The competitive advantage of made in Italy small and medium enterprises: four succesful business cases

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Institute of Applied Economic Research, Director, Busto Arsizio (Varese), Italy. PhD in Business Management, Professor

The competitive advantage of made in italy small and medium enterprises. Four succesful business cases

Fabio Papa

Abstract

In eighth place for Gross Domestic Product (GDP) and with an economy made up of 96% Small and Medium Enterprises, Italy has always been considered a reference point for the high added value of its products. In this context, the present document intends to offer an in-depth analysis of four Italian companies - Nol-Tec Europe S.r.l., Triulzi Cesare Special Equipments S.r.l., Lumina S.r.l., Foppoli Bramin S.r.l. - belonging respectively to the following sectors: (i) process industry (ii) mechanical engineering (iii) agro-food (iv) wood industry. Despite the different areas in which they operate, these companies share some elements that are often found among the Made in Italy excellence cases. These aspects will be thoroughly analysed in this paper.

Keywords: Made in Italy; Small and Medium Enterprises, Generational Change; Heritage; Innovation; Competitive Advantage; Family Business.

Introduction

Widely appreciated worldwide thanks to the excellence of its products, Italy boasts an economy composed of 96% by Small and Medium Enterprises

(SMEs), which have chosen respect for their tradition as the primary source of their success. As a result, these enterprises have often been able to generate a lasting competitive advantage over time, allowing them to be appreciated and well-known both in the local and international market.

This is confirmed by the fact that, despite being active in four different market sectors, Nol-Tec Europe, Triulzi Cesare Special Equipments, Lumina and Foppoli Bramin have been able to find the perfect combination between future orientation and respect for their heritage, becoming a flagship of Made in Italy. In fact, it is between innovation and tradition that these companies have been able to achieve a competitive strategy that allows them to daily compete with the major players in their markets.

In this scenario, among the most important determining factors of their growth, there are undoubtedly the competences and management skills of their respective owners, acquired over years of experience and handed down through generations of entrepreneurial families. More specifically:

Fabio Novelli's (founder of Nol-Tec Europe) business knowledge represents one of the company's main strengths. Fabio Novelli himself comes from an entrepreneurial family - his father, Albino Novelli, was able to pass on to him the necessary human and professional values to face the corporate world with passion;

under the reins of three sisters - Roberta, Mariella and Giovanna - Triulzi Cesare Special Equipments has managed to preserve the technical- design know-how generated by their founding father, Cesare Triulzi. This historic success has been constantly renewed over time, also thanks to the second generation of entrepreneurs - who have further developed the family business while fully respecting the traditions enshrined by Cesare;

in the same way, the four Lumina sisters - Claudia, Paola, Sara and Tiziana - have proven themselves skilful in running their family business, handed down by their father Sergio Lumina. The company is now in its fourth generation of management and represents a point of reference in its market;

finally, a particularly long-lived path has characterized the Foppoli Bramin business, today led by Simone Foppoli, an entrepreneur at the head of a company with over 100 years of history and handed down for five generations; an extraordinary case of Italian entrepreneurship, crucially powered by strong local and family values.

In three of the four cases mentioned above, the generational change, intended as the transfer of leadership and property of an enterprise from one generation to the other, plays a crucial role for the success of Italian companies and for the maintenance of tangible and intangible values. Values that are widely recognized not only in the Italian context but also abroad, and that will be discussed in more detail in this document. In this regard, the four business cases are presented below.

Nol-Tec Europe S.r.l.

Company history

After meeting the American company Nol-Tec Systems inc., Fabio Novelli founded Nol-Tec Europe in 1998 in Gorgonzola (MI), aiming at becoming a benchmark in the market of industry process solutions. After moving to the new company headquarters and purchasing the first factory in Pessano, in 2003 Fabio Novelli became more and more famous until, in the same year, he founded his first subsidiary company (Normicom S.r.l.), specialized in the marketing of components and machines for material handling. Then, in the two- year period 2012-2013, following a clear strategy of opening to global markets, Fabio Novelli manages to seize a commercial opportunity in Chile, a step that will ensure Nol-Tec Europe's success worldwide.

In fact, thanks to Novelli's entrepreneurial skills, the company managed to obtain a series of highly strategic orders and Novelli was able to start a new business within the South American market, Nol-Tec Chile, managed by a trusted sales manager. Soon after, Novelli also created the NTE Process brand to further strengthen his company's market positioning. Then, a new subsidiary, Engine Technology Solution S.r.l., was established in 2017 in Padua, specializing in project management and aimed at assisting Nol-Tec Europe in peak workflow periods through qualified outsourcing. The following year Tri-Mer Global Technologies S.r.l. was founded, in partnership with the American associates of Tri-Mer Corporation, introducing the business of high temperature filtration plant for dusts and gas cleaning in the European market. 2019 was also an important year thanks to the purchase of the second factory in Pessano and the expansion of the 1:1 -scale Pilot-Plant dedicated to the Research & Development department. This choice created a proper and one-of-a-kind Research Centre for process & material handling, providing the company with a renewed competitive advantage.

Nol-Tec Europe: overview and critical success factors

Among its many strengths, Nol-Tec Europe stands out as a Single Source Provider able to assist its customers in every phase of plant creation and providing, at the same time, cutting-edge solutions. In particular, in addition to its patented technologies and international partners, Nol-Tec Europe is able to combine the complete customization of the designed plant to the high quality of the products offered. The competitive environment of this company is very wide - since Nol-Tec Europe is present all over the world. More specifically, the domestic market contributes for about 40% of the turnover, while the foreign market covers the remaining 60%. In this context, the business efforts made by Fabio Novelli largely concern non-EU countries, where - unlike in Europe - pneumatic transport is not a commodity yet and where there is therefore a considerable untapped potential in this field. Moreover, thanks to a rich set of process solutions (ref. pneumatic transport, pneumatic mixing, atomization, industrial drying, storage, dosing, filters, etc.), all designed according to specific needs, the company serves a very diverse customer base, from small and medium enterprises to globally-known large corporations, operating in various industrial sectors (ref. food, environment, rubber, mining, oil, power energy, construction, etc.). Last but not least, Nol-Tec Europe's competitiveness is also based on strict management supervision ensured by Fabio Novelli and his sister Roberta, both supported by their father Albino. In this business case, family union is still one of the keys to the company's success both in Italy and abroad, with the Novelli Family determined to further develop its entrepreneurial structure. This was confirmed by the creation of NTE Holding in 2019, with the aim of providing further vigour to the projects of the entire business group.

Triulzi Cesare Special Equipments S.r.l.

Company history

Triulzi Cesare Special Equipments S.r.l. was founded in 1952 - by Cesare Triulzi - in Bovisio Masciago (MB) in a craft workshop involved in the production of machinery for washing and drying glass. In more detail, in the `60s Cesare Triulzi became well-known participating to important international fairs, where he received an increasing number of requests to expand its product range. An important turning point for his entrepreneurial activity took place in the early `70s with the relocation of his headquarters in Limbiate (MB) - where the production plant is still located today. The second generation of entrepreneurs joined the company in the `90s, contributing to the consolidation of its organizational structure and to the improvement of the business performances with new ideas and a renewed entrepreneurial enthusiasm. In fact, despite their young age, the three sisters Roberta, Mariella and Giovanna Triulzi brought in competences and experiences developed in different but complementary learning paths, and thanks to their dedication and strong attachment to their family business, they were able to successfully overcome a number of obstacles also linked to the lack of an engineering background. Subsequently, the company launched a new department dedicated to the photovoltaic sector, focused on the creation of machines for washing solar panels, and it became increasingly interested in new fields of application until in the 2000s it opened up to the automotive, construction, interior design, household appliances and refrigeration counter markets. Finally, in 2017 Romeo Bovi, husband of Roberta Triulzi, joined the company. His contribution has been instrumental for the development of the technical and organizational field and has allowed the company to accelerate its growth both from a technological and from a production innovation point of view.

Triulzi Cesare Special Equipments: overview and critical success factors

Triulzi Cesare Special Equipments currently is one of the leading companies in its market, offering a whole range of integrated solutions. In fact, the company offers a wide variety of products, consisting of different types of washers for glass surfaces, such as systems for insulating glass and laminated glass. In fact, the company offers a wide range of products, consisting in different types of washing machines for glass surfaces, such as plants for double glazing and laminated glass. The company serves a wide and diverse customer base, ranging from large foreign groups to small businesses and artisans in different sectors. Undoubtedly, the high-quality standards and the strong customization of the machines designed by Cesare Triulzi himself - a byword for guarantee, reliability and innovation - allow the company to leverage on a strong and recognised brand even outside national borders. The result is a wide competitive environment, due to the presence of the company on the international market; in fact, about 80% of its turnover come from foreign countries, such as the United States, Russia and Canada. Finally, Triulzi Cesare Special Equipments insources only some phases of the production process (ref. planning and assembly), outsourcing the rest of the activities to carefully selected, specialized companies under a strict supervision. This strategic choice resulted in an increase in the company's competitive performance, especially in recent years, and over the next decade it aims to further expand its business influence worldwide.

Lumina S.r.l.

Company history

Lumina's story begins in 1902, when Luigi Lumina - known as "Luis Gonzaga" for his refined and sophisticated manners - decides to open a grocery store in the center of Bormio (SO). Lumina's entrepreneurial path is further developed by the son Oreste, who became well-renowned and received recognition for the quality of his products and the careful selection of meat to be salted and marketed throughout the Valtellina, land of wonderful flavours and enchanting mountain landscapes. In the following years a second shop was opened in Bormio, and in the `80 the ownership of the company was passed on to Sergio Lumina and his two brothers. Given their ambition to expand his private- customer clientele to include hotel chains and restaurants, in the '90 Sergio Lumina purchased his brothers' shares and decided to build a new site where he would centralise the production of meat and meat products, shop sales and the logistics necessary to the deliver the goods to his new customer segment (ref. hotels and restaurants in the area). Alongside Sergio, first Claudia and Paola, then Sara and, finally, in 2000, the youngest of the four sisters, Tiziana Lumina, joined the company. Over time, the company has developed a catering service for the many hotels and restaurants in Valtellina and, since 2012, thanks to a home delivery service, it has been offering private customers the unique opportunity to taste its typical products.

Lumina: overview and critical success factors

Thanks to an over-a-century-long experience and the vitality of the company's all-women top management, Lumina has become a well-known and appreciated business as a result of its very high-quality products, guaranteed by prestigious national and European certifications. In addition, the company has been able to spread its name throughout the Valtellina also thanks to a fast and 90 precise delivery service - which allows to receive the portions of meat selected by the customer and packaged in such a way as not to affect its amazing properties. The company also shows particular attention to the customers' needs through original initiatives such as, for example, the possibility to realize the now famous "Cestini Lumina", gift boxes for every occasion - that have had a huge success throughout the Valtellina region. In the same way, the company's competitive environment is moderately limited, since it mainly serves the Valtellina area (Sondrio province). At the same time, the company offers a variety of food products (ref. meat, cold cuts, fish, cheeses, frozen foods, baked goods and pasta), serving different customers, from the shops of Bormio and Livigno to hotels and restaurants. This is also why Lumina stands out as a true market-leader in the Upper Valtellina area, representing, in fact, a point of reference for the whole local community. competitive strategy skill outsourcing

Foppoli Bramin S.r.l.

Company history

In 1890, Abramo Foppoli founded the company Foppoli Bramin in Mazzo in Valtellina (SO), specializing in the artisanal production of rakes and wooden handles. After more than a century of experience, the company has become an excellent example of business promoting high-level Made in Italy products all over the world. As a result, in 2008, Foppoli Bramin was awarded an important recognition by the Lombardy Region for the longevity and quality of its products. In fact, the care for every aspect of the supply-chain is paramount for the company - from selecting the best materials to paying great attention to every production stage - and it boasts a cutting-edge production plant, made up of automatic systems and state-of-the-art machines. Thanks to these efforts, Foppoli Bramin's fame has reached European and non-European countries, allowing the company to expand its business relationships in the Middle East and North Africa. Now in its fifth generation of family management, the company is currently led by Simone Foppoli - an entrepreneur open to innovation and proud of his roots. Simone received from his father Giovanni a very valuable know-how on the world of wood and its entire processing. For this reason, Foppoli Bramin proves to be very environmentally friendly - thanks to ecological painting procedures and the FSC (Forest Stewardship Council) Certificate, which makes the company even more competitive, not only at local but also at international level.

Foppoli Bramin: overview and critical success factors

Operating in the fields of agriculture, construction, deforestation and gardening, Foppoli Bramin is able to meet the different customers' needs by offering highly customized solutions. In fact, the company has been very skilful in combining the enormous experience accumulated in over a century of activity with today's technologies, making innovative products. This particular ability, which was further developed by Simone Foppoli, generated an unprecedented international growth, with orders coming from all over the world. In this context, the competitive environment can be considered moderately wide, given the company's current presence on the international market and its dedication to the continuous search for new business deals. In addition, its product range is highly customizable, thanks to manual processing and software equipment integrated with machinery: this allows a real-time response to different market requests, further increasing the company's output efficiency. Finally, the company's customer base is wide and diverse, ranging from large-scale distribution to local businesses and making Foppoli Bramin a point of reference at national level. But the company's market positioning is only likely to expand over time, thanks to the new entrepreneurial developments that Simone Foppoli himself plans every day.

Common features of Made in Italy enterprises

Introduction to the concept of Made in Italy

Introduced in the late 1980s, the term Made in Italy is used by Italian producers as a "COO - Certificate of Origin" to protect and promote their products to face the increasingly widespread imitations. As we all know, Italian products have managed to achieve a prestigious and important commercial advantage over time, so much so that today Made in Italy is still an emblem of "craftsmanship" and acts as an "umbrella brand" for other brands that are less known by the general public, ensuring global appeal. Having a product classified as “Made in Italy” is regulated in accordance with Italian legislation, which grants the application of the Made in Italy label to a product only in two cases: (i) when the production was entirely carried out in Italy (Law 350/2009) or (ii) whether the main and characterising stages of the working process were carried out within the Italian boundaries (L.d. 135/2009). From footwear to furniture, from cars to food and wine excellences, Italian articles that have this “title” are particularly desired and appreciated in world markets thanks to their undisputed quality. In particular, the main characteristics of Made in Italy can be summarized by the following points: (i) excellence, (ii) high specialization of production techniques, (iii) industrial agglomeration and (iv) geographical origin. In particular, the industrial agglomeration activity (also known as "clustering") is a key aspect, since it is rarely used in other countrie's production systems. In fact, such 92 paradigm is the result of the specialization in the production of a particular item - around which a production process is created that is often identified within the so-called "industrial districts".

Common characteristic of Made in Italy enterprises

As shown by the four business cases analysed in this document, Nol-Tec Europe, Triulzi Cesare Special Equipments, Lumina and Foppoli Bramin have very different stories, products and development processes. On the other hand, in addition to the concept of family business and belonging to the world of Italian Small and Medium Enterprises, some common features among the four different companies can be identified, corresponding to the identity characteristics of the Made in Italy concept. First of all, creativity, that is the ability to intercept new needs in an original and effective way; this is widely seen in all the analysed companies. Secondly, emerges the craftsmanship stands out, that is "the art of know-how", which can be found as much in Nol-Tec Europe as in Triulzi Cesare Special Equipments, Lumina and Foppoli Bramin - all companies able to combine manual production with new technologies, new services and a high degree of specialisation. Last but not least, despite the significant growth experienced over the years by all the analysed businesses, the concept of family emerges as a third key element, and as the keystone around which several generations converge in the name of a common heritage, made of local traditions and profound human values.

Conclusions

To complete this analysis, we can state that the link between competitiveness and the values that define a Made in Italy company is manifested through the pursuit of a differentiation competitive advantage. This is also proven by the fact that each examined company places the customer at the core, with the aim of satisfying different needs, offering "an industrial tailoring experience" - able to continuously innovate while preserving the typical craftsmanship of Italian production. This is confirmed by the fact that Nol-Tec Europe is able to create a totally tailor-made design, also thanks to the high level of engineering specialization that the company has. Triulzi Cesare Special Equipments also offers the opportunity to design and assemble customized machinery, according to the buyers' specific requests. At the same time, Lumina differs from competitors thanks to a particularly accurate service (e.g. very short delivery times) and a keen attention to every product detail. Finally, Foppoli Bramin offers customized solutions to the needs of the individual market, ensuring a worldwide high-quality profile both for their products and the services. In this scenario, thanks to their strong customer focus, their brand's excellent reputation and their offer's high customization, the analysed companies have not only managed to withstand the changes of the external environment, but also to obtain excellent results in terms of economic and financial sustainability - performing averagely better than their direct competitors. In conclusion, these Made in Italy enterprises represent the real source of competitive advantage for Italy as a whole. The reason for this is that these jewels of economic science are able to constantly (re)combine entrepreneurial ingredients that can make the difference. This is the true (hidden) strength of Italy. And it is destined to be handed down for generations to come.

References

1. Cerved SMEs Report 2019.

2. Documentation from the interview with Nol-Tec Europe's property.

3. Triulzi Cesare Special Equipments.

4. Documentation from the interview with Triulzi Cesare Special Equipments' property.

5. Documentation from the interview with Lumina's property.

6. Documentation from the interview with Foppoli Bramin's property.

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