Italian Food Expansion
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Market Sizing Business Operations Strategy
quantitative
qualitative
Prompt - Part 2
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The client likes your recommendation and decides to produce a new product: olive oil. What are the things the company should consider before kick-off?
Suggested Approach - Part 1 Some considerations include: Market size Additional profit from the new product, i.e. revenues and costs Getting on the shelves of existing distributors High quality or low cost approach? What is the differentiator? Distribution, i.e. widespread or exclusive
Marketing, i.e. 4 Ps in collaboration with distributors Logistics Supply Production and capacity
Prompt - Part 3 Determine the market size. How much olive oil would you estimate is consumed in Italy? What’s the value of this market?
Suggested Approach - Part 3 Population: ~60 million Average household: 3 people Number of households ~20 million
Average consumption of olive oil per month per household: 1 bottle Size of one bottle: 750 ml Annual consumption: 20M x 0.75l x 12 = 180 million liters
Average price per bottle: €7.50 Calculation for value: 20M x €7.50 x 12 = €1.8bn
ESADE MBA Consulting Club | casebook
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