Impact of Global Financial Crisis on Exporting Strategies in Italian Home Appliances Industry

INTRODUCTION  
There were several reasons of selecting the topic for bachelor final paper. The most 
important was author’s interest in both specific Italian industrial sector and macroeconomic 
turbulence in respect to the internationalization processes of companies. Since 2008 to 2009, when 
global financial crisis spread over many countries, those involved in trading, the way of conducting 
export activities has changed. The aftermath of global financial turbulence still is being felt in 2013 
in many industries. The professional author’s observation led to creating a hypothetical statement 
that many industries after severe impact on financial markets and international trade were affected 
and were forced to rapidly change their export strategies.
It is so defined the research problem : how companies can survive and eventually exploit 
opportunities in difficult time. How to find synergy among all resources, financial issues, profit and 
sales. Whether companies are able to adapt their strategy; if they have enough flexible structure and 
organization to avoid financial distress; also if they have enough skilled management and personnel 
to cope with these issues and what specific, if any, strategy are they implementing. 
It is known that a company can choose between mainly two type of exporting strategies : 
direct and indirect export. While a company starts to export, it may either by well defined strategy 
either just to satisfy some needs of clients. In this case, the exporter, didn't plan any strategy for 
exporting but it just answers specific requests from abroad (or eventually from local market which 
export). Contrary, if the company (management) decided to make a well defined strategy to start 
exporting, will probably choose some options. So, direct or indirect strategy will be the first choice. 
Whether the company budget and fund capacity is low or weak, the choice will be probably for 
indirect export. In the other case, if the company is better structured, then the choice will be for 
direct export. 
This paper will be focused on domestic appliances industry in Italy. Thus, the aim of paper 
is to provide a basic and general understanding of how the global financial turmoil impacted some 
manufacturers of home appliances in connection with their internationalization process and export 
strategies in Italy since early 2008 to early 2013. Work is characterized by an emphasis on general 
understanding about the particularities of companies in a specific industry and the way they adjust 
export strategies during a difficult time like crisis and economic downturn by using qualitative 
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methodology and in-depth interviews.
To achieve the goal of paper, the following objectives were stated:
 Assessment of general export framework for companies, motivational factors for exporting 
and general export rate.
 Understanding whether and how companies were affected by global turmoil, especially in 
export operations, export strategies.
 How, if so, companies had credit issues in financing export processes and how eventually 
the company solved these issues.
 To see if companies were and still are able to find solutions for the previous issues.
 What, if applied, are the organizational and/or structural changes that the companies had to 
plan and to implement.
 Despite the crisis, whether the company is able to measure and assess its export 
performances.
 To discover, those competitive advantages the company think to have and to use for the next 
years in a way to win competition.
The paper has three integral parts: theory, methodology and research oriented sections. 
Theoretical background from scientific books and articles review on export strategy, international 
management, is used to lay the analytical foundation of the paper. The following aspects is 
discussed in theoretical part too: access to resources, feasibility to use capital for investment and 
growth, credit access to financial institutions, experience and knowledge of the export strategy and 
target market, brand image and brand awareness, communication skills. 
A qualitative method has been chosen to make a whole general understanding picture of the 
current strategies and changes, using in-depth interviews to gather deep and wide information from 
those managers involved in the process of export strategy. An in-depth interview is structured to 
acquire  general understanding of how export managers are managing the current difficult situation 
for their export strategies. The interview is first developed in English language then translated in 
Italian language for Italian managers and back all answers are translated in English, to assure the 
quality of the research. The analytical part will encompass deeper analysis of in-depth interview 
results.
This paper is expected to give a primary insight and become a starting point for further 
studies about latest global financial crisis relationship with exporting strategy changes in various 
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industries. The accumulated expertize of home appliances industry players will enable researchers 
to carry out further topic studies more thoroughly with regard to broader internalization strategy 
changes that are caused by turbulent global economy. 
Conclusively, the results of research might become a valuable source for corporate decisions 
related to company export strategies and export performance handling.
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1. LITERATURE REVIEW
1.1. Theoretical background for internationalization
1.1.1. Globalization, international management
The concept of global trade is not a new concept today. What make important the global 
trade today, goods and services and financial instruments as well, probably relies on something 
different. Globalization as complex term can be seen under different views. It is possible to divide 
globalization for politicians, for economists, industrialists, marketing managers and sociologists. 
Globalization for politicians is the term that refers to the issues between countries, trading without 
or with limited barriers and also the one which let powerful nations to impose political rules. 
For economists, global trade is not only a mere increase of trade in figures but also the full 
understanding of how "capitalism", so to say the leverage of financial investment served to increase 
the whole production. A new modern approach of capitalism is used as financing the financial 
system itself and not anymore the production activity.[13]
More in support for this research, is the studies of globalization for industrialists and for 
marketing managers, more precisely export managers. Within industries, firms among different 
countries become competitors. Boundaries are not anymore an obstacle so competition become a 
wide concept for all firms of any industry. Common goals are set and are in need to be achieved. 
But, generic and specific risks arise when these industries become global. Operational risks, 
technological, infrastructure, security and integrity of data, reputation and legal risk must be 
considered.[9]
Common demands and similar needs in different countries led marketing managers to 
develop a "global product". But, looking carefully at all these products, so called global, we can 
discover soon that the list is very short. Why then so? 
For managers, the possibility to create a global product would be more acceptable, but in 
real needs, all countries have different adaptation. Coca-Cola Corporate, one of the best example of 
global product, have different taste with different names for their products in different nations. And, 
like this example, many others products follow this marketing strategy, which implies more 
adaptation.[13][15]
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1.1.2. Marketing process and growth
What is exactly a marketing process? What is its role within the firm? How to set and 
implement and effective strategic marketing process? Let's start to define what is marketing process, 
that is the process which includes the following issues for each firms, product or business unit :
 Moving in the right direction;
 Setting appropriate and accurate objectives;
 Trying to focus on right customers;
 Acquiring and developing right skills, resources and capital.[19]
The marketing strategy refers to the process and to the outcome. The process is the course of 
actions that identify, implement, develop and maintain the marketing strategy for the firm. We may 
also answer to some questions in a way to clarify better the process : who, when, where, what, how 
and why.[13]
"Who" will be the customers or segment, "when" customers are reached, "where" in 
geographic meaning, "what" needs have to be met, "how" those needs are met (resources) and 
"why" a firm can do it better than competitors. In answering all these questions the firm will make a 
whole picture and the status thus will let it to set proper goals.[19]
To be specific, to be unique, to be different are all characteristics a firm can use as 
competitive advantage. Michael Porter, summarized this requirement "Competitive strategy is about 
being different. It means deliberately choosing a different set of activities to deliver a unique mix of 
value".[11]
Another important aspect for a company shall be the question of growth, the growth 
strategies. "... not all companies are always growing their sales and some may choose, at least for 
the short term, to forego growth ... maintenance and retrenchment strategies. The question then is 
how a company or a strategic business unit can achieve that vital growth?" [19,p.178]
This process is likely to be the sales expansion, increasing volume of sales. If we look more 
in details, Professor Igor Ansoff, found four main strategies to better explain these stages as 
described in figure 1
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