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Appendix 1. Construction Activity in Italy ...

Содержание

A. EXTERNAL ENVIRONMENTAL ANALYSIS4
1. PEST Analysis4
2. Industry Analysis – Competitors
2.1. Italy’s Cement Industry Analysis
2.2. Direct Competitors9
2.3. Overview of the Competition
2.4. Indirect Competitors
3. Market Analysis – Market Segments
B. INTERNAL ENVIRONMENTAL ANALYSIS
1. Evaluation of Mission Statement
2. Evaluation of Corporate Objectives
2.1. Economical Objectives
2.2. Non-Economical Objectives
3. Evaluation of Functional Areas
4. Evaluation of Current Marketing Strategies
5. Evaluation of Target Market
6. Evaluation of Current Marketing Strategies
6.1.Current Marketing Mix
C. SWOT ANALYSIS
1. Internal Environmental Analysis
2. External Environmental Analysis
How can Holcim Italia turn weaknesses into strengths
How can Holcim Italia use strengths to take advantage of industry or market opportu-nities
How can Holcim Italia use strengths to reduce the impact of external threats
RECOMMENDATIONS
RESOURCES

Введение

КАК ЗАКЛЮЧЕНИЕ
Recommendations I would suggest to Holcim Italia would have been:
- As the market segments in the cement industry are limited and are already identified I would recommend Holcim Italia to continue targeting all the buyers in the relevant market and to continue with mass marketing approach, but at the same time to segment the market in accordance with geographical area. Considering high freight costs and small breath of Holcim’s products it is better to focus on businesses inter-ested in buying cement which are situated within 200-300km from Holcim’s facto-ries.
- Another way to increase the market share and company’s customer base is to rent or buy warehouses in different parts of Northwestern Italy in terms of attract-ing clients from different places and give them an oppo rtunity of saving on transport costs. The company may sell cement form its warehouses - points of sale. This will also let the company speed up the delivery processes and satisfy its customers. Thus, the company will increase its breath of products, and as a result the market share.
- Further the market should be segmented in accordance with needs of ce-ment purchasers. Holcim should make more effort on targeting those market seg-ments that seek for high-quality products or technical assistance and do its best in sat-isfying their overall needs. These segments are building companies, concrete manu-facturers that look for technical assistance because it is essential to their concrete production processes, and prefabricated building manufacturers and manufacturers of “products and industries” that look for high-quality products as well as for good tech-nical assistance. However, that does not mean that the company should not target re-tailers or DIY enthusiasts, it just should focus more on targeting the first 4 segments.
- Holcim needs to stimulate selective demand among competitors’ customers and in current customer base. In order to acquire competitor’s customers Holcim needs to position itself as a company which is able to provide not only high-quality products but also other benefits such as convenient payment conditions, good techni-cal assistance, personal approach etc. Moreover, Holcim reputation and brand are strong, so Holcim should make more effort in promotion. Holcim Italia is a part of Holcim Group – a very respected company in the world professional cement industry community. With the help of headquarters Holcim Italia may disseminate information within the country’s leading industry magazines and websites.
In order to expand demand among current customer base Holcim Italia needs to pay more attention to relational marketing as personal relations are still very im-portant determinant in making purchase decisions. Holcim also needs to develop complementary services in order to keep its customers satisfied and maintain high level of loyalty.

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2.1. Economical Objectives:
Revitalize the sales and to increase the company’s profit margins
Devise new marketing strategies in order to compete successfully with other cement manufacturers in Northwestern Italy
Validate the segmentation and targeting strategy
Analyze the company’s competitive positioning
Decide how to increase the penetration of the cement market
Increase company’s market share
2.2. Non-Economical Objectives:
Produce high-quality cement products
Provide customers with good technical assistance service during all the stages of manufacturing concrete from cement
Deliver products on a timely and prompt basis
Transferring knowledge and developing innovative services for clients
Continually set the highest standards of customer satisfaction in the cement industry
Be recognized as an employer of first choice
Demonstrate the commitment to sustainable development
Be acknowledged as a valued and trusted partner in the professional community
Understand the challenges the company faces in moving toward environmental sustainability
3. Evaluation of Functional Areas
Since 1996 Holcim Italia S.p.A. has been part of the Holcim Group, a global player in the cement industry, with headquarters in Switzerland.
The Board of Directors of Holcim Group consists of 11 members, CEO Markus Akermann being the sole executive member.
Companies within Holcim Group function under the executive management of the members of the Executive Committee, each of whom has specific geographic and/or functional responsibilities, and encourages an environment in which Holcim is able to capitalize on new ideas and new opportunities. Thus, all the companies of Holcim Group are connected with headquarters, which provides a high level of communication and overall integration.
Current Chairman and CEO of Holcim Italia is Domenico Salvadore.
Senior management of Holcim Italia consists of the following people:
Current President: Carlo Gervasoni
Current CFO: Peter Rutzler
Head of Human Resources Department: Mauro Bonafe
Head of Energy Resources Department: Raffaele Chiulli
Head of Cement Production Department: Roberto Bonati
Head of Technical Area: Max Schlumpf
Head of Corporate Marketing and Communication: Francesco Dal Fara
Responsibilities are divided among these executives in areas of highest importance to the success of the company. By having Human Resources executive it is evident that the company values its employers and the work they provide for the company. Corporate Communications department contacts can be found on the website. Providing such contacts to the public demonstrates company’s willingness to achieve and maintain good relations with its markets and public.
Holcim Italia is the second largest manufacturer in Northwestern Italy. It has three factories (Merone and Ternate, where the cement is manufactured, and Morano, a grinding station). The company constantly invests in high-tech machinery in order to operate at full capacity and to produce high quality products, and also has special training programs for its employees to guarantee well-skilled personnel.

4. Evaluation of Current Marketing Strategies
Holcim Italia is viewed in the market as solid and prestigious company. It positions itself in the market as a company that produces high-quality products and provides excellent technical assistance as well as other services. Technical assistance service is Holcim’s key asset as it obtained ISO 9002 certification. Therefore, Holcim Italia competes in the market by reliability of the offer and not by the price.
The commitment of Holcim to its customers ensures that its product range is enhanced by innovative research and development. Holcim promotes the use of sustainable, eco-efficient products such as composite cements containing mineral components. By adding mineral components the company is able to differentiate its products in the market. However, Holcim Italia does not offer the full range of the cement products, that is why some customers’ needs cannot be satisfied. The company’s overall level of business could be significantly increased if new products and services were added. As there is a tendency of emergence of sophisticated needs, every year there will be more demand for special cement products and additional services.
Holcim Italia is flexible and reactive to costumer requests company. It offers convenient payment conditions, which are an important determinant for many of the customers.
Holcim promotes itself as a responsible company with strong corporate governance. The company engages in many activities and projects within its spheres of influence and is committed to creating effective communications that enable its stakeholders to make informed decisions about the goals and performance of the company.
5. Evaluation of Target Market
According to the attachment 819 Holcim Italia targets all of the main market segments that purchase cement. These are concrete manufacturers, retailers, building firms, prefabricated building manufacturers and manufacturers of “products and industries”. Holcim Italia also targets some other categories of cement purchasers – DIY enthusiasts. According to the attachment 1020 Holcim’s market share of building firms is 22.3% of the total Northwestern demand basis. Despite the tendency for building firms to outsource their concrete production, Holcim Italia still successfully targets this segment. Building companies are followed by DIY enthusiasts who constitute 15,5% of market share. These other customers are individuals and businesses that do not purchase cement from retailers. Concrete manufacturers have the third place in the distribution of the market share with 12,9 % . Holcim Italia targets its market segments attracting them by good quality products and excellent technical assistance. However, Holcim Italia does not have the full range of products to satisfy the sophisticated needs of prefabricated building manufacturers and manufacturers of “products and industries” who, apart from buying standard cement types, also buy some specific types of cement.
6. Evaluation of Current Marketing Strategies
6.1.Current Marketing Mix
Price Policy:
Holcim Italia does not offer a very competitive price as some of its competitors do. Holcim Italia’s competitive position in the market is determined by reliability of the offer instead of competitive price.21 However, Holcim Italia offers flexible payment conditions that seem attractive to most of the cement consumers as very often purchase decision is determined by flexible payment conditions. In this case, Holcim Italia wins points from its main competitor Italcementi – the company where highly bureaucratized internal processes have negative effect on the performance of the commercial department, and as a result, this causes less flexible payment conditions.
Product Policy:
Holcim Italia is an environmentally responsible producer of high quality cement materials to benefit the built industry. The commitment of Holcim to its customers ensures that its product range is enhanced by innovative research and development at the cutting edge of cement and concrete technology. Holcim promotes the use of sustainable, eco-efficient products such as composite cements containing mineral components. These mineral components are cement constituents, which are not derived from clinker production. By adding mineral components the company is able to differentiate its products and offer customers tailor-made solutions with specific properties such as increased durability and workability. Mineral components are also a powerful tool to reduce CO2 emissions. The company offers Portland composite, or class 2, Blast-furnace, or class 3, and Pozzolanic, cement of class 4. To always be welcomed by the customers, the company’s guideline is straightforward: apart from offering high-quality products, to offer a perfect service. Holcim offers excellent technical assistance service to its customers. Thus, the combination of high-quality products together with a customer focus programme is a further insight into how the company seeks to differentiate itself in the market.
Place Policy:
Holcim serves several regions in Northwestern Italy, with plants in Lombardy, Piedmont, Valle d’Aosta, and Liguria. It has three factories (Merone and Ternate, where the cement is manufactured, and Morano, a grinding station). Holcim delivers its ready products to the customers, and it has good reputation for timely and prompt delivery of the products. Moreover, as the company provides technical assistance service, Holcim’s representatives visit building sites during all the stages of the process of making concrete from cement.
Promotion Policy:
The reputation is the most valuable asset for any company. That is why Holcim’s reputation is its powerful brand and the most precious asset. Holcim Italia promotes its products and services by building loyal, long-tern relationships with its stakeholders by treating them fairly, meeting their needs and earning their trust. Holcim’s involvement with neighboring communities has always been a mainstay of company’s social engagement. The company engages in many activities and projects within its spheres of influence, some of which have continued for decades. Holcim is committed to creating effective communications that enable its stakeholders to make informed decisions about the goals and performance of the company. Holcim is open and transparent in providing continuous and comprehensible information on its performance. It also publishes sustainability, environmental or social reports at corporate level. Thus, Holcim promotes itself as a responsible, solid and prestigious company with strong corporate governance. Holcim takes an active part in local life, and that is how the company has achieved a positive image for itself by creating jobs and by generating significant income and benefits for its stakeholders. All these factors promote Holcim’s products and services in the market.
People Policy:
Holcim recognizes that qualified and enthusiastic staff are the basis of its ongoing success. At Holcim, careers focus on development of professional and personal skills. Company’s high demands on creativity, initiative and responsibility of its employees require a broad training and professional development program for all staff. An extensive body of training measures and programs have been developed with an end to making Holcim a faster learning group. Since training and learning are an ongoing part of the corporate culture, Holcim invests in employees’ personal and professional development from the start of their careers.
C. SWOT Analysis
1. Internal Environmental Analysis
Strengths:
The second largest manufacturer in Northwestern Italy after Italcementi
As a part of Holcim Group, shares its reputation of being a respected and socially responsible company with rich traditions in the world cement industry, which makes the customer to perceive it as a solid and prestigious company
Offers high-quality products
Famous for providing excellent technical assistance service
Great flexibility and reactivity to customer requests
Timely and prompt delivery of products to the clients
Offers flexible payment conditions
Innovative research and development of new technologies in order to offer improved cement products. Sophisticated, advanced technology know-how
High-tech machinery
Skilled personnel
Financially healthy
Management is currently strong
Weaknesses:
The small number of the factories and a relatively small product breath
Limited range of cement products, it does not offer Portland, Fly Ash and Slag cement types
Price is not competitive
2. External Environmental Analysis
Opportunities:
Technical requirements and the exchange of information have become more important
An emergence of sophisticated needs
Cement purchasing is becoming a more professional process
Increased demand for quality cement products
Reliable delivers and good customer service are becoming determinants of purchase decision
Building companies constantly change their building sites
Demand for non-blended pozzolanic cements, masonry cement and other specific cement types will increase by 201022
Cement demand is dependent on construction activities. There was a dramatic increase in residential and non-residential construction activities in Italy since 1998
Obtain additional capital needed for company’s development at lower cost
The development of construction technologies that use concrete over other traditional materials
The greater attention paid by designers to quality and durability, with a consequent increase in the average cement content in concrete
New technologies help save on energy costs by utilizing alternative fuels
Threats:
An intensification of the competitive process
More competitors offer a good technical assistance
Environmental regulations for cement industry are becoming tougher and tougher, that may change costs of obtaining operating licenses for cement plants’ workings
The fuel prices are growing and increasing the cost of production
The fuel prices increase freight costs, as Holcim has 3 factories from where cement should be transported and the product breath is small, customers may chose other supplier, considering the geographical proximity
How can Holcim Italia turn weaknesses into strengths?
The small number of the factories and a relatively small product breath
Holcim Italia has 3 factories in Northwestern Italy. These factories are situated around Milan, in different directions from it: northward, eastward and westward. The small number of factories means that Holcim has relatively small product breath.
Land transportation costs are significant and it used to be said that cement could not be economically hauled beyond 200 or at most 300 km. The price of long road transportation may even be higher than the cost price. Considering this, geographical proximity is very important determinant for most of the cement purchasers as they usually look for opportunities of cutting transport costs. Moreover, in recent years the fuel prices have significantly increased and, as a logic consequence of it, freight costs have increased too. Considering these circumstances, Holcim Italia cannot provide with its products businesses that are situated farther than 300 km from its factories. At the same time, Holcim’s main competitor Italcementi has broader coverage within Northwestern Italy as it has more factories.
In order to turn this weakness into a strength Holcim should target those businesses that have concrete manufacture activities around its factories. Holcim Italia should try to get these businesses to constitute company’s market share and not the market share of the competitors. Holcim Italia should focus on the areas where it has its factories and make better offers for cement purchasers of these areas than the offers of the competitors. The company should try to achieve high level of loyalty of all the possible businesses purchasing cement in these three areas, so that they do not purchase it from the competitors.

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