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Analysis of Boffi’s international strategy

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    Since its creation in 1934 Boffi became the Rolls-Royce of the kitchen and bathroom industry. Nowadays this is no more than 223 retailers in Italy and 115 retailers internationally outside Italy with three production areas (kitchen, bathroom and system). Thanks to its combination between modern production processes and artisan tradition, Boffi stand out the market and is known for its specific design and refine products. As a lot of firms Boffi needs to keep innovation at the heart of its strategy, that’s why a lot of designers are working for the firm. But even with a lot of innovation and creativity, its environment is changing really fast, that’s why they are confronted to a multiple issues and they need to be as reactive as possible. Created in 1934 by Piero Boffi, this Italian SME has done such a good road since its beginning, initially build in the district of Brianza, known for its Italian furniture’s producers, the company has been built in 1947, Piero’s sons (Dino, Pier Ugo and Paolo) were specialised in innovation, technology and design on products, the first production of modular cabinets for kitchen started one year later. The willingness of Dino was to work with designers to create added value, that’s why it’s not a surprised that today a lot of designers worked for Boffi.

    In the sixties Boffi hired Luigi Massoni, a famous Italian designer, as art director, his ambitions for Boffi were high, he wanted to do massive production and product standardisation. But ten years later Boffi used wood as core material and abandon the idea of Massoni which would have been using industrial materials. In the nineties, Roberto Gavazzi became business partner, in order to pass on his international experience in consulting and MNE’s. In the same years kitchens became trendy and an open place which was part of the house, customers’ needs weren’t the same, they had change, so Boffi’s adaptation to the market had to change too. At the end of the nineties, the firm diversified in the bathroom industry, in 1997 the “I fiumi” and “Minimal” bathrooms respectively designed by Claudio Silvestrin and Giulio Gianturco were successfully welcomed in the bathroom luxury market. The particularities of Boffi’s bathrooms were that the whole products and furniture’s were set up by the firm. Nowadays Boffi is present in a lot of countries and growth a little bit every year.

    Page 1

    II) Boffi’s strategy
    Boffi is a company in the Luxury market field, his main goal was to differentiate itself from the competitors, then their focus their strategy in high quality product and high prices, this strategy has too many advantage and also disadvantage for example, touching a particular kind of customer. Boffi has four main strategies in its activity.

    Product design: Products are made from famous designers who are known in the art domain, it allows making each product unique. Those products are in the influence of an art director who is a designer as well, tree of them are famous.

    Alliance: Boffi has alliance with high end brand. This partnership enhances its activity, and makes the brand some visibility in the international markets. In 2001 Boffi becomes a member of Foundazione Altagamma, an association of luxury Italian design companies who enjoy an International reputation. The main aim of the association is to promote Italian brands, style, culture worldwide.

    2003 Boffi made the acquisition of Nobert Wangen, a top quality kitchen brand (design kitchen and bathroom). Naoto Fukasawa collaborates as well with Boffi. Diversification: in the 1980 Boffi decided to produce and make bathroom because of the needs of customers. Bathrooms are considered has a private space having and taking more and more space in our modern society. Bathroom sector has low entry barriers because of less money spending, and it’s almost the same area (living place) as the core activity of the company which is kitchen. Kitchen sales represent in 2008 (72%) bathroom (27%) and systems (1%). Internationalisation and distribution: They are many reason for Boffi to expand, their main strategic drives are to:

    – Seek opportunities for growth through market diversification (part 3: diversification). Boffi enters the bathroom sector with the impulsion of Antonio Citterio (Art director) a synthesis between storage and high tech.

    Earn higher margins and profits; comparing to the product they are making, goods are extremely expensive. (Price for a kitchen, first price: 15 000 E, average prices: 50 000 E).

    Gain new ideas about product, in Japan they had to change their raw material (wood/eco-wood) production. It was very difficult there because of the country’s law. Afterwards they take the substitution material as theirs main material thank to its qualities.

    Boffi’s distribution is quite selective, the firm got few own stores (20) but also indirect stores, retailers in Italy and internationally as well.

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    III) Micro Environment

    Boffi set up a specific strategy in order to differentiate itself from the other competitors, its core activity is composed of three areas (kitchen, bathroom and systems in 2008). The thing is that in Italy, especially in the kitchen industry, they were 908 SME’s in 2008, the region of Lombardia where Boffi is located count a lot of artisans and industrials producers, so the firm has to deals with all those competitors and even make it strength. In the market luxury, Boffi is known for its knowledge in kitchen designing, and it is important to know what differentiate Boffi from competitors and what create their added value.

    1)

    Porter’s five forces

    In order to analyse Boffi’s internal environment, we used the five competitive forces of Michael Porter. The five forces are: the bargaining power of buyers/suppliers, the threat of new entrants, the threat of substitute products or services and the rivalry existing between competitors already present on the market.

    First of all, we decided to make an analysis of porter’s five forces in Italy, Boffi’s home country, because if we know its environment we can easily identify what create value. So we can begin with the bargaining power of buyers, which seems really low, because Boffi’s customers don’t have the choice when it comes to talk about adaptation, for example kitchen are the same all around the world, if the client wants a Boffi kitchen or even Bathroom, he will have the exactly the same model than another one. The only adaptations made by the firm are about legislation issues. Moreover, the average price of a kitchen is almost 50 000€ and negotiation isn’t possible (cost estimations). Then we can talk about the bargaining power of suppliers, which is also pretty low, because there are some agreements made with suppliers so they can’t negotiate that much, moreover there is a lot of possible suppliers in Italy, which means that if a supplier disagree, Boffi could find another one pretty easily. What about the new entrants now? As suppliers and buyers, the threat is very low, because there are so many SME’s in the sector of kitchens for example (908) which means that it is quite impossible for a company to stand out from competitors. The rivalry between competitors is quite high in Italy; we can identify three kinds of competitors (design-based companies, brand and production based companies and price-based companies). Boffi belongs to the design-based companies, and its main rivals in Italy are Arc Linea, Dada, Varenna, Schiffini and Valarcine. Finally the threat of substitution products is low, because Boffi belongs to the kitchen luxury industry and substitution is quite impossible in the areas of kitchen and bathroom. After this analysis of competitive forces in Italy, we chose to analyse the French market, because France was the first foreign country where Boffi expand its activity, France is known for its great gastronomy, that’s why Boffi’s first shop opened there. But this also means that the rivalry between competitors is one of the most important for Boffi. So we wanted to see if this is still an important place for Boffi and what threats are present there. First of all the rivalry between competitors is really high in France, maybe more than anywhere, as in Italy, there is a lot of competitors according to financial means, we can quote Bulthaup, Comprex, Cuisines SaintAndré, Effeti, Hardy Inside and so much more in the luxury field. That’s why the bargaining power of buyers could seems higher than in Italy, because French clients are really chauvinistic and the trend of the last years is to buy French brands, so sellers might adapt their strategy and maybe let the client negotiate a bit more than anywhere else, if Boffi wants to stay in front of competitors. Concerning the bargaining power of suppliers it’s quite the same than in Italy, the threat is pretty low because most of the suppliers are coming from Italy. Substitution of products and new entrants also are similar than Italy because the French market is saturated, which is ad hoc for a gastronomic country, and there isn’t any substation, because kitchen and bathrooms are basic goods.

    The French market represent 7% of Boffi’s consolidate turnover, which is not that much because it was the first country where Boffi expands, so they need to stay innovative and persuasive if they still want a place there.

    Finally, we analysed those same five forces in Asia, more specifically in Japan, where the kitchen market was a failure for Boffi the first time they try. The firm is located in no more than 14 countries in Asia, which means that we can find Boffi’s products all around Asia, but with no more than one store for 13 countries. Japanese kitchen market is constitute of a lot of Japanese and foreign brands. Customers are focus on quality and customers services, that’s why the bargaining power of buyers is pretty high in Japan, because they got high expectations for their kitchen and bathrooms, especially in the relationship between seller and buyer. Concerning the new entrants, the conclusion is quite the same than in France and Italy, the market is saturated, because there is a lot of Japanese brands, if we add foreign brands this isn’t a field where you can start your activity. So the rivalry between competitors is High, as important than in France and maybe more, because brand like Inax, Takara standard, Sunwave and National propose a lot of kitchen products, as well low prices as high-end brands, but for the luxury market, there isn’t that much of national competitors, quite the opposite high-end market belongs to foreign brands with innovative design. The bargaining power of suppliers doesn’t differ from Italy, because suppliers are the same (mostly Italian) and the threat of substitute products isn’t a high too because the products and services done are unique.

    2)

    Porter’s value chain

    After this Porter’s analysis, we decided to use another famous framework of him, the porter’s value chain. The value chain categorizes the generic value-adding activities of an organization, we can differentiate support activities from primary activity Here’s the value chain of Boffi:

    Support activities:
    Firm infrastructure: There is only one production factory, which is located in Brianza, conception and realization too.
    Human resource management: Boffy employees are more than 300, with specific training for sellers.

    Page 4

    Technology: Investment in R&D is important in order to be creative and innovative, sophisticated IT System (softwares).
    Procurement: Most of the suppliers are local suppliers in the region and in Italy, near to the factory of Lentate sul Seveso. Moreover there is some partnership with suppliers which guarantee the involvement of each parts.

    Primary activities:

    Inbound logistics: There is a small network of suppliers which provide the best raw materials. There isn’t much of storage cost because of just in time production. Operations: Boffi combine modern production and artisan tradition Outbound logistics: Boffi owns mono-brand stores, indirect stores and its distribution is quite selective because their kitchens and bathrooms aren’t sold in every shops, there is the stores that Boffi bought and the stores owns by independent which sell Boffi’s products. Marketing & sales: There are a reserved numbers of specific ads, in a very selective events like fairs or art events, where the product is not entirely presented, in order to create a need for customers.

    Services: Customers are advised by qualitative sellers, because they know how to share their passion of the product. The products sold could be fixing in case of problem (for example, the raw material called corian is easily fixable).

    3) SWOT, TWOX
    What is SWOT? This is “a study done by an organization in order to find its strengths and weaknesses, and what problems or opportunities it should deal with. SWOT is formed from the initial letters of ‘strengths’, ‘weaknesses’, ‘opportunities’ and ‘threats’.” http://oald8.oxfordlearnersdictionaries.com/dictionary/swot-analysis It is the tool with we can elaborate the strategy of a company. More we can understand what competitors do and can give “the insights you need to craft a coherent and successful competitive position […] and takes best advantage of abilities and opportunities of the company.” http://www.mindtools.com/pages/article/newTMC_05.htm

    Boffi’s SWOT
    Strengths :
    High quality of raw materials
    Sustainability concern  ISO certification
    14001; 9001
    Innovation, creativity and excellence as motto
    One of the leader of the international market

    Weaknesses:
    Rate
    Many kitchen competitors (designed-based companies, brand and production-based companies, price-based companies) Small numbers of retailers that were able to handle a product positioned in the high-end of the market in some countries  find the same passion, capabilities and technical

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    Collaboration with international and wellknown designers who know better the local needs and wait understanding
    No structured planning international settlement strategy

    Partnership with complementary brands (short period before “real settlement”)
    No adaptation to the different countries 
    Diversification (kitchen, bathroom  wellness same strategy, same production but different trend) => niche cultures
    Low level of competition in bathroom field.

    Many local artisans as competitors

    Low entry barriers and proximity of the core business of the company and step towards the final goal (entire living solutions)
    Add furnitures (light and wardrobe)

    Internationalisation and distribution (acquisition luxury niche brands or develop third product category)
    Open mono brand stores  direct control of client relationship
    Custom made
    Difficult to be imitated / immediately
    recognizable Training (Milan, London, NY, Amsterdam, Paris  training centres)
    Research for the perfect location before the opening Opportunities :

    Threats :

    Niche opportunity ( cross selling => entire
    living solution)

    German competitors
    Belgium  strong local production and taste
    more conservative.

    Investment R&D, communication
    Export sales = 65% of total turnover (in 2008)

    Great Britain  strict regulation for bathroom
    Denmark Japan settlement  strict local
    legislation and many cultural differences

    Application of some retailers for exclusivity
    Waiting time sometimes too long because of

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    Hotel

    the distance

    Sweden  no competition

    US  lack of specialized counterpart and
    strong technical regulation

    Introduce direct management of all countries
    United Arab Emirates

    Sweden  no knowledge and understanding
    of Made in Italy
    Very selective Communication

    TWOX analysis:
    This analysis combines the four SWOT elements to determine a better strategy. TWOX analysis uses strengths and weaknesses to take advantage of opportunities and both of them to reduce threats and to minimize weaknesses or avoid threats.

    Opportunities:
    Threats:
    1. Niche market
    2. Introduce direct
    management every where
    3. High investment in R&D
    4. Hotel partnerships

    1. Special regulations in many
    countries
    2. Long waiting time
    3. No knowledge and
    understanding of “Made in
    Italy” in some countries

    Strengths:
    1. Diversification toward
    entire living solution
    2. Mono-brands for better
    control
    3. Training centres
    4. Complementary brands
    partnership
    5. Collaboration with
    international and wellknown designers and
    architects

    Diversification
    (kitchen/bathroom) could be
    more develop and create a crossselling with an entire living solution  take an advantage of
    niche markets. (S1 & O1)

    The partnership with
    complementary brands even for a
    short period could be reduce the
    waiting time for long distance
    command.(S4 & T2)

    Introduce direct management
    through mono-brands stores
    which allow a direct control of
    client relationships. (S2 & O2)

    Collaboration with international and
    well-known designers and architects
    could reduce risks concerning local
    legislation and differences of
    cultures. (S5 & T1)
    Training centres could improve the
    knowledge and understanding about
    the “Made of Italy”, which is the
    core of Boffi’s strategy. (S3 & O3)

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    Weaknesses:
    1. Many competitors
    2. No structured planning
    for settlement strategy
    3. Italian production plants
    only
    4. Very selective
    communication

    IV)

    Boffi might develop their
    partnership with hotels to
    elaborate a structured planning
    for international settlement
    strategy. (W2 & 04)

    Boffi has to manage its unique
    Italian production to reduce the
    waiting of distant customers. (W3 &
    T2)

    The high level of R&D
    investment could depose most of
    competitors (maybe Germans)
    (W1 & O3)

    Boffi might improve its
    communication about their work to
    develop knowledge and
    understanding of “Made in Italy” to
    other countries (such as Sweden for
    example) (W4 & T3)

    Macro environment

    The macro-environment of BOFFI will depend of where products of the company will be sold. The PESTEL analysis will permit to define the extern environment of the firm. This tool is also necessary to analyse the Boffi’s strategy in some countries. For example, 3 PESTEL analysis will be necessary to study the market in France, Italy and Japan.

    PESTEL ITALY
    Political

    Economy
    Socio-cultural

    Technological

    Environmental

    Financial debt of 105.7% for the Italian state
    because of the corruption practiced by the
    most high rank of the state
    Economic crisis in Italy had provoked an
    increase of prices of 3.3% in Italy.
    Boffi know its home-market and can make
    benefit in Italy. However, Italians are in the
    obligation to limit their consumption because
    of this crisis in 2008. During this year, the
    variation of the consumption was of -0.8%.
    Italian furniture makers are specialized in the
    Design of kitchen. Boffi is ready to make in
    place a lot of innovation to stand out their
    Italian competitors
    Italy has a late compared to other European
    countries in term of sustainable
    development.
    This late is explained by the less of
    communication set up by the government.
    Therefore, citizens and companies are not

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    Legal

    used to respect sustainable development
    rules to protect the environment. However,
    Boffi is ready to set up measures for the
    sustainable development
    The Value Added Tax was of 15% in 1980
    and of 19% in 2008 to reduce the public
    debt.

    PESTEL FRANCE
    Political

    Economy

    Socio-cultural

    Technological

    Environmental

    Legal

    France knows currently a better politic stability than Italy, which is the home market of Boffi. However, the French government has some main goals to
    reduce the debt of the country, which was of 14.6 million of euros during the crisis of 2008.

    The French economy had a lot of difficulties to restart because of this crisis. Since these last years, the economy is in stagnancy because of the reduction of the consumption on the French market. The French people are interest by the Italian design.

    However, the financial debt in France is at the origin of the decrease of the French’s level life. They must cope with the increase of prices which was of 9.8% between 2007 and 2008.
    Therefore, Boffi can encounter a lot of difficulties on the French market to attract customers.
    French customers are attracted by the furniture market. But the reduction of their consumption of 0.8% has provoked the increase of the turnover of furniture companies. There are constraints to sell products on lower-end and make promotions on a lot of them.

    French people are seriously implicated in the sustainable
    development. For an example, they are ready to recycle and to reduce their electricity or water consumption. This implication is the result of communication campaigns set up by the French
    government. Because of rules that a lot of companies have to take, Boffi is setting up measures to contribute to the sustainable development.
    To restart the French economy, the government has voted rules on new taxes. For example, a new measure was set up to increase the tax rate of the insurance-life. The tax which was of 11% in 2008 has been of 12.1% the next year

    Page 9

    PESTEL JAPAN
    Politic

    Economy

    Social

    Technological

    Environmental

    Legal

    Japan is one of the few Asian countries to know a politic
    stability. Japan is a constitutional monarchy, however, the
    increase of the nationalism can give a bad image to the
    country and a lot of difficulties for foreign companies as
    Boffi.
    Japan is one of the best export countries of the world with
    5.38% of global exportation rate. But exportations have
    decrease since the crisis of 2008.
    In Asian countries as Japan, the culture is more different than European country (Several religions, language different,
    habits values and attitudes)
    For the Japanese market, Boffi must adapt their products to
    their trends, to the culture and review the legislation.
    Japan is known for its production of high-tech products as
    cell phones, robots or cars which are exported in foreign
    countries. Boffi should adapt their kitchens to the
    development of Japanese technology.
    Japan had set up a lot of ecological measures to contribute to the respect of the environment. Therefore, Boffi must adapt
    their products thanks to ecological systems the increase of
    pollution in 1950s.
    The Japanese government had voted strict laws to forbid the
    sales of some kinds of wood which are forbidden.

    The PESTEL analysis means that thanks to the innovative skills of Boffi, Italian and French customers should be attracted by their products. The
    implication of the firm in the sustainable development can also interest customers.

    However, because of the Japanese restrictions and the increase of taxes in Italy and France, the development of the Boffi’s activity was difficult in 2008. The reduction of the spending power had provoked the decrease of sales.

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    V) Conclusion/Recommendations
    Boffi’s life began with handicraft, with the worldwide internationalisation’s pressure they had to go abroad if they wanted to get bigger. However, they wanted to keep their core of craft experiences and started to combine it with designers and architects. So they mix modern production and kept artisan tradition. They manage to promote the “Made in Italy” in all the countries they set up. We saw throughout the study that they want to impose the Italian culture all over the world without any modification. That is the reason they failed in some country as in Japan for example because of the strict legislation and differences of culture. Nevertheless, they adapt a little their raw material (wood used for eco-wood) and they succeed by changing this constraint into opportunity because they decided to apply this new kind of wood to all their products.

    As the Boffi’s CEO Roberto Gavazzi said the adaptation is unnecessary and counterproductive:” we never adapt product design to different countries. Our offer in terms of lines, colours, materials is the same all over the world.“ So, we can understand that they have a home replication strategy. It is justify with the academic definition: “Home replication strategy is the international replication of home based competencies such as production scales, distribution and brand power. The company centralizes product development functions in its home country. After product differentiations are finished in home country, innovations will be transferred to apply in local market in order to capture and extend additional value.” (http://fr.scribd.com/doc/106649550/Home-Replication-Strategy) They want to stay in the luxury market and develop all their strategy around this goal
    with high investments in R & D to be the more innovative, search of perfect location to catch customers. Matteo Crippa assures that “it takes other companies two years to follow what we do, and by that time we’ve come out with something new.” Nonetheless, they want to keep all the production in Italy but it could represent a problem if they want to set up in a more distant country. Indeed, they don’t have a structured planning for its internationalisation’s strategy. They only focus on taste, trends, and cultures similar as the Italian’s. Maybe to solve the constraints they can meet, it could be interesting for Boffi to open a second plant of production to respond faster to the distant demands (as America or Australia).We could propose to Boffi to look after the United Arab Emirates (UAE) market. Indeed, this region is a developing area. Moreover, UAE has a great potential in term of new consumer, and could easily target a wide range of wealthy person. It could be a land of opportunities. Actually, the economy of the country is quite good especially with the financial impact thanks to oil on the region. People over there discovered not far ago the value of money and what we can do with. Since, they want to be the best in term of innovation and extravagance. Furthermore, there aren’t many competitors.

    The cultural aspect is not an issue because even if UAE has an oriental culture, people trends to westernization. So, Boffi could take the advantage of it and could be accepted easily. In that way, Boffi could improve the number of partnership with hotels which are an active and developing sector of activities. Many owners want to have the best of the best and are ready to pay. So, kitchens and bathrooms of Boffi could be improved as well as their exports too.

    Page 11

    References
    Macro environment
    http://www.actinnovation.com/innobox/outils-innovation/analyse-pestel http://www.insee.fr/fr/themes/tableau.asp?reg_id=98&ref_id=CMPTEF08336 http://economicresearch.bnpparibas.com/Views/DisplayPublication.aspx?type=document&IdPdf=21939
    http://data.lesechos.fr/pays-indicateur/italie/consommation-des-menages.html http://data.lesechos.fr/pays-indicateur/italie/taux-de-la-tva-applique.html http://www.lexpress.fr/actualites/1/economie/italie-l-inflation-au-plus-haut-depuis2008_1071702.html

    http://www.boffi.com/EN/FlagshipStoresAndBoffiStudio.aspx

    Micro environment
    http://fr.slideshare.net/JapanRetailNews/kitchen-market-japan-2009 http://www.cotemaison.fr/chaine-d/deco-design/boffi-cuisine-boffi-ce-qu-il-faut-savoir-surboffi_12669.html http://www.boffi.com/EN/Dealers/asia/china.aspx

    http://www.livemint.com/Industry/RtVTQn3LvsAw3IryI3qJ6J/Roberto-Gavazzi%E2%80%93The-basicBoffi-language-will-remain-in-In.html http://www.cotemaison.fr/cuisine/cuisiniste-le-nouveau-top-30-des-meilleurs-cuisinistes_3364.html http://designmafed.wordpress.com/2013/04/21/a-visit-to-the-boffi-showroom/ http://cuisinelove.com/lacuisineequipee/index.html

    But also: Presentation given by Coventry

    Page 12

    Powerpoint Presentation
    Slide 1

    International
    Marketing
    Strategy 301
    Dhoiffir Nayir:
    Loic Goossens:
    Margot Carreres:
    Régis Akpokli:

    5405417
    5395163
    5395071
    5405392

    Tutor’s name : Lilian Dorlencourt

    Slide 2

    Table of contents
    I. Who is Boffy?
    II. What is Boffi’s Strategy?
    III. Environmental audit
    A) Micro environment
    B) Macro environment (Success/failure)

    IV. TWOX analysis
    V. Conclusion / proposition

    Slide 3

    I- Who is Boffi?

     Created in 1934 by Pierro Boffi
     3 production Areas (kitchen,
    bathroom, system)
     20 direct stores
     50 indirect stores
     223 retailers in Italy
     115 International
     70.768.000 dollars in 2008

    Key numbers according to Boffi’s history

    Slide 4

    II- What is Boffi’s Strategy?

     Product design

     Alliances
     Diversification
     Internalisation and distribution

    Boffi is a company in the Luxury market field, his main goal was to differentiate itself from the competitors, then their focus their strategy in high quality product and high prices, this strategy has too many advantage and also disadvantage for example, touching a particular kind of customer. Boffi has four main strategies in its activity which will be explained in the 4 following slides.

    Slide 5

    II- What is Boffi’s Strategy?
    Product design
    Alliances

    Diversification

    Internalisation and
    distribution

     The product were the result of the collaboration with
    international and well-known designers
     An Art director coordinated the work of all the
    designers.

    Slide 6

    II- What is Boffi’s Strategy?
    Product design
    o partnership with complementary brands in the high end
    Alliances

    Diversification

    Internalisation and
    distribution

    o Aim a International Market
    o Living concept

    Slide 7

    II- What is Boffi’s Strategy?

    Alliances

     In the 1990 Boffi decided to
    enter in a new field, the
    bathroom, under the same
    brand

    Diversification

     Bathroom  strategic
    business area

    Product design

     In 2008 Boffi’s product
    Internalisation and offer was composed by
    distribution
    Kitchens(72%), bathrooms
    (27%) and systems (1%)

    Slide 8

    II- What is Boffi’s Strategy?
    Product design
    Alliances

    Diversification

    Internalisation and
    distribution

     Boffi wants to develop a retail structure of monobrand stores to carry Boffi style and philosophy around the world
     Boffi’s distribution is based on direct Boffi stores,
    indirect mono-brand Boffi stores, retailers in Italy and
    internationally

    Slide 9

    III- Environment Audit
    A) Micro environment

     Porter’s five forces

     Porter’s value chain

    Slide 10

    III- Environment Audit
    A) Micro environment
    Porter’s five forces

    Bargaining power of buyers: LOW
    – Average price of a kitchen (50 000€)
    – Same products all around the world
    – Few specific adaptation
    Bargaining power of suppliers: LOW, MEDIUM
    – Agreements with suppliers
    – Italian suppliers are multiple

    Porter’s value chain

    New entrants: LOW
    – Market is saturated
    – Cost too important( R&D)

    In order to analyse Boffi’s internal environment, we used the five competitive forces of Michael Porter. The five forces are: the bargaining power of buyers/suppliers, the threat of new entrants, the threat of substitute products or services and the rivalry existing between competitors already present on the market.

    These 2 slides represents the Boffi ‘s situation in Japan.

    Slide 11

    III- Environment Audit
    A) Micro environment
    Porter’s five forces

    Rivalry between competitors: HIGH
    – Japanese brands (Inax, Takara standard, Sunwave)
    – Foreign designed brands

    Threat of substitution products: LOW
    – In luxury substitution is quite impossible

    Porter’s value chain

    Slide 12

    III- Environment Audit
    A) Micro environment
    Porter’s five forces

    Porter’s value chain

    The value chain categorizes the generic value-adding activities of an organization, we can differentiate support activities from primary activity

    Slide 13

    III- Environment Audit
    A) Micro environment
    Porter’s five forces

    Firm infrastructure:
    – Conception, production and realisation in Brianza, Italy
    – Shops in 3 continents
    Human resources management:
    – More than 300 employees
    – Specific training

    Porter’s value chain

    Slide 14

    III- Environment Audit
    A) Micro environment
    Porter’s five forces

    Technological development:
    – Investment in R&D Creative & innovative
    – Sophisticated software

    Procurement:
    – Local suppliers
    – Partnerships

    Porter’s value chain

    Slide 15

    III- Environment Audit
    A) Micro environment
    Porter’s five forces

    Inbound logistics:
    – Small network of suppliers Raw materials of quality
    – Low storage cost Just in time production
    Operations:
    – Mix of modern production/artisan traditions

    Porter’s value chain

    Outbound logistics:
    – Mono-brand stores, indirect stores
    – Selective distribution

    Slide 16

    III- Environment Audit
    A) Micro environment
    Porter’s five forces

    Marketing & sales:
    – Reserved numbers of ads
    – Specific events (fairs, art)
    Services:
    – Qualitative sellers
    – Customers after sales service

    Porter’s value chain

    Slide 17

    III- Environment Audit
    B) Macro-environment
     PESTEL Analysis in:

    -Italy
    -France
    -Japan

     Advantages for Boffi

     Drawbacks for Boffi

    Slide 18

    III- Environment Audit
    B) Macro-environment

    Advantages for Boffi

    POLITIC

    *Politic Stability in countries of commercialisation
    *Increase of nationalism in Japan

    ECONOMY

    PESTEL analysis

    *Economic crisis in these countries because of their debt

    SOCIO-CULTURAL *Consumption limited by population because of crisis in these countries
    *Difference of culture in Japan

    TECHNOLOGICAL *Development of innovation in these countries

    ENVIRONMENTAL *Campaign of communication by governments for the sustainable development

    Drawbacks for Boffi
    LEGAL

    *Increase of taxes rate in Italia and France
    *Strict laws to protect the local industry of Japan

    The macro-environment of BOFFI will depend of where products of the company will be sold. The PESTEL analysis will permit to define the extern environment of the firm. This tool is also necessary to analyse the Boffi’s strategy in some countries. We combined the analysis of 3 countries: France, Italy and Japan.

    Slide 19

    III- Environment Audit
    B) Macro-environment
    PESTEL analysis
     Customers attracted by innovative products of Boffi in
    Italia and France
    Advantages for Boffi
     People in favour of ecological systems of Boffi

    Drawbacks for Boffi

     Sales should increase thanks to the return of the
    economic stability

    Slide 20

    III- Environment Audit
    B) Macro-environment
    PESTEL analysis
    ˣ Difficulties of adaptation on the Japanese market
    Advantages for Boffi

    ˣ Decrease of sales because of the reduced consumption

    ˣ Legislations brake the activity of Boffi
    Drawbacks for Boffi

    Slide 21

     IV- TWOX analysis

    Slide22

    Opportunities
    1. Niche market
    2. Introduce direct management worldwide
    3. High investment in R&D
    4. Hotel partnerships

    Threats
    1. Special regulation in many countries
    2. Long waiting time
    3. No knowledge and understanding of « Made in Italy » in
    some countries

    IV- TWOX Analysis

    Strengths
    1. Diversification toward
    entire living solution
    2. Mono-brands for better
    control
    3. Training centres
    4. Collaboration with foreign
    and well-known designers
    and architects
    5. Complementary brands
    partnership

    Diversifivation towards creation of entire living New alliances with complementary brands  reduce the waiting time. (S5 & T2)
    solution  advantage of niche markets. (S1 & O1)

    Weaknesses

    Well handle with its unique plant of production 
    Hotel partnership elaboration of a structured reduction of the waiting time for distant customers. ( W3 & T2)
    planning of settlement (W2 & O4)

    Direct management through mono-brands stores  Collaboration with foreign designers and architects  better control of client relationships. (S2 & O2)
    reduce local legislations issues and analyse easier the
    differents cultures. (S4 & T1)
    Trainning centres  improve knowledge and
    understanding of « Made in Italy ». (S3 & O3)

    1. Many competitors
    2. No structured planning for
    settlement strategy
    High R & D investments  competitors supplanting. Improve the communication  develop knowledge and understanding of « Made in Italy ». (W4 & T3)
    3. Italian production plants (German?!) (W1 & O3)
    only
    4.Very
    selective
    communication

    The SWOT is the tool with we can elaborate the strategy of a company. More we can understand what competitors do and can give “the insights you need to craft a coherent and successful competitive position […] and takes best advantage of abilities and opportunities of the company.” http://www.mindtools.com/pages/article/newTMC_05.htm

    This analysis combines the four SWOT elements to determine a better strategy. TWOX analysis uses strengths and weaknesses to take advantage of opportunities and both of them to reduce threats and to minimize weaknesses or avoid threats.

    Slide 23

    V- Conclusion/ Proposition

     Modern production combine with
    artisan tradition.
     Constraints turns into advantages.
     Home replication strategy.
     United Arab Emirates:
     Wealthy people
     Westernisation of the culture

    Slide 24

    Thank you for listening, if you have
    any questions, don’t hesitate.

    Slide 25

    References

    Macro environment
    http://www.actinnovation.com/innobox/outils-innovation/analyse-pestel http://www.insee.fr/fr/themes/tableau.asp?reg_id=98&ref_id=CMPTEF08336 http://economic-research.bnpparibas.com/Views/DisplayPublication.aspx?type=document&IdPdf=21939 http://data.lesechos.fr/pays-indicateur/italie/consommation-des-menages.html http://data.lesechos.fr/pays-indicateur/italie/taux-de-la-tva-applique.html http://www.lexpress.fr/actualites/1/economie/italie-l-inflation-au-plus-haut-depuis-2008_1071702.html http://www.boffi.com/EN/FlagshipStoresAndBoffiStudio.aspx

    Micro environment
    http://fr.slideshare.net/JapanRetailNews/kitchen-market-japan-2009 http://www.cotemaison.fr/chaine-d/deco-design/boffi-cuisine-boffi-ce-qu-il-faut-savoir-sur-boffi_12669.html http://www.boffi.com/EN/Dealers/asia/china.aspx

    http://www.livemint.com/Industry/RtVTQn3LvsAw3IryI3qJ6J/Roberto-Gavazzi%E2%80%93The-basic-Boffilanguage-will-remain-in-In.html http://www.cotemaison.fr/cuisine/cuisiniste-le-nouveau-top-30-des-meilleurs-cuisinistes_3364.html http://designmafed.wordpress.com/2013/04/21/a-visit-to-the-boffi-showroom/ http://cuisinelove.com/lacuisineequipee/index.html

    But also: Presentation given by Coventry

    Analysis of Boffi’s international strategy. (2016, Jul 14). Retrieved from https://graduateway.com/analysis-of-boffis-international-strategy/

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