Italian Quality Essay

2931 Words Jan 30th, 2012 12 Pages
Italian Quality: Campagnolo Bicycle Components
Introduction
Campagnolo is renowned for producing some of the most innovative, highest quality, and best performing bicycle components available today. They also provide a benchmark for original design as evidenced by winning the prestigious Compasso d’Oro award from the Associazone Design Italiano and has been recognized by the Wall Street Journal as one of the most prominent sports brands in the world. ‘This reputation has been earned not only through its countless racing successes, but also by virtue of the attention given to quality and to service that sets this company apart from all others.’ ("Focus," 2011, para. 6)
Tullio Campagnolo, an amateur bicycle racer who was frustrated
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The main facility is located in Vicenza and employs about 700 workers. At this site, Campagnolo designs and perfects its products before sending the dies and processes to their factory in Piteti, Romania for manufacture for the global market.
Problem Statement
Today Campagnolo is facing challenges on multiple fronts. Its largest competitor is Japanese component maker Shimano. Currently, Shimano dominates the OEM (original equipment manufacturer) market and its parts are on over two-thirds of bicycles today. In 2010, Shimano’s bicycle division sales were about $2.1 billion compared to around $150 million for Campagnolo. Regardless of the disparity in size, Shimano and Campagnolo each consider the other its greatest foe. Two small component makers, SRAM and FSA are also focusing on the highest level of bicycle components; SRAM and FSA both began producing road bike components in the last six years and have quickly risen to a position where they challenge Campagnolo and Shimano in this rarefied market. Additionally, about 95% of the bicycles and components sold worldwide originate in Taiwan or China where labor rates for metal workers can be as little as 9% of what a comparable Italian artisan would earn. However, Campagnolo has chosen to stick to its old-world roots, employing high-cost labor and pursuing its development and manufacturing activities in an almost medieval/renaissance guild environment while

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