I N T E R N AT I O N A L M A N A G E M E N T

Mele Federico Manganiello Matteo

Luca Mariavittoria

Milluzzo Alberto Tositti Giulia

Marangon Caterina

Ca’ Foscari University of Venice

M U R A N O G L A S S I N D U S T R YA N A LY S I S O F A V E N I C E M A N U FA C T U R I N G D I S T R I C T

A L O N G T R A D I T I O N O F PA S S I O N

Murano glass is made up of 70% silica sand and 30% of other substances called “fluxes” and "stabilizers" (soda and lime). These added “fluxes” allow glass to be melted at a lower temperature., The "stabilizers" prevent glass solubility in water.

The crucible containing the glass paste is removed from the furnace.

The master picks up, with the end of the blowpipe, the amount of glass paste called "bolus". Then, with a series of fast operations, blowing into the tube whilst simultaneously rotating it, the master, with the aid of forceps and scissors, shapes the object he wants to obtain. When, during processing the glass paste cools and solidifies, the object still unfinished is heated in the furnace, as it can still be molded easily. No object is identical to another.

T H E P R O C E S S

A B R I E F H I S T O R Y O F M U R A N O G L A S S

• 1224: glass-makers already a trade association

• 1291: Murano the only location of the furnaces

• ‘400: “The Golden Age” of Murano Glass Industry. New techniques of manufacturing.

• ‘800: Huge moment of crisis.

• Post II WW: raising of the most important firms.

• 80-90's: huge growth, sales based on tourism

• There were 256 firms, 2000 employees, more than 150 billions revenues, export was only 35%

“ T H E E L D E S T D I S T R I C T O F T H E W O R L D ” - G . S E G U S O

In 1224 glassmakers were already a trade association and in 1291 Murano became the furnaces location. While in other countries furnaces had been built in those areas where supplies of raw materials and fuel could be found, Venice and Murano have always had to import them.

In 1400, during the Renaissance, glass works became a much sought-after product by the upper classes of Europe. It was the Golden Age, with new manufacturing techniques.

During the Baroque period, extravagance dominated production, thus determining the search for new effects.

In the XIX century Murano had a huge moment of crisis. This was due to multiple reasons such as Napoleonic domination and the emigration of the glassmakers.

After the second world war, there was a rebirth of the sector and the rise of the most important firms.

S O M E H I S T O R I C A L C U R I O S I T Y:

In the districts there are signs of a return from the tensions in the management of working capital erupted in the early years of the crisis of 2009. There is a more favorable environment for supply chain relationships. Among the micro-enterprise district companies, the differential has reached a point of maximum of 6 days in 2009 and then decreased up to 1.8 in 2013. In contrast, in non-district areas the emergency phase is not over.

As we can see from this graphic there was an increase in the capitalization of the district companies. In view of that there was a decrease of debts. Leverage in the district areas is -0.2% compared to 2008. In the districts it is -1.7%.

A C C O R D I N G T O I N T E S A S A N PA O L O 2 0 1 3 R E S E A R C H

I TA L I A N D I S T R I C T S D ATA

Foreign multinationals have always had a strong interest in areas highly technology-intensive. Specialized production in sectors with high technological content allowed technology centers to maintain better growth profiles than other with more traditional activities. Only the ICT industry has been affected by difficulties in the domestic market. Instead, aircraft and pharmaceuticals sectors have had a more sustained trend.

Among micro-enterprises there is a high positive EBITDA and financial imbalances. In this context, smaller companies suffer. Despite a significant improvement in working capital management, they continue to be under - capitalized and highly exposed to short-term bank debt. They have many difficulties in maintaining balance in their financial management and liquidity even when they have a positive industrial management.

I TA L I A N D I S T R I C T S D ATAA C C O R D I N G T O I N T E S A S A N PA O L O 2 0 1 3 R E S E A R C H

M U R A N O D I S T R I C TF O C U S I N G O N

S O M E N U M B E R S …

• N° of firms in 2012: 502 (381 within 49 employees). • Var % firms between 2011 and 2012: -6,52% • Export 2012: 105 Mln Euro • Var % of Export between 2011 and 2012: +3,96% • Export 2013: 100 Mln Euro • Var % of Export between 2012 and 2013: - 4,1% • Legal battle for past national funding that UE is

considering as "State aid"

The Scenario is Changing

• As we can see from the previous slide, the numbers indicate that the district is in constant decline. The crisis has hit the numbers of firms and the exports. Although from 2011 to 2012 the exports have increased of 3,96%, from 2012 to 2013 it has recorded a -4,1%.

• According to “IlSole24Ore”, during the last half century the number of workers within the district has worryingly fallen down, and, with it, also a lot of firms went bankrupt. From 1990 to 2001 the decrease has been of about 6000 workers. Today they are less than a thousand. This has led to broad consequences, such as a decrease of district’s political power compared to bigger districts, resulting in a weak law protection and regulation. One of the main reasons behind this phenomenon is the huge “lagoon expenses” issue, due to difficulty in raw materials transport, costs of furnaces maintenance, and heavy environmental law constraints.

S O M E N U M B E R S …

S W O T A N A LY S I S O F T H E D I S T R I C T

Strong Long-Lasting Tradition Huge Manufacturing Ability

Niche Market (Luxury Products) High Quality Products

Lack Of Cooperation Strong Internal Concurrency

High Costs Of Production Closed Minded

Innovation (3D Printing) Customization Of Products

From B2C To B2B (On Contract) Creation Of A Sharing Mentality

Counterfeiting From China Dislocament On The Mainland

Focus Only On Tourism Lack Of Protection

O P P O R T U N I T I E S T H R E A T S

W E A K N E S S E SS T R E N G H T S

SWOT ANALYSIS OF THE DISTRICT

• Focusing on Murano district, its SWOT analysis can give us a broad view about the actual situation. As strengths we can see the strong lag-lasting tradition, a huge manufacturing ability, the nature of a niche market (that means the commercialization of luxury products) and the high quality of products. On the other hand, among the weaknesses, we have the lack of cooperation, a strong internal competition, the high costs of production and maybe the most crucial: a closed mind.

• To relaunch its success, the district could restart from opportunities such as innovation like 3D printing, allowing a deep customization of products, a B2B trading and, moreover, a creation of a sharing mentality. In its path, however, it has to deal with some threats, from a fierce unfair competition from china to a lack of protection mechanisms.

MANAGEMENT VS TRADITION• One of the main characteristics of the district is the issue of “Management Vs

Tradition”. In fact globalization has increased the level of foreign competition. North Europe countries, Slovenia and Czech Republic have the knowledge and the ability to compete in this market and to make products at a high quality level, through innovation and cutting-edge technology.

• The majority of firms within Murano district hasn’t a strong presence on the web and most of them hasn’t it at all. This absence of digitalization, nowadays, is a heavy problem because it reduces the opportunities to compete and to extend the market. This is due mainly to a low level of organizational strategy and business structure that doesn’t have the necessary competencies to grow up and build a strong position at international level.

• The tradition of the district plays a crucial role in two ways: first, when it increases the value added to the Murano products versus the products of incumbents (that of course aren’t able to communicate their story), and second, when it hampers the moving of the production phase from Murano to the mainland, due to the threat t loose the Murano’s millenary identity.

A B O U T W O R K E R S

T R Y I N G T O S O LV E T H E P R O B L E M

In order to face and relieve the weaknesses and threats of the district, in particular the lack of cooperation and protection from counterfeiting, it has been created a consortium.

Founded in Murano, in 1985 by a group of craftsmen producing artistic glasswork, Consorzio Promovetro has worked to conserve, safeguard and defend Murano’s one thousand years old art, and at the same time to promote, develop and assist this important cultural heritage in the world.

Over the years it has become an important associative body, with two major representative groups in the field of glass, the “Confartigianato Venezia” (craftsmen professional association) and the “Confindustria Venezia” (industrial professional association).

It currently represents roughly 50 artisans and industrial enterprises on the island of Murano.

P R O M O V E T R O

In 2001 the Region of Veneto entrusted to Promovetro the promotion of the trademark “Vetro Artistico® Murano” (designed by Diego Lazzarini), introduced and governed by Veneto Region Law no. 70 of the 23rd December 1994. It is the only legally recognized state that the glass items have been made on Murano island, using only the traditional artistic methods born and developed on the island of Murano.

The Murano glass companies that are “concessionaires” apply a special stick-on label to their products to guarantee without any doubt the origin of their manufacture. Promovetro may rightfully be considered one of the principal guardians of original artistic Murano glass production. It represents an important promotional vehicle and a precious point of reference and commercial support for the businesses in this field. It also stipulates agreements with important service suppliers.

H O W D O E S I T W O R K ?

EUROPEAN GLASS EXPERIENCE

European Glass Experience is an international celebration of contemporary glass art and its makers. Coordinated by the City of Venice in collaboration with Consorzio Promovetro Murano and the Murano Glass Museum, EGE was launched as a competition in 2013 under a prestigious two-year grant from the Culture Program of the European Union. The project was created in partnership with premiere museums, glass study and production centers in Finland, Poland, Spain, Sweden, and the United Kingdom.

European Glass Experience aims to link practices in this medium to contemporary art and to foster the role of handmade glass as an intangible cultural heritage to be safeguarded and promoted. The objective is to support glass art both as European common heritage and as a platform for innovation by visual artists and designers.

IGP ON THE MURANO GLASS: THE PROPOSAL OF THE CONSORZIO

According to Promovetro estimates there would be about 70% of non-original products in circulation. There is a consistent uncertainty of customers in recognizing the quality of the Venetian island. If you do not promulgate rules that define clearly what is Murano glass, no one will trust and purchase more.The IGP protection provides enforcement action for those that don’t respect the rules and verifies the authenticity of the products in shops through a "task force”.

P R O J E C T S A N D A C T I O N S

I S PROMOVETRO A USEFUL REAL ITY?

Statistics demonstrate the positive impact of being part of the Consortium.

The side bar chart on the left shows that the average turnover of the firms belonging to Promovetro was higher (594.853€ ) than the average turnover of the non Consortium members (347.159€ ) in 2013. Concerning the origin of the turnover, the column chart on the right highlights that 40,7% of the Promovetro members’ turnover come from abroad, while the non members mature abroad solely 29,5% of their turnover.

PROBLEMS

There are two main issues related to Promovetro: first, only few companies of the Murano glass district have decided to be part of the Consortium, due to jealousy in maintaining their separate identity, they do not want to stay on the same level with each other; second, Promovetro does not insist to obtain the consent and collaboration from all. In addition, there is a lack of web communication in explaining the value behind the original glass products.

I S PROMOVETRO A USEFUL REAL ITY?

“ A B AT E Z A N E T T I ” F O U N D AT I O N

A T R A I N I N G R E S E A R C H C E N T E R B O R N F R O M M U R A N O ’ S T R A D I T I O N B U T O P E N T O T H E W O R L D .

S C U O L A D E L V E T R O

FURNACE STAINED GLASSFUSING

LAMP WORKINGFREE COURSES PRIVATE LESSONS

K E Y O N D I F F E R E N T I AT I O N

Heir to an ancient institution glassmaking, Abate Zanetti is the meeting point between the past and the future of glass art.

Two are the souls of Abate Zanetti. The first is training, inspired by his roots and it is expressed through the implementation, coordination and promotion of learning activities that are highly innovative. These are courses on the techniques and methods of processing traditional art and contemporary glass, as well as on general issues related to technology, design, marketing. The second soul, in a logic of continuity with the first, is the production, a natural progression to open new opportunities in a market environment that requires new solutions.

Abate Zanetti is now, in fact, also the center of excellence in production, research and experimentation on the issues of the artistic and design of glass and is able to produce works of art in glass starting also from the customer project (with subsequent processing the design and prototype) or by following the instructions of the designer.

Abate Zanetti Foundation represents an important reality in the glass industry. Thanks to its different activities it supports the diffusion of glass culture and manufacture, and it might be the right place where future glass makers can be trained.

A B AT E Z A N E T T I

TA G L I A P I E T R A

C H A N G I N G T H E A P P R O A C H

S E G U S O

S A LV I AT I

L I N O TA G L I A P I E T R AA N I N T E R N A T I O N A L E X P E R I E N C E

E X P O S E D A T: S M I T H S O N I A N , C H R Y S L E R M U S E U M O F A R T, PA L M S P R I N G S A R T

Lino Tagliapietra was born in Murano in 1934 and become the most ambitious and influential glass maker of his generation, in fact at only 21 years old he received the title of “Maestro”. At aged 12 he become the apprentice of the famous Archimede Seguso, who taught him the techniques and secrets of Venetian Glass. Through his 60 year career, Lino has been a maker, a teacher, and a celebrated artist. He blew glass for the leading Venetian factories such as Venini, before accepting Dale Chihuly’s invitation to teach young American glass artists at the Pilchuck Glass School in Seattle in 1976, and later becoming the exceptional artist we know today.

Lino has become a free practicing artist of glass without any obligations and he is now fully dedicated to creating his unique pieces that are present in some of the most prestigious museums in the world.

What characterized his innovative approach is the fact that he shared the Traditional Venetian techniques with American glassblowers for years, in fact in 1996 he opened a “School of the Glass” in Seattle to promote his knowledge through courses and lessons. He become an important artist in the USA, in fact he was able to impose his creations on the international art market. He sustains that to grow a new generation of glass makers are necessary opened atelier capable of testing and where the training is stimulant. His dream is a big contemporary museum about the glass activity that transmit passion and the history of the prestigious Venetian culture

L I N O TA G L I A P I E T R A

A N A R T I S A N A G A I N S T T H E T I D E …

•from Murano to Washington

•Renaissance in the Glass Art

•Open minded with the international word

•travels to the USA to promote his

knowledge through courses and lessons

•founded a Museum-Laboratory in Murano

•a recognizable style and superior

technique all over the world

•to grow a new generation of glassmakers:

open challenging atelier capable to give

experience and stimulus

•desire to have a big contemporary

museum

T H E PA S S I O N O F A FA M I LY

S E G U S O

S E G U S O

M U R A N O G L A S S S E G U S O F R O M 1 9 3 7

Seguso is a company founded in 1397 in Murano by the old components of the family. Now It is composed mainly by 3 brands (Seguso Viro, Seguso Interiors and Seguso Vetri d’Arte.) and it is also the owner of “Cenedese Murano” and “Gino Cenedese”. In 2013 the company counted 29 employees, far above the average of the entire district, with a performance for employee of 72,44. A very important passage on the history of the company is the creation of the “Seguso Experience” in 2012.

B E Y O N D M U R A N O

P R O J E C T F O R “ F O U R S E A S O N S R E S O R T ” I N D U B A I

Seguso has a strong international presence, we can find it’s products in America (where they have also a branch in NY: Seguso USA), Asia and in the Emirates. It is a very interesting case study because it is one of the first firms of Murano glass industry to operate not only in a Business To Consumer perspective but also on a Business To Business market. Inside the company there is a special division called “Special Project Seguso”, administered by Pierpaolo Seguso (one of the brothers), that is dedicated to spacial customized product for local and foreign committees. The path of customization of the product is developed through study of the project, the realization of the samples, a photographic documentation during processing the project, and the production of a rendering that simulates in an appropriate manner the environment in which the products will adorn. These procedure is quite important because the customer can have a real vision for his/her personal project.

F I N A N C I A L T R E N D S

C C N

-500000

-375000

-250000

-125000

0

2011 2012 2013

P R O F I T S & L O S S E S

-400000

-300000

-200000

-100000

0

100000

200000

300000

2011 2012 2013

R O E

-80

-40

0

40

80

2011 2012 2013

R O S

-12

-6

0

6

12

2011 2012 2013

• L O S S E S : - 3 8 1 1 0 8 • R O E : - 7 0 , 6 8 • R O S : - 1 1 , 0 2 • C C N : - 2 5 3 8 3 6

Talking about the financial situation we can see from these few charts that, in spite of a very good organizational

situation, the company is constantly losing profits: in 2011 the profit was positive, at 256.540 euro, while in 2013

the profit was negative, at -381.108 euro.

1. If we look at the the ROE (Returns on Equity) index, we can see that the company is gradually eroding its own

financial resources and showing that the management is not able to organize the resources of the company in a

way that can growth the profits.

2. Another interesting index to look at is the ROS (Return On Sales). Also this index, obviously , shows a negative

trend between 2011 and 2013 meaning that the company is not able to gain profitability from its sales and, so,

that the company isn’t in a good operative and commercial health.

3. The last financial measure that we analyze is the CCN (Capitale Circolante Netto) or “Working Capital”. This

measure, on the contrary, even though negative, is decreasing its negativity. This situation can be viewed as a

“positive” factor: the company is trying to reduce the possibility of financial problems covering the obligations

taken on the short term with a little more realization of assets in the short term. To summarize, It is trying to

finance itself on the short term.

Analyzing deeper the situation, we can see that during the years the company and its financial performance are

going down. This can be viewed on a double perspective: on one hand a person can think that the company is in

clear financial difficulty; on the other hand, however, looking at the balance sheet, especially taking into

consideration the trends of the fixed assets and of the cost of personnel, we can suppose that the company is investing a huge part of its financial resources for a future organizational growth. In fact, the acquisitions of

“Cenedese Murano” and “Gino Cenedese” make us to be inclined to this hypothesis.

F I N A N C I A L A N A LY S I S

S E G U S O E X P E R I E N C EW H Y T H I S I N I T I A T I V E ?

A very important innovation made by the Seguso’s brothers is the creation, in 2012, of the Seguso Experience. The fundamental aim of this special initiative is to tell the story of the Italian “saper fare” and to shift from the “culture of secret” to a more open minded “culture of the story-telling”. It is based on the assumption that quality means instilling in the customer the willing to become an ambassador of the product. It consists both on a chance for the entrepreneur to understand its mistakes and discover new market opportunities and, at the same time, it represents the possibility for a creation of a cultural and social relationship between the customer and the product (the firm) through the visual and emotional experience. It is the occasion to show to the customers that the famous moto “bello and ben fatto” is linked to a subjective idea of craft work. A work that it is not comparable with the standardized products of every day life (such as Ikea products ), driven by the mass approach and by a pure economical perspective. This special product, instead, bring with itself the style, the passion, the history and the skills of every glass master. It is full of intrinsic value!

S A LV I AT IA N E W W AY O F T H I N K I N G T H E G L A S S

In mid-19th century Antonio Salviati, a lawyer in love with the mythical lagoon city, decided to revitalize the Venetian glass industry and in the 1859 he founded this firm.

Salviati counts 11 employees and has recently faced a crisis from 2007 to 2012 due to huge debts, but the strength of this organization was to remain loyal to his past, keeping alive the innovative approach thanks to collaborations with international designers, as it was used to do since the 50's, when, Luciano Gaspari drawn the path the firm is still following.

In 2011 Salviati was acquired by Umana Forma srl and today the heritage of Antonio Salviati still remains one of the most representative company for glassmaking in the world, the quality and the beauty of their products supported by a solid know-how and by fruitful and continuous collaborations with many inspiring designers.

S O M E I N F O R M AT I O N S

F I N A N C I A L S I T U AT I O N I N 2 0 1 4• L O S S E S : - 7 7 1 1

R O E

-80-60-40-20

020

2012 2013 2014

C C N

-300000

-150000

0

150000

2012 2013 2014

R O I

-3

-2,25

-1,5

-0,75

0

0,75

1,5

2012 2013 2014

P R O F I T S & L O S S E S

-12000

-9000-6000-3000

03000

2012 2013 2014

• R O E : - 7 9 , 2 3 • R O I : - 1 , 6 7 • C C N : 3 4 5 6 1

F I N A N C I A L A N A LY S I SBefore starting to analyze the financial situation, is important to underline how big is the effort of Salviati in trying to emerge from the Murano economy, and establish itself as an outstanding firm in the global glass scenario, leading the market from Murano.

So, from these chart, we see how, after being acquired by Umana Forma in 2011, the management is working to renovate the firm from the base, diminishing financial capital assets and costs of production from 2012 to 2013. This move, which goes together with the international promotion of the brand, led to a positive situation in 2013, as proved by ROE (Return of Equity), which moved from -66,82 to 14,09, and by the good operational management.

About this last topic, is useful to note two indicators of performance: ROI (Return of Investments) and CCN (Capitale Circolante Netto or Working Capital). ROI increased from -2,16 up to 0,95, showing how the health process done by management was effective. Also CCN in 2013 was positive and reach 86692€ after being down to -260291€ in 2012.

In 2014 financial data was negative but it's possible to suggest a reason. Due to the increase of financial capitals and of short term debts, is understandable that ROE, ROI and even the economic result become negative (losses: -7711€), but the financial balance, as shown by CCN, is still positive, which means that the future perspectives for this firm are going to be brighter, thanks to a desirable organizational growth, also in foreign markets.

W H E N T H E T R A D I T I O N O F G L A S S M E E T S T H E I N N O VAT I O N O F 3 D P R I N T I N G

S A LV I AT I F O R . E X N O V OThe first example of how new technologies could allow production flexibility and customization of products is the collaboration between Salviati and the 3D printing firm .Exnovo, giving life to incredible products which can't be replicated.

Designed by Lanzavecchia and Wai, RHIZARIA is a lamp made of blowed glass and printed white plastic, and represent the unimaginable merge of glassblowers and polymer.

This lamp prove how Salviati is trying to open new scenarios, starting an internationalization process of The New Italian Design, and combining digital productions with traditional craft.

B R E A K I N G T H E M O U L D

W H E N T H E T R A D I T I O N O F G L A S S M E E T S

T H E I N N O VAT I O N O F 3 D P R I N T I N G

Breaking the Mould is a project born in 2011 ideated by Dario Stellon, and aim to rebuild the relationship between design and blowed glass. The approach of this project is completely innovative, because of the experimental and research mentality that is required. Different groups of work, with the same Murano's background, try to find new ways to keep production sustainable, while merging innovation with tradition. In particular, Venice >> Future, is a particular production within the Breaking the Mould project, which combine Salviati's glass and 3D printed ceramic of “ReggianiCeramica” and show how digital and artisanal competencies can be merged in an unique piece of Art, as the 3D printing technology meet the blowed glass made in Murano.

O U R F I N A L C O N S I D E R AT I O N STo grow and internationalize the Murano glass firms, a huge change is needed and could divided in 4 path, which can be complicated, especially because cultural factors are involved, but are still possible and desirable.

• First, being open minded is necessary, because is the game changer step which could led to a sharing culture, that should help to spread the Venetian manufacturing knowledge, teaching the importance of production in Murano alongside with unique competencies worldwide recognize (following Tagliapietra's path)

• Then, the importance of cultural and product value is a key factor that have to be transmitted to customers, as Seguso do, with every method available. Being known for values inside the products is fundamental to establish Murano's production as unique bridge between the history and the tradition of blowed glass and the product, which is the memory of that heritage.

• Third change we would like to suggest, is the innovative approach, which Salviati already proven as successful way to rethink the product, that should help firms to being perceived on the markets as original glassmakers, able to stay loyal to traditions and to combine also new technologies.

• Finally, we would like to conclude our analysis suggesting more attention on the marketing side. Communicate every aspect of the production and the firm is an important factor that can be a better promotion than the product's one. Video, photos, blog, up to date websites and social networks are powerful tools, that can reach an enormous number of potential customers, and at the same time could teach them how to perceive a blowed glass product made in Murano.

T H E P R E S E N TAT I O N I S O V E R

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