PERFETTI VAN MELLE GROUPS

GLOBALISATION STRATEGY
INTRO
 SWOT Analysis
STRENGTHS
Strong Brand Value: Perfetti is a highly popular brand and has a strong
position in the worldwide confectionary market.
Affordability: Perfetti has worked hard to ensure that its product reaches
higher proportion of population by offering single tablets of chewing gums
and toffees for Rs. 1
Good margin for retailers: The company is providing a good margin
(substantially high but yet attractive) to its retail counters, giving them an
edge over competitors product
WEAKNESSES
Limited consumer base: Most of its products are targeted towards children
except for chlormint like product, perfetti needs to expand its product
portfolio
Absence in North American market: North America is a key market for all
confectionary products, prefettis minimal presence may become a serious
disadvantage for the company.
Shortage of stands: Products demand is quite high due to intensive
promotion on television but shortage of stands for big packs at retail
counters might pose a threat to its sale.
OPPORTUNITIES
Expanding into new products: With such strong global distribution
capabilities and large revenues, tapping into new markets like chocolate or
new set of snacks should be considered by the company
Separate distributor needed: The product requires sole snack selling
distributor sue to lack of interest of confectionary selling distributors. The
distributors are demanding extra carriage cost sue to its space consuming
cartons. Otherwise the distributors might dump the whole snacks
consignment into the wholesale markets which might affect the sale of the
product and its availability in the retail market

THREATS

Competitors selling extra: All the major brands in competition like Bingo,
Parle are giving some percent extra in their packs resulting in large
looking package and thus eating perfettis market
Shift towards healthier diets: This has led to people consuming less of
sugar products which is highly dangerous for perfetti due to its focus on
sugary foods.
Key strategic challenges and objectives
 Difficulties of operations in Viet Nam

Difficulties of operations in Viet Nam

Cultural aspect
It is hard to combine and integrate Western and Vietnamese managerial styles and
skills (opened for communication vs. respectful and afraid of people at higher level;
action- oriented in decision making and implementation vs. official meetings; and
verbal orders vs. written orders etc.)
Language barrier hindered the communication and transmission of Western
managerial concept.
Lack of cooperation between people. Vietnamese people always see and criticize
the weakness of other people instead of trying to help them to improve.
Local workers have low level of experience, skills, knowledge, understandings and a
poor consciousness toward safety, and hygiene, which result in low ability to learn
technology and changing bad habits.
Local middle managers also lack of education and background.
Pefertti Van Melle Viet Nam (PVM Viet Nam) was established in August 1995 under a joint venture
contract with Saigon Foods Stuff Company (SAFOODSCO), in which Perfetti contributed 70% of capital.
The remaining 30% was invested by Vietnamese partner in the form of land use right. Initially, the joint
venture was named Perfetti Confectionery Viet Nam Ltd. The reasons for selecting partner were
governments force at that time, and partners capability in producing glucose - one of the major raw
materials for Perfettis operations. The only motive to operating in Viet Nam is to expand PVMs market
to a country where young population is significantly increasing.

In May 2002, the company switched to a 100% foreign invested

enterprise in order to respond to the needs of development, but PVM
Viet Nam is still maintaining a good relationship with the ex-partner.
Currently, the local plant offers the market its products under the brands
of Happydent, Alpenliebe, Golia, and BigBabol. PVM Viet Nam is directed
by an Italian expatriate General Manager.