Gallo Rice

3603 words 15 pages
1. What is special (different) about F&P Gruppo? Why has the company been successful? First of all, F&P Gruppo describing itself as "the rice specialist" was exceptional, because it was one of few companies in the world so vertically integrated, involved in entire process of growing, milling, packaging and marketing rice. The advantage of such organization was control of the quality and the ability to react quickly according to market changes. The company decided to trade off other products than rice appointing itself as a goal achieving market share leadership through bringing differentiated, higher margin products. F&P Gruppo was investing heavily in Research and Development, because new products were supposed to derive 35% - 40% of …show more content…
Also, both these markets were pretty saturated with different varieties of rice products, which again is not the issue in case of Poland. Polish underdeveloped retail sector, infrastructure and distribution channels were definitely weak points and mayor differences as compared to ones existing in Italy and Argentina. While in Poland there was low per capita consumption of rice (2.3 kg per annum in 1991) Italy and Argentina had the same, much higher per capita consumption level (8 kg per annum in 1991).
Gallo Rice producer established a subsidiary in Argentina and approximately 90% of sales were made through a company sales force, while 10% was sold through agents serving remote areas. Completely different system was used by F&P Gruppo in Italy, where most Gallo products were sold to retailers through a network of 60 agents and brokers, not by a company sales force. The reason behind it could be that agents and brokers might have been more efficient in Italy than in Argentina. While it is impossible to set up rice plantation in Poland, Gallo rice exports rice to Poland, but uses it's agent to establish a private distribution company, Argentyna Ltd. Then local, secondary distributors, who knew the market, distributed directly Gallo's products to other, smaller markets. Initially, at that time F&P Gruppo didn't want to invest in any

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