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Italian Exports (2008)
"Currently the most relevant sectors for Italian exports are in manufacturing, fashion, gastronomy and technology"
Fashion, luxury and foodstuffs…these are the leading sectors for the diffusion of Italian brands abroad, with expansion systems that are as agile and flexible as franchising. The historical survey of the study centre Luigi Einaudi and Sisim underlines that amongst the most global brands there are, Max Mara, which operates in 61 countries, 3rd behind the French Yves Rocher (in 68 countries) and Lacoste. The first business model for the internationalisation of franchising was implemented by the fashion brands: from simple stylists to multifunctional complex structures, able to integrate the in-house know-how, with the distributors’ and advertisers’ experience.
The best outcome achieved by the Italian brands has been to convert the notoriety of the trade names into models, banners and distributive formats recognisable worldwide. Globalisation has removed the gap existing amongst the national differences of the consumers addressed.
In fact, starting from the Western countries and spreading to East Asia, Eastern Europe and the Emerging economies, the generalised rise in purchasing power and the wider offer of branded goods at low prices, has allowed the vast majority of buyers to access the golden world of fashion brands.
Beside the above there are production and distribution firms that manage their own commercial network, exploiting an organisational and logistical know-how based on strategies completely different from the ones implemented by the large fashion enterprises like Coin, Benetton, Stefanel and Calzedonia/Intimissimi. The main penetration strength and the competitive lever have been represented by the knowledge of a specific market. Coin’s driving markets are Italy and Germany. Stefanel was gaining 74% of its turnover from its domestic market, but it is present in more than 22 countries, including Germany, Greece, Portugal and Taiwan. The survey mentioned above highlighted how from July 2000 to June 2001, investments by Italian brands had been mostly channelled in three foreign countries: Japan (with 67 new outlets), Germany (54) and the USA (42).
There are mature markets, such as the USA, where the product’s quality combined with tailored promotional activity, guarantees commercial niches for the enterprise, mainly in the textiles, technological and agro industrial sectors.
The “Mediterranean” market is, on the other hand, a territory requiring processes for an all-inclusive integration, non only on the economics stance, but also cultural, as by 2010, it will become a large free trade area, that cannot be assessed solely on commercial terms. In such areas, it is necessary to create the appropriate conditions for our SMEs, in order to be able to reduce production costs and also to transfer know-how to local firms, aiming at the implementation of co-development projects, for these entities to learn to walk on their own legs.
At present the most interesting sectors are the fashion, gastronomy and high-tech ones.
"The restorative-gastronomy franchising sector is still in its infancy, however Italian labels and food products are becoming increasingly visible"
For the franchising enterprises under scrutiny, highly vulnerable towards changes in consumers’ tastes, the protection of the distributive function has been successful, due to the acceleration of the textile/clothing cycle, the knowledge of the main market and the good outcome of the brand policy. For the fashion franchising enterprises it is necessary, to evaluate the “results” of their choices “on location” and in direct contact with the consumer, reducing to the minimum any image-related issues along the ideational-productive-distributive path.
The restorative-gastronomy franchising sector is still in its infancy, however Italian labels and food products are becoming increasingly visible. Through franchising and its respective commercial agreements, entering an international market brings competitive advantages in terms of Brands and company image and many benefits implying a market penetration at lower costs.
Franchising is different from other forms of agreements, given its capability to enter into force for the joint pursuit of a common mission, employing the knowledge and experience transferred by the franchisor enterprise:
» Securing pre and post sale services by complying with the local needs but, above all, attaining growth rates in shorter time spans and transferring part of the investment burden to their own partners;
» Attaining economies of scale;
» Creating entry barriers;
» Accessing IT resources;
» Overcoming entry barriers;
» Sharing the work and the risks, splitting the turnover amongst several markets with different characteristics and rhythms.
Internationalisation of small enterprises More than 90% of Italian exporters are small enterprises. The average size within this sector has gone down over time: from 10 to 9 employees between 1996 and 2003. Rather than a real streamlining within the enterprises, the result can be best interpreted as a clear sign of an improved accessibility to international markets and the entrance of new exporters. Analysis of exports by sector shows that SMEs’ influence is particularly marked in the services industry. Operators of limited dimensions determine large volumes of exports in wholesale trade, with a share greater than 80%. Microenterprises play a leading role, with 45% of Italian exports, compared to an average level of 10%.
The share of small enterprises, on average 22.7%, is 40% greater in the wood, leather and shoe industries. Significant quotas, always above 30%, are recorded in the textiles, furniture, clothing, foodstuff and building products industries. In these sectors, SMEs shares have markedly shrunk over the past two years, probably due to a wider exposure to international competition of emerging countries. Amongst the other sectors, only the electrical and electronic equipment sectors have experienced a rise in their shares (almost 2%). As for exports, the most relevant sectors are wood and wood products, where the share of small enterprises (in terms of employees) is above 40%, and the textile, clothing, leather and shoe sectors with shares between 12 and 20%. The strong propensity to internationalisation, therefore, seems to confirm the endeavour of small enterprises in keeping competitiveness in their own sectors of specialisation.
Official Figures from the Ministry for Foreign Affairs on the Internationalisation of the Italian System:
» Rapporto Ice
» Capitalia (2002), Indagine sulle imprese manifatturiere Ottavo rapporto sull’industria italiana e la politica industriale
» Unioncamere (2005), Le piccole e medie imprese nell’economia italiana Rapporto 2004
» Formez (2004), La governance dell’internazionalizzazione produttiva Quaderno n.27
» The Unioncamere-Mediobanca report on medium industrial enterprises has documented as the turmoil, in other words upward and regressive movements amongst the different types of enterprises, has been increasing over the past years and, in general, has mainly concerned growth processes.
» Rapporto Sisim- Enaudi
» Sole 24ore
» Italia Oggi
Written by Federico Fiorentini
BRD Consulting Company, Italy