Item #1: Garlic press – Unsuccessful- 1.49

Found garlic, but no press

Item #2: Burgundy shoe polish- Partial Success- 2.60

Burgundyish polish

Item #3: Organic long-life (UHT, or non-refrigerated) milk in a tetrapak (1/2 liter). Success- 60 cents

As organic as it gets

Item #4: Organic or cage-free natural eggs, brown (small pack of 6) Success- 1. 59

Organic eggs

Item #5: Honey roasted cashews (small canister, not more than 250 grams) Partial Success- 2.49

Honey roasted something

Item #6: Arugula (1 bunch) Rucola, Success- 1.70

Rucola or Arugula- same green thing

Group: Sapna, Natasha and Akin

Here is the clandestine shot of the establishment.

Disclaimer: The opinions of the evaluators were in no way swayed by the free scarf and the face cap given to them, which were generously offered, after we expressed our admiration for the gelato.

Where you get the best Gelato

Cellini’s core competency is the production of the bike frames. They maintain the production of steel bile frames in Italy; the carbon fiber market is managed to agreement with ODM firms in Taiwan who turn them out much faster than in house. Quality concerns are always present.

Cellini bike frame business developed from a furniture making business, which no longer exists.

The owner of the company is the only person even willing to consider a sale of his company, which he has done once before, but for the right price. It is unclear if the company would be able to survive in the current environment of being pressured by competitors in the carbon market, but there is hope in the steel alloy frame segment due to the expertise of the firm

Pariani.

A saddle making company which had a disastrous venture into US market but is still associated with prestige in equestrian sport. Challenges are the limited ways to remind the market about its quality and prestige. The company is encumbered with extremely slow process of producing the saddles, wrong positioning with the starter versions.

The company has to find a way to remind its target segment about the true prestige of owning a saddle made by Parriani. On the VRIO it clearly appears that although the Reputation of the company is valuable, rare hard to imitate the company is not obtaining the profits from it.

The company sells a dream of a stylish car, through the design of the car’s carbon fiber aerodynamic shape. The super car segment represents the highest niche positioning possible and is supported by the handcrafted exclusivity of owning a super limited release car of no more than a 100 or less units per model.

The company is experiencing growth due to the demand for extreme exclusivity of its luxury product.

The value proposition, for lack of a better word, is the combination of high level engineering with engines and transmissions provided by companies like Mercedes Benz and the handcrafted process of creating the carbon fiber body.

Unusually for the car industry, the car’s carbon fiber body is produced or ‘tailored’ by young women.

The quality is meticulously checked through each step of the process. The company is on the growth trajectory with ramping up production from 17 cars a year to 40, with a very long waiting list of clients.

With an average profit of over a million euros per car, the margins are extremely attractive and would keep the company viable for considerable period of time (at least as long as the demand for super luxury product remains high)

Lamborghini- Manages to produce a custom made car on a mass production line,

Yet manages to have an 18 month waiting list for its products, has gone through a number of owners and has underperformed under them until being acquired by Audi. Acquisition of Lamborghini appears to be a very astute move by the German company, which is seeking to overhaul Benz and BMW in the premium car segment.

Audi introduced the automated production line process which increases the efficiency of the production, implemented several cost cutting manufacturing innovations from its experience, and produces the body of the cars in Germany.

The average cost of a Lamborghini Gallardo, the current flagship vehicle for the company is 340,000 euros, with the aggressive cost cutting measures introduced by the Audi management the margins are well above %50.

Lamborghini seems to occupy an interesting niche of being considered a less prestigious product than Ferrari or Bugatti, yet being the go to car for clients/ celebrities desiring to flaunt their wealth (new rich) With the 18 month waiting list for their vehicles, which the company is not attempting to shorten through increased production Lamborghini brand, would be highly profitable. Yet again the surprising feature is that despite huge inefficiencies in production, considered anathema in US, the company seems to far outperform its foreign peers.

Dallara- The fastest cars on track, just for the love of it. Why chase money?

Maker of Indy racing cars is extremely adept at engineering high performance cars, especially in terms of aerodynamics. Owns a performance car wind tunnel for a long time the exclusive owner, but is now on the declining track in terms of sales. Racing industry is downsizing, and they are not in the high value segments of the industry F1 and Nascar. Their consultancy services are limited in scope and are likely to be taken over by the internal R&D departments of its clients. High tech prototyping lines offer a lucrative line of revenue. But they have not been able to convincingly enter into super car luxury segment where the margins are much higher.

The GM of the company seems to question the entire notion of Growth for Growth sake,

He asked a pointed question- Why sell a company? What is the rationale for incessant chase of profit if it can result in the loss of a soul?

Dallara’s and many other Italian firms’ desire is the gradual managed growth of sales and they would easily turn down higher profit projects with limited knowledge potential for the sake of ensuring the position as the leader in industry’s research cutting edge.

Considers perfumes as conveyors of experiences and personality of the person, place or company.

Core competency is ability to mix scents in customized manner without the mass production mixes, with much higher percentage of essences used. Company produces about 50,000 bottles and consults for high fashion houses.

The owners felt that it is important to grow in a ‘proper way’ i.e. not too fast and maintain the true artistic nature of the perfume.

The opportunities for growth for Leonardo Villarossi could be multipronged:

1. Partner with a fashion house Versace/Prada etc to sell much more perfumes under license. And hence not bother with marketing costs and distribution channels.

2. Set a partnership with a large distributor in new markets seeking a prestigious brand.

3. Set up flagship stores of Villarossi, to sell several products in one location.

The production currently has very little slack in terms of the number of perfumes that could be ramped up.

Santa Maria Novella- Masters of diversified exclusivity.

The oldest fragrance maker in the world- 1612A.D.

50 model stores and 150 franchises carry a vast range of products from Liquor to Candles. Spend no money on advertising, create the pull of advertises offering a free advertisement.

GM says that” the sales are a natural process of doing things right, so we don’t have to worry about it”

SMN keeps innovating and producing new lines of products from stem cells in cosmetics to food supplements.

The impediment to growth is the high taxation rate of up to 65% of revenue, but yet the company still manages to stay profitable and barely meets the enormous demand for the product around the world.

The company is steeped in traditional way of making the product and extreme measures to ensure the product if of the highest possible quality.

A producer of the finest Brunello through the use of a completely natural winemaking process was established in the 70’s after extensive research by its founder. The company believes in intensive research into factors that are responsible for the production of the best grapes possible: microclimate, water sun and selection processes.

The wine is produced as a reserva  and the volume of bottles sold is capped at 15,000 out of permitted 50,000 bottles. Very exclusive model of sales, made available only to a select few clients and distributors, with whom the owner has a relationship.

Col D’Ocia

A major producer of fine wine, from Brunello to Chardonnay, is built upon the rich history of the property and the region. The company owns vineries around Tuscany and other parts of the world.

Concentrates on offering a range of products and seem to be adept at adding a flavor to the wines and accelerating the process of maturing the wine.

More focused on volume and cost leadership in the fine wine segment.

The company is owned by the family count but has a management team taking care of the day to day operations in several vineyards.

Castello Del Trebbio

Produce 3 main types of wine; Chianti, Rufina, View Santo, aside from wine making they also produce extra virgin olive oil, through a traditional process which excludes the mix of lower grade oil to attain the 0.8% maximum acidity level as practiced by larger manufacturers. The 3 grades are classified as Frontoyo, and Allora (the two grades that the company produces) and the 3rd low quality stage is the one most associated with olive oil. They currently do not produce sufficient amount of olive oil to meet the local demand alone.

The company also provides consultancy for vine field construction and supplements income through guided tour of their.

Anna the owner of the company says that “she truly feels rich, solely because she does what she loves.”

The main take away from the first presentation was that Italy is stagnating and in some cases experiencing a sharp recession as compared to its pears.

The reasons presented were divided in to external forces; IT growth and lower costs, Globalization pressures, EU integration. Internal reasons; larger than EU average percentage of family owned companies in Italy impede the transfer of best management practices, limited access to venture capital and private equity also significantly lowers growth.

It appears that the hypothesis put forward by the presenter about the need for exogenous factors to change for Italian firms to stay competitive is simply unattainable and that significant structural changes in management practices of small and medium enterprise is required for Italian economy to remain viable in the long term.

Previous recessions were overcome by devaluation, but not now.

Investment in R&D has decreased and leads to loss of competitiveness.

R&D investment 1.2% against the 2% EU average and the private family owned Italian companies invest even less into R&D at about 0.5%

There are very few MBA’s managing small and medium sized enterprises in Italy, hence poorer management practices within organizations further limits growth.

The studies show that In Italian SME’s loyalty is rewarded ahead of innovation and results

Venture Capital and Private Equity markets are not fully developed; forcing companies to grow using internally generated cash.

Further limitations for growth in Italian economy; are the limited investments into Human capital, quality of infrastructure, high taxation rates, combined with inefficient bureaucracy

To make Italian economy more competitive there is a clear need for structural reforms, according to the executives of Central Bank of Italy. The structural reforms should take a form of Reallocation of financial resources, active encouragement of competition, stimulation of firm’s growth through the use of innovative finance

It was a special honor to have the owner of the company- Antonella de Simone, personally welcome us to their company. We saw the famous tailoring school, where a couple dozen students are undergoing intense apprenticeship program, knowing that only 3-4 of them would be selected for a further year of master tailor training.

The company prides itself in the craftsmanship of its suits, every single one of the 20-40 thousand stitches are hand-sewn, every cut made by scissors to produce a suit of unparalleled quality.

But just like any company that has been at the pinnacle of its industry for several decades, the company has to continuously reinvent itself to remain at the top.

The growth opportunities for Brioni, are essentially limited to two possible options; 1. Find means of gaining new clients either through new markets or 2.reaching the younger generation. With the constraints of limited availability of external financial instruments (due to peculiarities of Italian banking) for aggressive marketing, Brioni has to essentially generate growth with its internal resources. Two options would make sense:

Option1. Capitalize on reputation for superior luxury fashion and develop a second line “Brioni Lite”, not unlike Armani Exchange to reach the mass markets more effectively. The rationale behind this choice is that the same quality of a product can’t be offered to a larger market, without alienating the core clients and with the associated high overheads

Option 2. Develop a Casual clothing line for men that would allow the core clients access to the same quality translated to their daily live away from the board rooms and gala events.

None of the options appear to be attractive to the owners, but at some point the company has to make a clear strategic choice on how they plan to climb out of financial dull-drums.

The shopping experience in Italy, as in much of Europe, is quite different from the one experienced in United States. Although the stores in Italy bear the label of ‘supermerkato’ they are generally no larger than the convenience stores in most of the refilling stations in US as opposed to the miles of shopping lanes in the Wal-Mart’s and Targets. The alleys are much narrower and allow only for the use of small hand carts, which almost like Transformers can be turned into a small trolley.

The small size of the carts in Italian stores also reflects a different habit by Europeans, in terms of shopping in small quantities on a more frequent basis, unlike the wholesale ‘buy-the-store’ purchasing habits of Americans. The number of brands for each product is significantly smaller than the offerings in the US.

There are very few ‘made in US’ brands in the Italian stores, mostly represented by the ubiquitous Coca-Cola products.

At the check-out counter you are always asked if you would like to get a bag, and a charge for the bag is added to the bill. You are expected to pack your products into the bags, and promptly.

Overall, the shopping experience in Italy is significantly more personal, with many shoppers bantering with the cashiers as regulars. This was the around the corner grocery store experience before the Sam Walton revolution in the US.

Searching for things in the supermarket was frustrating at times. I was in a group of three but anywhere I would pop into the nearest supermarket to search for a bunch of arugula and honey roasted cashews. I asked workers at supermarkets who assured me that they didn’t sell either of those products in those forms in Italy. I let it go and gave up. Apparently other groups found those items when they went to Milan but it goes to show the effort one has to put in here to find something that they need. Whether its a strike with the trains or the trash men, life isn’t given to you as easy here as it is in America. I took for granted so many comforts of living in America while here it seems like things are changing every day. It’s confusing and would take a lot of time to get use to but when you’ve lived in this chaos your whole life then it’s not really chaos, is it?

The company representative spoke about how the company, in recent years has outsourced production to Asian companies, specifically China. Although this may seem beneficial for the company, it proved to be detrimental to the company’s brand as they were confronted with the problem of protecting intellectual property. This proved to me that the practice of outsourcing does not work for most Italian companies, which is very similar to the case of Pariani. The male guide further informed us that China is the most cost efficient. If the company outsources to china, they are able to save 30% more than they would if goods are produced domestically.

After detailing the company’s challenges of producing goods domestically, our group sat and pondered a solution. Once we were done deliberating, we recommended that the company to get away from the production in China, and become a high-end exclusive brand again, only producing bikes for the most elite.

Pagani was founded in the year 1992. Pagani the company, is a
dream come true for the founder and CEO of this company Horacio Pagani who is
so very passionate about sports cars and had started showing interest in this
field since a very early age. At Pagani they combine creativity and technology
in producing the most innovative sports cars. The headquarters are located in Modena,
Italy.

The production is very limited and made to order. The quality
control; includes five types of testing methods, to check the safety of the
car. Five models are prepared for the purpose of testing its performance and
safety.

Titanium is used in most of the new versions and is very
expensive but has highest quality. The factory has talented people and the work
environment seems good and productive. Their newest range of sports cars includes
Huayra.

Huayra in Mr. Pagani’s words is “……..a jet turbine, the
silence of a glider… the elegance of the movements the wind creates……….. also
the violence and force that it can unleash.”

The Zonda has the V12 Mercedes engine in a central position this has
enabled the Zonda C12 to maintain high performance levels of torque and
power, the weight is comparatively less. the car structure is highly resistant and light at the
same time. They have taken care to make the car very comfortable for the driver.

The Huayra is made of more than 4000 components not including
the engine and the gearbox. The creation of Huayra involves a lot of passion,
creativity and patience. Pagani made a good choice of selecting the best in the
industry for all aspects of the car. For the tires they chose Pirelli, for the
engine they chose to partner with Mercedes-AMG who has created a unique and
lightweight engine, a twin turbo with over 700 HP and 1100 Nm of torque that
perfectly complements the car giving the car riding experience a feeling as that
of an airplane taking off.

The Pagani strategy includes lean manufacturing techniques
with good quality control and made to order strategy which saves them cost in terms
of inventory management. Their main source of advertising is through trade shows
and press releases. They try to achieve the next generation technology in terms
of creativity, design and performance which gives them a competitive advantage.

Bottom line…………If I had a fast car …………….it would definitely be the ZONDA R……..its a beau!

]]> http://italy-study-abroad.com/blog/?feed=rss2&p=1168 http://italy-study-abroad.com/blog/?p=1163 http://italy-study-abroad.com/blog/?p=1163#comments Mon, 06 Jun 2011 16:01:56 +0000 sapna.tauro http://italy-study-abroad.com/blog/?p=1163

Lamborghini is a fully owned subsidiary founded on 30^th October 1963. The Founder is Ferruccio Lamborghini and the head quarters are based in Sant’Agata Bolognese, Italy. Stephan Winkelmann is the CEO of the company. The parent company is Volkswagen group and the subsidiary of Volkswagen which is Audi AG owns Lamborghini.

Assembly of Lamborghini cars takes place at the automaker’s ancestral home in Sant’Agata Bolognese. Here the engine and the automobile production lines run side-by-side at the company’s single factory. The production capacity is fewer than 3000 cars every year. The company currently offers two variations of a single model, the V10-powered Gallardo coupé and roadster. The flagship V12-powered Murciélago coupé and roadster were discontinued at the end of 2010, with its successor, the Lamborghini Aventador, the wait for the Aventadoe cars is approximately eighteen months.

They have in recent times installed a new assembly line which is much faster, saves them time, energy and labor cost as it has reduced the number of laborers by half with this new assembly line. They do not think they would need any changes for the next seven to nine years in this new assembly line which is high tech.

Lamborgini’s strategy includes reaching new markets in Asia. It looks at creating brand awareness globally. Innovation and creativity is a major aspect that helps it gain competitive advantage. Quality is a very important factor that Lamborghini takes seriously. Lamborgini in future looks at building hybrid cars, models with electric brakes and more luxury brands.

Our first visit to Pagani was very  interesting even though I was not fascinated by the design of their cars. However, it was the construction detail and inspiration of aerospace engineering that was appealing instead. The company  has 48 employees and has a current capacity for 15 cars a year which is about to increase due to the production of their Huanyra model. Additionally the background story of the founder was impressive to hear and really made one appreciate how his passion and hard work had translated into the manufacturing of million dollar cars. I had never heard of carbon fiber so it was engaging to hear of it’s qualities that included:
* does not catch fire
* impossible to break
* even if an explosion occurs the car still does not catch fire

Furthermore it was amazing to hear how the custom making details were limitless to the extent that even the name of the car could change. Beyond the design, the quality standards of the cars proved to be quite extensive as well. Such examples included the hand detail involved in applying the carbon titanium and labeling parts with the names of the installing techs. Likewise, the use of bullet proof glass, aerospace parts and the notion that the cars are small planes on the road was stunning.

Bottom-line for this company, it is questionable regarding their jump in production from 15 to 40 cars per year and how they will consistently control production and quality issues. Their expertise in the attention to detail for making hand crafted sport cars appears to require skilled workers that will involve extensive training and time. Thus assuming that they will have to hire additional workers, such a learning curve will impact production schedules. Again, the re-occurring issue for the Italian firms is how to expand growth while staying true to their unique skills and products

Background of Lorenzo
It was extremely captivating to learn about the artistry of creating fragrances. The Lorenzo Villoresi line of fragrances is dedicated to suprerb uniqueness in every aspect of their perfumes with regard to the ingredients and  packaging.  Lorenzo is known as a”nose” in the perfumery business and was referred to as a 100% thought perfumer. It was quite stunning to learn that initially the art of perfumery started out as a hobby as he was conducting research in his psychology studies.

I loved the analogy of his process in comparison to a musician that creates a new melody. Hence to hear how Lorenzo wakes up with a new fragrance in mind was amazing! The employee gave an overview for how Lorenzo creates smells in which he operates similar to a cook and knows what to use to obtain a certain effect for a scent - example spicy, mild or a powerdy scent. It was also surprising to learn that all of his fragrances are considered unisex.

Ingredients & Distribution
The specifics on the ingredients used for the fragrances as well as the distribution were equally essential to the exclusivity of the brand. While natural ingredients smell better, we were told that in some cases synthetic ingredients are necessary in cases involving the killing of an animal or if a scent does not exist. Other reasons why the industry does not use natural ingredients include:
1/ cost
2/ ingredients not standard from year to year; quality may vary thus cannot change perfume formulas to accommodate
3/ Uncertain availability as quality may be high but quantity is low causing an increase in price

In regards to distribution, it is very exclusive - primarily sold in small owned perfume shops. It was emphasized how specialized sales people are needed to explain the fragrance to the end consumer. Such a process could take 2-3 hours for a sales person to explain the artist and why the fragrance is a good match for the customer…wow! Thus, the Lorenzo brand does not sell to traditional department stores because there is no dedicated space or sales person to conduct such an exclusive one on one sale.

Uniqueness of Lorenzo Villoresi Fragrances
During the visit I gained an understanding and appreciation for the differences between artistic and industrial perfumery. Industrial perfumery is what we see in department stores that involves heavy marketing and advertising. In contrast, the artistic side of the business in the case of Lorenzo involves exclusive one on one development of signature fragrances that are presented to clients for about 3,600 euros. Basically as mentioned during the visit, each fragrance has a strong identity. 

Additionally, there  is a particlar emphasis on the one on one sales experience with the ultimate consumer that is critical to the essence of the brand and it’s unique qualities. To this extent, Lorenzo’s customers will purchase a new fragrance without having smelled it just because they trust his taste. 

The unique qualities of the brand even extend into the packaging details that are just as intriguing as the perfume. We were shown samples of products that included the use of glass for the standard perfumes as well as the use of lead crystal and sterling silver for the more concentrated special fragrances. While the company may only sell 6-12 pcs of the extraordinary fragrances to collectors, it was stressed that it was important for the company to still produce such because they liked doing it. This notion in particular is what I sensed continuously from Italian firms that we visited - the uniqueness and passion to make what they loved to do. On the contrary, in the US it is more about making a profit at the expense of changes that affect the brand, product and employees.

The Dilemma of Lorenzo Villoresi
There is no doubt for how unique Lorenzo’s perfumery brand is! Accordingly, one of the dilemmas discussed were who will take over if Lorenzo dies. Fortunately, the company is looking to one of his sons who is naturally inclined and already creating fragrances. Then another side note dealt
 with the issue of continuing to use the full name of Lorenzo for the brand. In order to prepare for the succession of his son to take over, they are trying to refer to the brand simply as Villoresi to not lose the identity and loyalty of the customers.

Overall, this company appears to be moving in the right direction. Although the brand is staying true to their roots of exclusive perfumes they are also producing other fancy products that enables the customers to feel like they are experiencing the allure of the collection pieces. Other examples of positive growth strategies include:

* distribution in Barney’s in NY that will sell the standard collection 
* current development with Gucci for making room fragrances and candles
* idea of  The Academy to teach courses and seminars focused to perfume lovers and those seeking a profession 
* gradual growth with no huge jumps that will jeopardize the exclusive feel of the brand 
* smaller customer accounts to not have dependency on a specific retailer

As Lorenzo stated, his ambition is to become better and be consistent. Consequently for this brand the key for their continued success will be to continue specifically on the notion on consistency and to not let the growth jeopardize their unique and exclusive products, reputation and distribution

After having an in-depth discussion with Pariani personnel, we learned of the challenges the company has and continues to face. Amongst several challenges conversed, the main issue is the infringement of intellectual property from countries abroad, specifically the U.S. He spoke about an incident that took place thirty years ago, that has hindered the success of the company expanding and maximizing profits. Miller, an American company, marketed there saddles under the renowned Pariani name. Moreover, brand infringement issues have also ensued with Argentinian saddle makers.

Like many other renowned Italian companies, Pariani, has experienced difficulty in maintaining brand recognition in both Italian markets and abroad. Although the task at hand seemed fairly easy, we were armed with the challenge of finding an solution without expanding, or acquiring or selling their businesses, and refraining from increasing their production too much. Our recommendation for the company was to collaborate with another exclusive high-end company (like Brioni) where the product can complement the Pariani saddle. This partnership, I believe will help the company to achieve there goals.

Prior to touring the manufacturing facility we were charmed with the presence of Mr. Horacio Pagani, owner and founder of the prestigious automobile company. He gave us a detailed account about his interest in producing cars as well as his experiences working with Lamborghini, which ultimately propelled him to start a car company of his very own. We learned that his interest in the industry began at the tender age of 10, when he created advanced models and by the age of twenty built his first formula two race car. Although we only met briefly the owner’s passion and love for creating high quality automobiles were exuded through each and every car that sat in the facility, even the smaller toy models. After his introduction, we were finally allowed to tour the small manufacturing facility.

In my amazement there were a relatively small group of people working on the high quality cars. My curiosity was soon put in perspective as our tour guide informed us that the company only yields about 15 cars per year. She then went on to explain that the company intends to increase its productivity to about 40 cars per year with the creation of a new factory. Nonetheless, the guide then introduced us to one of the most important materials involved in the creation of these cars: carbon fibers. Since it is very important to the production of these high-end vehicles, each employee is required to mark their name on each part they create for the car, for quality assurance. We watched in awe as each vehicle was customized and made-to-order for respective customers, who paid a whopping 1.5M Euros. Although I may not ever have to opportunity to own a Pagani of my own, I was very grateful for the opportunity.

Our tour guide, who is the daughter of the creator of the winery, greeted our bus dressed very casually in a t shirt, a pair of dirt stained jeans, and a simple pair of comfy sneakers. She was soft spoken and very relaxed. She didn’t at all seem overcome by the beauty of the property where he land sat. I guess with time you become used to it but I will never understand how you could. There was a beautiful perfectly trimmed garden that lay right before the fields of grapes. It seemed like the ideal place to have a fairy tale wedding ceremony. There was even a small pond filled with lily pads, frogs, dragonflies, turtles and a lot more creatures. We soon learned that the sole purpose of the garden, asbeautiful as it was, was to protect the grape vines from any diseases that might strike. The design was for it to strike the garden first. It revealed the emphasis 100% natural the company held.

Soldera practices the traditional, and quite often abandoned method, of producing quality wine without the use of pesticides, additives, technology, etc. It is a small company with 35 employees maximum. They believe in allowing the grape to take its course into becoming the wine you desire. First it starts with the perfect grape. Soldera only uses perfect grapes, all the others are left to become a nutrient to the soil, and they are all picked and seal to ferment within hours of leaving the vine. From there they will stay in all wood barrel to mature to perfection for a number of years until just right.

ll company, with only 35 employees max at picking time only. The tour guide’s father spent years during the 1960’s studying microbiology before opening the winery in the 1907s. Today, they practice only 100% natural methods to wine making, and her father is still heavily involved in the process. He has an eye for choosing the perfect grape, a talent is passing on to his daughter. The company enjoys being highly rated for the great taste of their wine, yet was very modest about even revealing the rating scores. The guide told us that ratings are nothing compared to one’s own tongue; you have to enjoy the experience of tasting and enjoying a wine, understanding the art it is, and then determining for yourself. That stood out to me.

PAGANI

The Pagani facility was a very small scale compared to U.S. car companies that have massive facilities producing thousands of automobiles each day. Later we learned that production of the car is done almost completely by human labor, and only about 40 cars are produced and sold each year, each by special order. The technology of the cars are taken from aeronautic engineering, therefore, they are powerful racing vehicles. If I recall correctly, only one car is street legal in Europe, and they are still awaiting approval from the U.S. for a street legal car.

The creator of Pariani, once an employee of now competitor Lamborghini, began his first car in 1992 and it took him 7 years to make it and he only made 8. Now with 48 employees in tow, he is creating personalized car upwards towards the 1.5 million EURO a pop.

The company places a lot of emphasizes on quality production and meeting the customers desires as much as possible. Each car is hand crafted and quality control is very important. Each employee is held responsible for their portion of the car making process. They actually have to write their names on certain parts during certain steps of the process. The material is hand molded to prevent defects, they use titanium and carbon, and even have bullet proof windows. The tour guide described the cars as airplanes on the road.

The issue facing this company is why is there so little brand recognition associated with a Pagani car which is much more expensive and exclusive than its counterparts? How does a company like Lamborghini continue to be recognized as top of the line when it may not be? Where were all the tourists ready to tour the Pagani facility like we were?

LAMBOURGHINI

Although I was not thoroughly impressed by visiting the Lambourghini plant, I must say that there were plenty of excited tourists, a much bigger facility, and a lot more cars on display. Everyone squealed with excitement and was exited the bus and headed towards the main entrance to wait for our tour guide. We were told to leave all our belongings behind in lockers before the tour began.

Our tour guide had a very thick Italian accent and at times it was hard to decipher what she was saying which in part made the tour a bit monotonous. She mentioned the fact that early in it’s life Lamborghini faced bankruptcy and has since then been bought and sold by a number of auto companies, now they are owned by the Audi company. It’s amazing that despite being shifted from hand to hand the company maintained its reputation for fashionable, upscale, sporty, speed demon cars.

Unlike other Italian companies we visited, Lamborghini created a less expensive version of their main car so that they could capture more market share and remain competitive, and it didn’t hurt the brand at all. It acutally boosted sales and demand. They still hold quality and customer demand as high priority, but they have found small methods to become more efficient. Unlike, Pagani where everything is made from the upmost quality materials, Lambourghini actually uses faux leather in some cars because it is cheaper and easier to clean.

As we departed the Lambourghini facility, after learning more than I’d cared to know about each step of each process, Professor Arikan posed a complex question for us: How is that Lamborghini has introduced a lesser line of cars, has great brand recgonition, a healthy market share, but has been shifted between different auto companies over the last few decades and still sees no effect in sales, there is an 18 month waiting list?

I pondered and thought about an answer to this question to this answer and the only plausible answer that I came up with was that under the various companies they were owned by they enjoyed a great amount of varied marketing techniques. Each manager of the company built upon the last company’s strategy, probably engaged in research of the market, and made itself more readily available, therefore known, than its counterparts.

DALLARA

We ended our journey through the auto valley by visiting the company Dallara whose market is motor sports and producing racing cars. Of all the companies we’ve visited, the employees of Dallara, each one we met, seemed so passionate about race cars, Indy racing, and all things related. I was taken aback by the amount of detail provided in the delivery of the tours of the plant. Our first tour guide was pulled away by something that needed is immediate attention, and our replacement guide happily took over. Although he could be a bit long winded, he really knew about Dallara,  and I felt his enthusiasm.

Dallara has been around since the mid 1970s and they make Formula 3 cars only, worth 90,000 EURO without the engine, and 180,000 EURO with the engine. The racing section is the sales. They compete on the body of the car, which is very important in racing because it must be engineered to help the car propel faster, but all the engines are the same. The cars are not tested in house but another location. I be very afraid to even sit in one with the narrow amount of space for the human body to fit.

Motor sports in the U.S. is much more developed, so Dallara entered Indy car racing in 1997 and quickly drove out their competitor , G-force, because of the speed. Speed is essential in racing is it not? Since then cost containment has become an issue and they want to keep it as low as possible. One of the topics that were mentioned as a subject of much discussion is the body work it. They are considering the thought of having teams manufacture their own components around the main structure; however they made it clear that it is important that whoever they trust in manufacturing follows their guidelines for the safety of the drivers. It was not expressly stated, but maybe this is a part of their cost cutting efforts now that they dominate in the market.

Dallara is now set to build a factory in Indianapolis right in front of the race track. Maybe this is an effort to monitor competition while remain close to consumers and maintaining demand.

While anticipating the arrival of Mr. Villoresi, our female tour guide, who seemed well versed in both the affairs of the company and the perfumery industry, provided us background information about the “nose”, a name given to Mr.Villoresi for his keen sense of smell. During this time we learned that the owner’s arrival to the fragrance business did not derive directly but rather a round-about way. She went on to explain that after studying psychology at the University of Florence, he spent a year in New York before returning to Italy to complete degrees in philosophy and religion. Subsequent travels in North Africa and the Middle East sparked an interest in spices and other fragrant materials, and eventually he was asked to create fragrances for friends, and then scented candles for Fendi. Villoresi, urged to leave the industrial perfumery business, whereby companies invest heavily in advertising and mass production, wanted to focus and explore the artistic perfumery arena. In the industry for artistic perfumery, focus on natural ingredients and unique customer experiences are of upmost importance. In fact, she notes that the company is even selective when selling to customers, as the brand is to only be associated with the most elite. After speaking for approximately thirty minutes on this subject matter, we were finally graced with the presence of Mr. Villoresi himself.

Although we only met for fifteen minutes or so, Mr. Villoresi provided us with an immense amount of information and detailed accounts on his experiences in the industry. He often described himself as “a craftsman who is also an artist.” I also found it to be very interesting when he informed us about his interpretation process, where he is able to translate words into scents; simply “serving as a mediator between a person’s desires and the fragrance phial”. From uttering similar poetic ideas, his background education in the philosophy field became very evident. Only after concluding the information session were we able to ask questions concerning the future of the company. During this time we expressed extreme concerns over how the firm intends to survive as Mr.Villoresi ages and retires. He in turn offered several means of solving this issue. The succession planning for the company, as detailed by Mr.Villoresi, is dependent upon his son, who at a very young age has started creating perfumes. Aside from this, Lorenzo expresses that he has created hundreds of formulas to be produced in case of his absence. The last solution he gave involved a training program where an individual would train for years with the sole goal of becoming the head of the operation.

I found the solutions that were given to be decent but did not solve the issue at hand. This experience brought to light that no matter the industry there is a severe lack of managerial skills in Italy. It is apparent that the traditional way of conducting business in the country is no longer fit to face new challenges.