Mantero Seta Spa



Executive Summary


            This case analysis is cantered on the investigation of Mantero Seta Spa, a leading textile and silk industry in Italy who now operates through E-commerce and plans to operate in China and UK. The recommended company mission states that the firm should be driven to become the global leader for business-to-business (B2B) textile and silk distribution. The recommended values statement, on the other hand, emphasised the importance of fulfilling the company’s corporate social responsibility in the drive towards achieving organisational goals. Four company objectives were suggested, which included the improvement of their website and the diversification of their business ventures through lucrative business collaborations. An analysis then ensued, which comprised of the political, economic, social, technological and environmental aspects, as well as the state of competition and the underlying economics within the textile and silk industry (using Michael Porter’s Five Forces Framework). The analysis presented a generally favourable and conducive external environment for which Mantero Seta Spa could conveniently operate in. From such examination, it could be garnered that Mantero Seta Spa has the right mix of core competencies to be able to survive this industry perpetrated by E-commerce.


 


Recommended Mantero Seta Spa Mission


To become the global leader for business-to-business (B2B) textile and silk distribution to all business sizes and to further improve market leadership.


 


Recommended Mantero Seta Spa Values Statement


In line with our mission to become the world leader in textile and silk distribution, the fulfilment of our corporate social responsibility would take precedence over any profitability objective. The environment, community, diversity and ethics are positively connected to our aimed corporate growth, and would therefore take a holistic approach to doing Mantero Seta Spa business.


 


Recommended Mantero Seta Spa Company Objectives



  • To provide the highest quality products and services to consumers worldwide in order to further improve market leadership.

  • To expand to more business regions in order to establish a truly global presence in the textile and silk industry.

  • To improve on the company website for better user experience.

  • To further diversify our business ventures through studying potential business collaborations and determining which of the possibilities would present the most benefits for the company.


 


Introduction


It is now a widely held view that the world economy has entered a much more complex phase where individual national economies have become inextricably linked. In this new world economy, resources and markets have ceased to have the indelible national identity of the past. Restricted resources and markets that were once legally isolated have become much more accessible to enterprises that have acquired a global strategic vision. To the more visionary global enterprises, the world is but a borderless environment with homogeneous consumers who have developed an unforgiving taste for the most sophisticated and high-quality products. In response to the needs of these global consumers, the enterprises have developed global products. How such homogenised consumers are served, however, is a question of the strategic orientation of the enterprises and their ability to exploit the ever-evolving global economic environment.


With this regard, the Mantero Seta Spa, a company from Italy engaged in textile manufacturing and a leader in silk business plans to enter the Chinese and UK market.  From the given case, there are lots of factor that directly hit the business of Mantero Seta Spa. Basically, this paper will be discussing the status of Mantero Seta Spa with respect to four important details in an organisation i.e. Product Life cycle/Value chain, Key success factors, Competitive advantage and Market attractiveness.


 


Product Life cycle/Value chain


 (1985) in his seminal work of value chain proposed it as a tool to identify and to analyse the origins of competitive advantages and suggested that the activities of the business could be grouped into two: primary and support activities. What activities a business undertakes is linked to achieving its competitive advantage, and Mantero Seta Spa seemed to be best prepared to implement a global strategy, because of the superior competitive advantages of its foreign operations compared with other textile and silk business. It was not until 2003 attack in America that Mantero Seta Spa focused on developing a global strategy as a means to enhance its competitive position in the industry. Before then, Mantero Seta Spa largely focused on building a strategy that would allow the company to maintain its competitive position in its own home market, which was essential for progress. An analysis of the structural and institutional factors that shaped Mantero Seta Spa’s strategic response both to the new industry rules and the short-term challenges posed by other industry competitors explains this paradox. A number of broad sustainability challenges set the context for all of the value chain activities. These issues apply across the value chain: (1) Population growth; (2) Urbanisation; (3) Child mortality; (4) Maternal health; (5) Infectious diseases; (6) Biodiversity; (7) Loss of ecosystem services; (8) Poverty; (9) Education; and (10) Gender Equality. All these issues are attended to by the Mantero Seta Spa in alignment with their efforts to maintain sustainable competitive advantage through preserving the good public image that their clients expect from them.


 


Key Success Factors


The key success factors affecting the operations of the Mantero Seta Spa business comprising of the political, economic, social, technological and environmental aspects, as well as the state of competition and the underlying economics within the industry (using Michael Porter’s Five Forces Framework) is important because these range of factors would influence the business organisation’s decisions and its performance, leading to a better deployment of the firm’s resources within its external environment in order to satisfy its long-term goals.


Political.  With regards to the terrorist attack in 2001 and SARS crisis, there is a global economic slowdown in which most of the textile businesses suffers.  Since Mantero Seta Spa is in the process of globalising their scope of operations, they are naturally subject to international trade regulations, which make business operations considerably more intricate to perform. Consumer protection also is a major consideration, with the increasing number of consumer-protection laws abound in the China and UK market that seeks to look after the right of consumers, most notably in terms of product and service quality.


Economic. Economic growth for the target markets is extremely positive. China and UK are the targeted markets by Mantero Seta Spa current CEO. Actually, these areas are good textile and silk market in the world, next to the United States, whose market is now in its saturation stage, and the textile and fashion industry itself is shown to have a highly optimistic position in the future of the world economy, with what the increasing number of consumers in which their fashion sense is evolving. The movement to further industry growth would significantly increase the demand for the products and services that Mantero Seta Spa has to offer. Additionally, prior to the introduction of the euro, the dollar exchange rates are relatively stable. However, since its creation and adoption and off course terrorism cases, the exchange rate of the US dollar has show significant variability (2006). There is therefore the current need to coordinate and stabilise exchange rates on a world scale, as the US dollar is a key currency. This instability would significantly affect the way Mantero Seta Spa deploys their corporate resourced in the fulfilment of organisational objectives. Lastly, the textile and silk supplies industry is only in the early stage of the business cycle in the rest of the world where Mantero Seta Spa has yet to penetrate in, which spells out huge potentialities for business growth and development.


Social. Income distribution among target market of most businesses is uneven, as observed by several experts on the subject ( 1992;  2003; 2004), although an exclusive focus on the matter would give the impression that countries has done a way better job of maintaining income inequality low, which is directly affected by the industry’s business cycle. The primary consumers of the textile and silk industry are large business organisations engaged in fashion, that’s why most of the companies in this industry is classified as B2B. Businesses have fewer tendencies to change suppliers than individual consumers, as the cost to shift to another supplier is more costly for the former than for the latter, so it could be safely assumed that once the client is acquired, chances of changing suppliers is pretty slim. The main business is involved in the provision of textile and silk industry and it is much subject to fashion and fads, similar to the mobile communications industry or the clothing industry, in which consumer taste and preferences are relatively not predictable throughout the business cycle.


            Technological. In accordance to the development in Mantero Seta Spa, the B2B process in which they are engaged in is focused on information technology (IT) platform research, as opposed to product research and development focus of other industries, because most of the industry players’ main marketing vehicle is the Internet. Large government spending on IT platform research is observed of the Italy, while the China scene is on its way to developing more laws supportive of such research nature. As a result of the focus on IT platform research, very fast technological transfer is characteristic of the industry. Likewise, a very fast rate of technological obsolescence is also an attribute.


Legal. As with any other business industry of the world, there are rules and regulations that restrict or support the facilitation of the business in the textile and silk industry in the areas where Mantero Seta Spa operates. Currently, the Italy, UK and Chinese governments express support for this increasingly expanding and consolidating sector of the economy due to the large sums of taxes that it generates for the government.


Environmental. There are currently no major environmental issues faced by the industry, except for the ever-present textile and silk production issue which catch environmentalists’ attention die to the fact that some of its raw materials and from the skin of rare animals.


Threat of New Entrants. The threat of new entrants is very high due to low entry barriers to the industry. The economies of scale, i.e. the very competitive prices in the industry, the not-so-large amount of capital and investment requirements and the easy access to industry distribution channels are some of the contributors to the low barrier of entry to the textile and silk industry.


Threat of Substitutes. Threat of substitutes is also high, as the price to shift from one textile and silk provider is relatively small. As companies are often looking for ways to save on company resources through buying cheaper textile and silk products, the buyer’s willingness to substitute is pretty high. Also, the relative price and performance of the substitutes, coupled with the relatively low cost of switching to substitutes present a grave threat.


Bargaining Power of Buyers. As there are still a few B2B textile and silk retailers worldwide, the bargaining power of buyers is not as great coupled with the industry being a key supplying group for the buyers, which in this case, are large companies.


Bargaining Power of Suppliers. There are a lot of dominant suppliers in the industry, but they so far have not threatened to integrate forward to the industry, or threaten to set up their own retail outlets due to absence of strong Internet presence and powerful IT platform, so the bargaining power of suppliers is relatively controlled.


Intensity of Rivalry between Competitors. Rivalry is not very intense, as there are only a few dominant industry competitions, and fewer still have powerful and fully integrated IT platforms.


Competitive Advantage


Mantero Seta Spa’s competitive advantage in the textile and fashion industry of the Italy is mainly their admirable portfolio of references. With their years of experience and dominance in the market in providing textile and silk products, they have gained a long list of loyal clients who have impressive business backgrounds by themselves. This promotes the corporate image of Mantero Seta Spa to potential customers as one of trustworthiness and quality. If such companies in Mantero Seta Spa’s references were deeply satisfied with the products and services that Mantero Seta Spa provides, larger chances of attracting possible additional clients in their already long list are sizeable. This portfolio of clients could be Mantero Seta Spa’s most effective marketing tool yet. On a more general context, the competitive advantage of Mantero Seta Spa could be pointed at their good record in being able to keep clients satisfied, which is an attribute that not all rivals in the business can boast of. Another competitive advantage of the organisation is their ability to maintain market leadership in the Italy even after the entrance of multinational companies in the same line of business with better technologies and more market scope than Mantero Seta Spa.


            Another Mantero Seta Spa aspect which can be considered as a core competency is their strategic business planning. Their planning is about setting a direction for the business, a direction to which everybody, executives and employees become committed. It ensures that every part of the company is in harmony, moving towards a clear business purpose that will give Mantero Seta Spa further competitive advantage and improve its performance even more. With the planning of Mantero Seta Spa’s business come actions or decisions with high impact, or those decisions that affect the company strategically, rather than those that merely concern its normal operating routine. Most of those decisions concern for instance, changing the business model, focusing on new market sectors, fundamental improvements in customer service, making critical investment decisions or obtaining a better return on research and development expenditure. Such action or decisions affect Mantero Seta Spa’s long-term performance and enable it to achieve its competitive advantage.


 


Market Attractiveness


It cannot be denied that the world is full of competition and it is essential that every individual should have the ability to compete especially those who are assigned to mange people in organisation. Perhaps, it can be considered as the greatest challenge in every organisation particularly to international organisations to have members who will contribute to the growth and development of an organisation.  Furthermore good management skills are very important in order to achieve the mission and reach the vision of a certain organisation. Every organisation has work to do in the real world and someway it has responsibility to measure how well that work has been done.


With regards to the market attractiveness, three factors should be considered i.e. segmentation, targeting, and positioning strategies of the company. In the same manner, the justifications on the decisions on employing these strategies will also be given. 


 

Segmentation


 (2004) defined the segmentation activity as “the act of dividing a market into distinct groups of buyers.” This indicates the process have to deal with the general market and possible buyers of the products of Mantero Seta Spa. In looking at the market, it seems that it could be identified and considerably large to acquire some level of profit for the company. With the platform used by the company, i.e. the internet, the consumers could easily reach the company provided that they have ready access to the web. In the same manner, those who intend to purchase the products of the company are easily reached by the company given that an account will be made on their name. However, given that the company is rather new in the market of China and UK, the potential consumers may yet display some responsiveness on the site of the company. Although the company is engaged in B2B marketing, they can now also get the individual users because of the internet,   


 


Targeting


In the same account,  (2004) defined targeting as “the act of developing measures of segment attractiveness and selecting one or more market segments to enter.” Although, the company is most likely related to B2B system, they may now target individual who have access to the internet. These segments are targeted given that these individuals have more time to access the web and are more inclined to purchase head gears as a part of their fashion statement. Based on the market, there is no particularly strong competitor that holds most of the market share. However, there are a considerable number of sites that offer the same services and products as those offered by the company. Being an online company, the consumers are able to substitute the services and products forwarded by the company with those in malls and other specialty shops within their community. However, it must be emphasised that the designs, artworks, and quality of the products of the company are exclusively distributed by the company. This means that there is some equal footing in the context of power with the suppliers and buyers in the market.   


 


Positioning


The act of positioning is characterised as “the act of designing a set of meaningful differences to distinguish the company’s offer from competitors’ offers.” (2004) Given that there is a considerable number of players in the industry and possible competitors in the web, the company has to position itself in terms of high quality items and well designed works along with a prompt service delivery. Along with these, the company will also attempt to sell the items in a slightly lower price as compared to its other competitors in the web.  On this manner, the consumers will be able to find more value for their money. On the same account, the company will be using marketing techniques such as word-of-mouth and product endorsements such that the public may become aware of the brand and products of the organisation.


 



Credit:ivythesis.typepad.com


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