Introduction

Lavazza is an Italian manufacturer of coffee. It was founded in the year 1895. Initially it was a small grocery store at Via San Tommaso 10. It is administered by the third and fourth generation of the Lavazza family. Lavazza imports coffee from around the world including Costa Rica, Uganda, Mexico, United States, Colombia, Indonesia, Honduras, Brazil and Guatemala (Lavazza.com, 2019). Branded as the best coffee in Italy,  16 million people out of 20 million choose Lavazza for purchasing coffee.

Sector Market Benefits and attractiveness:

 Lavazza, an Italian based company, has no issues related to distribution in the EU as the company does not call for tariffs among all its members. Overall, the company has a very stable political environment. The main reason that could trouble to the trade initiative could be political instability in form of war in the nations with which Lavazza indulges in trade relations (Thurston, Morris and Steiman 2013). Another reason, which could be matter of concern for Lavazza, is the imposition of excise duties both by the Italian government and by the nations with which Lavazza has trade relations. The factors that influence the global business of Lavazza’s products is the method of documentation and simplified procedures in the international trade. The company aims at fulfilling the needs of the customer by providing unique products from its competitors and in turn become the market leader. The market of coffee in Italy has become stagnant. The market is too mature to major growth in volume by any of the coffee shops. This growth is due to the increase in population and in turn income of the people in Italy. Thus, Lavazza has a great opportunity is showcasing its unique products in the market of Italy.

Industry Attractiveness

The economic factors in Italy are quite stable. The transportation cost are falling in the country and thus, Lavazza can easily expand its businesses (Cerutti and Buchi 2018). The company imports its products from various parts of the world, via overseas. It is imported mainly for the retail coffee shops, which in turn enhances the revenue generation and profit of the company Lavazza. Italy is the second largest importer of coffee beans (green) in European market, which has been only surpassed by Germany. Coffee is a major part of Italian culture. Italians value high-quality coffees, and are loyal to certain flavors and brands. Italy on the other hand, is an essential supplier of both roasted coffee beans and green coffee to all other places of Europe and United States. Thus, Lavazza has a great scope in exploring this industry with more unique products and services than its competitors explore in order to become the market leader. Italian espresso is very famous in the entire world, and the coffee brands of Italy are exported to all parts of the world. Thus, Lavazza by producing the various flavors can attract more customers worldwide. Italy is the best market place for Lavazza to grow their brand and create a brand image in the minds of the customers.

Market Attractiveness

Lavazza is a very popular coffee company in the world. It is best at producing coffee and other products like tea, mugs, paper cups, ashtrays, umbrellas, calendars, desserts and coffee machines. Lavazza promotes its product using various methodologies. It portray the fact that the products can  be used anywhere like at home, workplace or even at the coffee shops which is very alluring to the customers and mainly for the coffee lovers, coming from different backgrounds (Cerutti and Buchi 2018). The company has taken an initiative called ‘Tierra’, which influences the customer and their choice of coffee shops. The customers get the chance of tasting the flavors of the brand in local coffee shops. Lavazza uses the new technology for cleaning the coffee beans and the tea leaves which helps Lavazza in producing the end products faster and with better quality than its competitors in order to have an competitive edge in the market of Italy and outside. Lavazza also uses certain new technologies for providing coffee to the customers right to their doorstep which is carried out through online transactions and online ordering by the customers residing in the country, Italy.  Thus, Lavazza offers better deals to its customers.

Differentiation, innovation and customer satisfaction:

Sustainable Advantage:

Lavazza has followed the competitive strategy in order to achieve competitive advantage. This strategy mainly focused on the low price policy, differentiation and no-frills. Lavazza has improved its quality of products over the years (Madsen and Walker 2015). It has come up with unique products which are not easily available in the market. Lavazza’s main aim was to satisfy the needs of the customer’s by providing them the best quality and unique product. With the increasing competition in the market, Lavazza finds it difficult to continue providing the variety. They, they provide the customers the similar products at a lower price which is comparatively much lower than the other market players are (Cerutti and Buchi 2018). Lavazza by their strategic approach caters to each of the markets overseas. The company is looking forward to improve their rate of growth through international operations by increasing its foreign sales by 60 percent. Lavazza has direct subsidiaries in markets of Germany, France, United States and United kingdom. Lavazza in the market of Australia distributes through its partner Valcorp. Thus, these strategies are helping the company to expand its business and develop a vast industry for the coffee lovers around the world.

Conclusion:

Thus, Lavazza is doing business to be the market leader and grow a positive reputation in the market. Lavazza is coming up with new, attractive and unique products in order to make the products and services worth the value. The stable economic condition of Italy has helped Lavazza to grow in the market. The company’s initiative called ‘Tierra’, had influenced the customers and their choice of coffee shops and thus, increased the customer base and in turns the profits of the company.

Reference

Cerutti, M. and Buchi, G., 2018. Sustainability and supply chain empowerment: The Lavazza case. Symphonya. Emerging Issues in Management, (1), pp.39-47.

Lavazza.com (2019). English. [online] Lavazza.com. Available at: https://www.lavazza.com/en.html [Accessed 9 Jul. 2019].

Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.

Thurston, R.W., Morris, J. and Steiman, S. eds., 2013. Coffee: A comprehensive guide to the bean, the beverage, and the industry. Rowman & Littlefield Publishers.