Barilla Spa Swot Analysis

Industry trends:

• Per capita pasta consumption in Italy averaged nearly 18 kilos per year.

• Export market experiencing record growth; pasta exports from Italy to other European counties were expected to rise as much as 20-25% per year in the early 1990s.

• Barilla SpA is the world's largest pasta manufacturer.

• Has a 35% market share in Italy and 22% market share in Europe.

SWOT analysis

Strengths Evidence Implications

Established brand name Since the 1960s,Barilla revolutionized the Italian pasta industry's marketing practices by creating a strong brand name and image for its pasta, selling pasta in a sealed cardbox with a recognizable colour pattern

Hence in 1990, Barilla was the largest pasta manufacturer in the world, making 35% of all pasta sold in Italy and 22% of all pasta sold in Europe

Large variety of products

Divided its products in to dry and fresh. In total, Barilla dry products have 800 different packaged SKU. Fresh products included fresh pasta products, which had 21 day shelf lives and fresh bread, which had a one-day shelf life. Consumers have a huge variety of products to choose from hence enabling Barilla to capture substantial market share.

Good sales and marketing strategies implemented Barilla brands are very heavily advertised and a modern sophisticated image was portrayed. Usage of celebrities' endorsement effect.

Trade promotion utilised together with volume discount and transportation discount. Strong advertising contributed to its brand awareness, making it the no.1 choice for consumers. Trade promotions and volume discounts leads to variable demand and inventory at distribution centres.

Weaknesses

Unfair distribution of resources for the sales force

Barilla sales representatives serving DOs spent an estimated 90% of their time working at the store level. In contrast, a very small sales force served the GDs. The sales force rarely visited the GD's warehouses and GDs usually sent their orders to Barilla via fax Hence lose out on potential profits from the GDs by only focusing their sales team on the DOs. Should channel more sales representatives to meet the needs of GDs.

Absence of proper forecasting system

Did not use any forecasting model and follow replenishment ordering. Miscalculation of ROP and safety stock. Order batching has no minimum or maximum quantities and hence leading to problems of stock outs and backorders.

Opportunities

Implementation of the Just