh products - 21 day shelf life

Dry products - long shelf life 18-24 months, medium shelf life 10-12 weeks (75% of Barilla's sales)

800 dry SKU's; 470 pasta SKU's from 200 pasta shapes.

Pasta SKU differentiation by packaging.

* Plans to exploit new market opportunities in Eastern Europe.

* Focus on high volume manufacturing.

Distribution Network

Barilla Manufacturing Plants


Barilla CDC or Barilla depots


Distributors (GD's or DO's)


Supermarkets, Small Independent Shops...