Essay about Gallo Rice

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1. What is special (different) about F&P Gruppo? Why has the company been successful? First of all, F&P Gruppo describing itself as "the rice specialist" was exceptional, because it was one of few companies in the world so vertically integrated, involved in entire process of growing, milling, packaging and marketing rice. The advantage of such organization was control of the quality and the ability to react quickly according to market changes. The company decided to trade off other products than rice appointing itself as a goal achieving market share leadership through bringing differentiated, higher margin products. F&P Gruppo was investing heavily in Research and Development, because new products were supposed to derive 35% - 40% of…show more content…
Nevertheless, it doesn't mean that there was no potential for changing eating habits. Second, Arrocera Argentina, exporting rice to Poland had small volume share (less than 1%) because it just started its operations on Polish market three years ago. In 1991 Polish retail market was still underdeveloped and private food retail outlets were just emerging. Third, during communism imported food as rice had been subsidized, but after 1989 lack of subsidies caused price increases and thus lower demand. The hyperinflation was making the situation even worse. In addition, Poland at that time after opening its market was flooded by imported goods of all kinds, so there was a serious competition for Gallo rice. Main thread posed Uncle Ben's rice, which had penetrated 90% of the supermarket and grocery outlets in Warsaw. Also, because of poor choice of products while the Polish economy was still centrally planned, people didn't know other varieties of rice than white one, so that's why they were sceptical while offered brown one. Taking into consideration all these reasons listed above one can understand why Gallo's market position was comparatively weak. However, such unattractive business environment was temporary and on the basis on all its constraints one shouldn't imply that there were no opportunities for a long term.

3. What similarities and differences do you see in the tree markets and in Gallo's approach to them?

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