The Piquadro Case Analysis of the Key Factors

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The Piquadro Case Analysis of the Key Factors Innovation oriented business: the Piquadro case Analysis of the key factors Angela Congedo, Marco Demarchi, Chiara Sibelli Politecnico di Torino, Industrial manufacturing and technological innovation engineering Abstract An analysis of Piquadro, an Italian leather goods brand, towards an understanding of its working sector, its current business organization and its future opportunities. The study of the environment as a conditioning factor for the strategic key decisions and for the brand’s future development allows the identification of the essential factors every company needs to take into account for a correct view of the market. Keywords: Piquadro, Market Analysis, Analysis of the external environment, Market for leather goods, Innovation. Introduction It is important to be aware of the risks and at the same time of the advantages of the In the last decades commercial relations world outside the company’s walls. It is among countries have changed significantly, equally essential to know who we have to driven by the globalization impulse and the compete with, because even though it is true thunder of a competition that is no longer that in war one should know his enemies merely local but global. This is true for every better than his allies, it is also true that, on economic sector and it affects each of the the market, knowing one’s competitors thousands of companies that make up the grants a company not only its survival but commercial landscape. its development as well. And if one eye is Actually, what could once be defined “the focused on the outside, the other has to look productivity challenge” is nowadays an within the organization because no company innovation and quality one. Consequently, can afford to overlook its own internal the strength of a modern company is no management, especially as far as the longer measured just by the number of financial economic aspect is concerned. invoices it issues, but also by the image it However, a solid financial management is communicates as well as the level of its only one of the two crucial points for a customers’ loyalty. company’s growth, the second factor is the Therefore, it is clear that in such a changing research and the development of new and competitive environment every products which represent the ability of a firm company needs to look further, to move to either come after or anticipate the very rapidly and, now more than ever, it has to frequent changes in the style of the think about what its strengths are, since consumers' lives. Finally, it is necessary to these are the very elements which make a remember that since running without a firm unique and uniqueness is the only specific goal leads nowhere, a careful guarantee for a better future. strategic planning is necessary both to set Design, comfort and technology are the goals and to determine how to achieve them. three fundamental principles of Piquadro’s Being aware that companies today must deal mission and the company considers research with these new types of challenges we and development the main targets for its decided to choose one company among future growth. The constant attention to the many others, in a sector among many others, technological innovation of the product is in a country among many others. confirmed by the large portfolio of patents We then analyzed the current situation of filed by the company. Another distinguishing Piquadro, an Italian enterprise that factor is undoubtedly the all Italian design manufactures leather items designed to edited by a team of designers who know and meet the needs of working and traveling interpret the company’s key values, people. developing cutting edge solutions and new materials. Moreover, Piquadro renews its style with the essential contribution of young Background talents by cooperating leading Italian and foreign design schools. Born in 1987 from an idea by Marco Palmieri, Due to their technological and design the brand has been able to develop in a very features the brand’s products’ life cycle is fast and dynamic way1. Its mission: "To ample in comparison with other leather enhance the emotion of the product, placing goods firms on the market, linked exclusively it in the consumers’ dreams, even if this to the fashion factor. The current product product is at the service of technology rather lines cover different functions: from business than fashion." Piquadro is now one of the bags to luggage and small leather items. most innovative Italian companies in the The typical Piquadro customer is a man “luxury-leather goods” sector. Its products (60%) or woman (40%) between 26 and 50, are the perfect blend between traditional economically independent, a professional, Italian material processing and the most graduate or young employee, has got both technologically advanced solutions.2 culture and money, open and attracted to This combination of tradition and Hi-Tech new technologies, unique design and has been the key of its success. Through functionality of the product. Environmental Analysis we are able to assess Piquadro currently trades in more than 50 why it is necessary for the company to countries by means of a distribution network improve the technological contribution of which counts more than 1500 dealers and 79 their products in order to assert the brand on of them are one-brand stores (46 in Italy). foreign markets in Europe and worldwide. It The organization directly chooses the is also worth pointing out that the company available raw material on the Italian market has been on the stock market since 2007.3 with a focus on quality, aesthetics and technique. 4 The production was entirely moved to China 1 Profile. About Piquadro. Firm Website. in 2008: 40% of the production is performed th [Consulted on: October 12 2010]. Available on: in Zhongshan (South China), totally in www.piquadro.com accordance with the ethical and the quality 2 Mission. About Piquadro. Firm Website. European standards. The remaining 60% is [Consulted on: October 12th 2010]. Available on: outsourced in the same geographical area. www.piquadro.com 3 Balance sheet 2010. Piquadro. Italy, March 31st 4 Balance sheet 2010. Piquadro. Italy, March 31st 2010 2010 Storage and logistics, two key factors for and exact view of the context of the long-life-cycle products such as these, are company’s situation is provided which gives found in the establishment of Gaggio the reasons for decisions taken in recent Montale (Bologna), equipped with an years to better understand the direction the automated warehouse capable of handling company will take in the future and the orders for 24-48 hours with an extraordinary motives that led to such considerations. efficiency. R&D, design, engineering, quality In the first place, the analysis of the political control, marketing, communication and factors reveals that in this sense the distribution are centralized in the same company is not subject to any specific Italian Piquadro head office.5 As for influence derived from the context: the only distribution, Piquadro uses two different exception seems to be the decision of channels: DOS (direct sales) and Wholesale transferring the production to Asia, (franchising).6 specifically to China8. This initiative has in The company current strategic plan to fact led to a series of measures mainly develop its presence on the national and the related to the trade regulations and work international markets can be summarized in rules. As far as the first are concerned, the the following five guidelines: company feels the need to regularly test its products, in order to ensure a certain quality Constant research and development; standard level9. In that sense, it is worth Expand and strengthen the brand's mentioning the European regulations and presence internationally; directives all the company’s products are Expand the distribution network by subject to. However, Piquadro is not affected opening new franchised stores; by these standards in a negative way since its Develop the offer in the sub-sector products have always proved to be in line of women's handbags; with the standards of control, in this way New communication strategies and giving the company a quality image. On the brand development. other hand, as far as the work regulations are concerned, Piquadro is affected in a As far as strategy is concerned, research and positive way in terms of costs, since the intellectual property represent the production in China allowed their company’s basic competitive points of considerable reduction. At the same time, strength.7 the different working attitude and environment have played a negative role given the peculiarities of the European and PEST Analysis the Chinese realities. Nonetheless, the relocation of the production has not been a PEST analysis allows a focus on the most important environmental factors influencing 8 the company in question. The political, Image Building. Cartella stampa Piquadro [on line]. Page 6, Acquisizione dello stabilimento economic, socio-cultural and technological produttivo in Cina. Available on: aspects are analyzed. In this way, a detailed www.confindustriaixi.it/documenti/Palmieri_Pres s_Kit_Piquadro.pdf 5 Piquadro. Press kit. Italy, April 2010. 12. 9 Image Building. Cartella stampa Piquadro [on 6 Balance sheet 2010. Piquadro. Italy, March 31st line]. Page 8, Rigidi controlli qualitativi. Available 2010 on: www.confindustriaixi.it/documenti/Palmieri_Pres 7 Piquadro. Press kit. Italy, April 2010. 12. s_Kit_Piquadro.pdf decisive factor only from a political point of opportunity to establish new markets. view, but also from an economic one: the Therefore, a high variation in the purchasing use of Chinese workforce can reduce staff power can affect the company’s sales, costs and other sector costs. The different although it is useful to remember that the location involves different costs not only in positive change in the average income in terms of workforce but also of energy, real developing countries is a positive factor for estate, etc.
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