Manufacturing in Italy – choices made by the 300 year old Richard Ginori porcelain factory

An article in the New York Times (February 9,2013) describes the travails of the Richard Ginori porcelain factory in Sesto Fiorentino, Italy and its recent bankruptcy and closure. Once a high end porcelain tableware manufacturer, the trends in Italy away from formal dining and towards lower end products with a 60 % market share garnered by Chinese suppliers, have squeezed demand for Richard Ginori’s products. The company shifted from the high end decreasing demand to the lower end larger volumes and ended up being uncompetitive. Given the high labor costs in Italy and the high labor content in their products – is this an industry that needs to move to a more globally competitive location or is there an alternative strategy to preserve the craft content in Italy to enable future innovations in the field ? Are the company’s current problems a reflection of strategic errors or an inevitable outcome of globalization ? Are consumer preferences away from fine dining and thus lower demand for their products a suggestion that the company needs to examine its capabilities and shift to other high end products through brand extensions ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , . Bookmark the permalink.

One Response to Manufacturing in Italy – choices made by the 300 year old Richard Ginori porcelain factory

  1. I guess it is my design bias, but couldn’t the porcelain manufacturing process become more automated? Automation helps keep manufacturing in higher income countries. I think the problem with Ginori is that their specialty was not designing new equipment but making better porcelain. Since the porcelain demand shifted, they did not properly adapt.
    The best cymbals are made by hand because they sound the best. There is a demand for great sounding cymbals, so the skilled labor required to manufacture them is relevant. You can make cheap cymbals with cheap labor hammering away, but they don’t sound as good. If drummers just wanted cheap cymbals, then the big companies would have to shift to mass production. The big cymbal makers have already put those systems in place, so the 400+ year-old, American company Zildjian is already in a position to mass produce cheap cymbals if the demand moves towards the cheap instrument.

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