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Holcim Italia S.p.A - Essay Example

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The case study presented illustrates the changes in marketing strategy of Holcim Italia S.p.A, the cement manufacturing firm. The company is searching for alternatives as their main problem lies in the decline of sales and profit margins. In the first half of 1990s the building industry experienced a recession, which resulted in significant fall of cement sales…
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Holcim Italia S.p.A
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Download file to see previous pages While the company's sales continue to grow, Holcim loses its market share as the market develops more rapidly. In order to solve this problem the case study fulfils the following objectives:
The case study is divided into two main sections: situation analysis and presentation of possible solutions. The situation analysis starts with drawing the general picture of Holcim's market environment. Further on main competitors of the company are introduced. Then the market analysis by segments proceeds. The situation analysis ends with interim summary of the information acquired. The next section, alternative solution is divided into five subsections discussing what changes can be made in order to affect the whole cement market and each of its segments. Conclusion sums up the information acquired from the case study.
Italian cement market has experienced decline and recovery of the demand in the past decade. The volume of national demand was 34.868 million tons in 1994. Then in two years it fell down by 2.95% to 33.623 million tons. In 1998 national demand has almost recovered from the downfall getting back to the volume of 1994: 34.685 million tons. The next two years marked a significant increase of demand: 36.147 million tons in 1999 and 38.338 million tons in 2000. ...
The changes in volumes of demand were conditioned with changes in the building industry. Its recession in the first half of 1990s caused the decline of cement demand volumes. Then this setback stopped and cement market resumed its growth. In the meantime, some qualitative changes occurred in purchasing processes during these years. While personal relations between sellers and buyers of cement were important in the past, their value has recently declined along with the increase of importance of technical requirements and information exchange. The demand has become more sophisticated, and purchasing process has become more professional in the cement industry.
Introduction to main players in Northwestern region
Unlike other European countries, Italian cement industry consists of large number of independent manufacturers, competing fiercely with each other. The scope of our case study requires us to look not on the competition on the whole national market but only on its Northwestern region. Therefore it is important to add that, while the behaviour of the demand in Northwestern region is almost the same as in the whole country, the latter regional increase of demand in 1999-2000 was even higher: 10.9 million tons in 2000 against 8.717 million tons in 1994, which means a 25% increase. Thus, the regional cement market of the Northwestern Italy grows faster than the whole national market.
Holcim Italia S.p.A., which is a "main character" of our case study, has 3 factories in the Northwestern region and a market share of 23% in 2000. It is a multi-regional company with long and proud history, and it is perceived by customers as a solid and prestigious cement manufacturer. The advantages of the company are: high-tech machinery and sophisticated ...Download file to see next pagesRead More
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