Marketing Analysis : Ferrero International S.a

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FERRERO INTERNATIONAL S.A.

Ferrero is the Italian leading manufacturer of chocolate and other confectionery products. Founded in Alba, Piedmont, in 1946 by Pietro Ferrero, the once simple corner pastry shop, thanks to the hard work of two generations of Italian entrepreneurs embodied in Michele (son) and Giovanni Ferrero (grandson and CEO), grew and evolved in what Ferrero is today, a multinational family-owned group image of the Italian excellence in the chocolate world.

The company, with 78 consolidated subsidiaries worldwide, operates 22 production plants and 9 agricultural companies globally, and distributes its products in over 160 countries.

With a turnover of €9.5billion (2015) and over 25,000 employees, Ferrero is
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The Group continuously undergoes investments in the improvement and expansion of its hazelnut farms and production plants and equipment. All this capital is deployed in line with key corporate strategies that focus on constant enhancements in the products’ competitiveness and quality, while taking devoted care to food freshness, product safety and the broader environment in which Ferrero operates.

In order to sustain these KSF, industrial technologies must be continuously enhanced, ultimately allowing Ferrero to strengthen its competitive advantage, and to fulfill the ever changing desires of its consumers.

VALUE CHAIN

Strategic Overview
In all the different stages of its value chain, Ferrero uses different approaches influenced by the distinctive underlying strategic rationales which leverage the KSFs that create each stage’s competitive advantage.

In order to give a context to what are the recommendable strategies and actions for Ferrero moving forward, three blocks along the value chain are analyzed – Raw Material, Production, Point of Sale. The analysis of the company’s strategic rationale will give a sense of the strengths and weaknesses of the current value chain structure.

To give a general overview of the strategic philosophy traditionally used by Ferrero in its decision-making process on new expansionary investments the OLI Framework results helpful in comprehending the choices of market-entry modes in each block.

The OLI Framework

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