To plan for international markets, institutions, companies and investors are required to work on clear and long term strategies

"Michele Ferrero, one of the best Italian industrialists, in 1985 complained that his company was still selling more than 90% on the domestic market, which for him was Europe", tell us Marco Costaguta Director of Bain & Company "he was already thinking his products for a world market".
During his participation to the General Meeting, Costaguta explained how to think international.

What are the bases to compete in such fast changing markets?
When in Italy we start a business, we think of the Italian market on a short term perspective.
Now this can no longer happen, the market we must compete on is much broader and we need to look at least at a 50 year lifespan.

Do we have the means to bear comparison?
To answer this question it is necessary to analyse the current situation of our country.
In the past 10/15 years, our country has lost competitivity, but not homogeneously. In some sectors things are going very well and there are some external situations which apparently look dangerous, but are real opportunities. In other cases, however, we are loosing competitivity in Europe, especially towards Germany. At least 3.5% of the goods in the world market are Italian, but 15 years ago they were 4.5%. We sell roughly a quarter of our products abroad, but Germany exports 45% and this percentage is growing in the last years.
The market share of the Italian product varies from nearly 11% in Switzerland and 0.9% in China and there are sectors, like footwear, in which we hold an important share in the world market.
The textile and clothing sector seems to be in difficulty, but this is only partly true. Italy is maintaining a stable share, about 8-9%, it is China who has flown up to 20-25%. China, there is talk of nothing else. But there are only risks or also opportunities? This big country represents 25% of the population and is the second world market; in the first nine months of 2006 it has grown by 10%, with Shanghai or Beijing looking always more like New York. Those who entered the Chinese market have been successful. Whereas it is back home that we are running many risks. We are loosing points in strong sectors such as furniture, especially compared to Germany.
In the furniture sector, in the last 5 years, Italy has lost 3 points and Germany has gained 2.5.

Are we missing something?
If we look at the tendency to export, we will notice that there are some regions, such as Lombardia and Veneto, who export up to 36-37% of their product. The Province of Milan r
epresents 15% of Italian export and the first ten provinces export 50% of the total. Therefore, to say that Italy's export is in crisis is to generalise and we must examine this concept carefully.

Can we make it?
We have sound basis to make it: culture, competence and capacity, Italians travel more and the ability to work in a foreign language is growing, furthermore if we look at the past there have been worse times. In the 70's and 80's the importexport balance was far worse.
Another point at the centre of our discussion is the size of our companies. There are only 10 Italian companies quoted on the Wall Street, less than half of France and Germany. But it is not only the large companies who export, there is a good drive towards export also in the smaller companies. Italian packaging machines, for example, hold 20% of the world market having increased their exportations in the last years.
To be winners it is important that everyone does his job efficiently: management, companies, institutions and investors. Managers must have the courage to analyse the problems in order to understand what choices to make and to concentrate on few important initiatives using different models according to the opportunities. Companies must evaluate whether they can become international both from a structural and from an economic point of view: probably the break-even point will be obtained in 5-7 years and not in one or two.
Pointing abroad must not be seen as running away from the corebusiness, companies must offer what they can do best, with valuable offers, respecting rules and habits of the market they want to enter. This point is not as prosaic as it may seem. A large clothing chain presented in Germany the same products used for the Italian market, without thinking that Germans use mostly short socks and Italians don't.

What do we want from the institutions?
Some time ago I met Singapore's Prime Minister who, until then, had only talked about the United States and Asia. When asked by a German delegate what he thought about Europe the answer was: I do not understand Europe, you keep investing where you are not competitive and don't invest where you are. This is what we want from the institutions that they invest public money in the strong points without wasting them on feeble initiatives. Of the investors and entrepreneurs we ask to make less speculative and more courageous long-term choices. We must be able, in a long term perspective, to revive business and above all the ability to produce and invent.
We cannot think of a future in which Italy and Europe produce only services. The time-span for a truly strategic vision is 50 years, like that of some industrial families when they thought of the future generations.