Parmalat Essay

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NCCU Department of Finance ETP Graduate Investment Fall 2013 ------------------------------------------------- Milking Money out of Parmalat Case Study 2013.01.08 Group Member 102357008 Millie 102357013 Tony 102357020 Angela 102357026 Su 102300620 Lisa 102300329 Hervé 1. How were the foundations of Parmalat laid? What were Mr. Tanzi’s major business intuitions? The Parmalat Group, created by Calisto Tanzi a self-made entrepreneur could be traced back to 1961. At that year, Tanzi, a young and ambitious businessman, inherited the family business from his father. The company had been founded by his grandfather, which mainly engaged in local trading of tomato sauce. Tanzi started the family business with revenues of about €100,000, but Unsatisfied with the prospects of it, Tanzi soon made up his three main goals: First of all, the company needed a more appealing brand. Secondly, the product line should be widened. Last but not least, to achieve a profitable scale developing new areas is necessary. Entering the milk business by founding Deitelat Latte, expanding company’s presence to nearby Italian regions were two main tools to achieve its intuitions. But the real turning point happened in 1968. During trip to Sweden, Tanzi found out that milk sold at supermarket waspackaged by plastic bricks rather than traditional glass bottles. The packaging innovation, together with the new UHT3 technology were then became the foundation of the empire. The success could be attributed to the guarantee for a longer conservation of milk, which is short shelf-life product, without refrigeration and also revolutionized the whole Italian milk business, which was very fragmented. To realize his goal of developing new areas, Tanzi then embarked on an aggressive growth and diversification strategy, entering into other related dairy businesses as well as the dessert

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