7814 Words Mar 6th, 2011 32 Pages
Case Background

Lucchetti, a subsidiary of Quinenco, has entered the Peruvian market after seeing the growth opportunity that had yet to be taken hold of. The company was known for the quality, nutritional value, and competitive prices of its products, most especially its pasta. Amidst the powerful competition, Lucchetti could have succeeded, if it hadn’t been only for the issues it faced in Lima city.

Lucchetti began by importing pasta from Chile, and then from Italy. Sales underwent continuous growth, but because of the seemingly ensuing price war in Peru and the high cost of importation, Lucchetti was tempted to consider the construction of a plant in Lima.

Because of certain
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Decreased Revenues Despite Lucchetti’s ISO 9002 and 14001 certification for their new plant in Peru, from 1997 several attempts were made by the government of Lima lead by mayor Andrade opposing the construction of their plant which eventually succeeded in 2003.


Decreased Revenues A lot of political upheavals in Peru that had directly affected Lucchetti Plant. Andrade even called Peruvians to boycott all Lucchetti’s products. Lucchetti, though it met all requirements, was the target of all criticisms when other neighboring domestic plants there should be the city’s concern.


Decreased Revenues

Fragmented market of Peru
Decreased Revenues With the order to shutdown plant, several local mayors in other parts of Lima offered Lucchetti to relocate to their districts at preferential prices with favorable tax terms.


Increased Revenues

External Factor Evaluation (EFE) Matrix for Lucchetti Each factor is assigned a weight ranging from 0.0 (not important) to 1.0 (very important). The weight indicates the relative importance of that factor to being successful in the industry. Then each key external factor are assigned ratings from 1-4 to indicate how effectively the firms current strategies respond to the factor, where 4 = response is superior,
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