Italy - Berluscon's Challenge

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Case Details:

Case Code : ECOA124
Case Length : 14 Pages
Period : 2003
Organization : -
Pub Date : 2003
Teaching Note :Not Available
Countries : Italy
Industry : -

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Despite massive destruction of its infrastructure, Italy rebounded from World War II quickly. The 1950s saw an industrial boom that brought prosperity to the northern and central regions and shifted the focus from agriculture to manufacturing. Family-owned businesses became the mainstay of the economy. They focused on industries like textiles, machinery and food processing and started exporting goods around the world.

In an attempt to bridge the economic gap between the North and the South, the State pumped funds to improve the South's infrastructure, and accelerate its economic and agricultural development...

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Economic Policies

In the 1990s, Italy had embarked on a journey of wide ranging economic reforms. It had focused on cutting taxes, tackling unemployment, enhancing competitiveness and reducing the budget deficit. But Italy's large bureaucratic government sometimes made it difficult to implement market-oriented reforms. Economic and cultural differences between Italy's North and South regions also hindered the development of a market economy...


Like most other advanced OECD economies, Italy had a small primary sector. The country was strong in manufacturing, which accounted for about 25% of GDP and about 90% of total merchandise exports. Services contributed close to two-thirds of gross value added.

However, apart from tourism and design, Italy was not internationally competitive in most service industries and advanced technologies. In the 1990s, a number of business groups had emerged as forces to be reckoned with, in particular Benetton, Marzotto, Del Vecchio and Ferrero...

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