From Merchant To Multinational: Enrico Dell'Acqua

Essay text:

high transportation costs; b. low consumption; c. low purchasing level; d. low quality of products in Italy. 5) High end cotton producers were U.K. and Switzerland First transformation from a merchant commercializing products to a vertically integrated production system: 1) Higher control level (cost and quality) 2) Economies of scale: no more fragmentation of smaller firms 3) Technology => mechanization (spinning and waving) Second breakthrough: 1) Expansion in Southern Italy (the only possibility because in the Northern Europe they were already buying products from U.K.) 2) Not many competitors in the South (Swiss producers had to face very high tariffs) 3) Over capacity => need to expand and to create a bigger market 4) The delivery process had to pass first through wholesalers, then through retailers (if one side this could grant local knowledge of the market and lower the overall risk, since they sold what suppliers gave them, on the other side wholesalers had not a very direct contact with the market, used to apply discounts and had more power than the producers because of their bargaining power, since products were not branded) How to overcome this problem? Through: 1) Salesmen 2) Questionnaires But this was not successful since in the South, people used to buy only the very necessary things they needed for self-consumption...