Case Study 7 - Italy's Small Businesses

Question 1

Sizes and Types of Firms (3.1.1)

How does Aceitficio Andrea Milano exemplify a small family-owned business in Italy?

Answer 1

• Characteristics: Flexibility, quick decision-making, and innovation (Page 1: “nimble decision-making,” “proactive family”)
• Case study evidence: Grew from €5.4mn (2013) to €21.6mn (2023) by exporting apple cider vinegar (Page 2).
• Role in economy: Represents Italy’s SME-dominated private sector, contributing to exports despite limited resources.

Question 2

Business Growth (3.1.2)

How did Aceitficio Andrea Milano achieve organic growth?

Answer 2

• Innovation: Launched apple cider vinegar for global markets, increasing exports to 70% of revenue (Page 2: “35% of revenues from new product”).
• No mergers/acquisitions: Expanded using internal resources, retaining family control (Page 1: “still wholly owned and run by descendants”).
• Result: Revenue quadrupled (€5.4mn to €21.6mn) with a €50mn target (Page 2)..

Question 3

Business Objectives (3.2.1)

What business objectives drive Aceitficio’s strategy?

Answer 3

• Growth: Aiming for €50mn revenue by 2027 (Page 2).
• Innovation: Developing new products (e.g., apple cider vinegar) to meet global demand (Page 2).
• Market expansion: 70% of revenue from exports (Page 2).
• Balancing control: Considering external investors to scale while maintaining family influence (Page 2)

Question 4

Sizes and Types of Firms (3.1.1)

Why are small businesses both a strength and weakness in Italy’s economy?

Answer 4

• Strength: Flexibility and innovation (Page 1: “entrepreneurial spirit,” adapting to market trends).
• Weakness: Fragmentation limits investment in modernization, contributing to low productivity (Page 2: “unable to invest in digitalisation”).
• Case study link: Aceitficio thrives, but Italy’s average business has only 40 employees (Page 1).

Question 5

Business Growth (3.1.2)

What challenges arise from Aceitficio’s transition to inorganic growth?

Answer 5

Loss of control: External investors may dilute family ownership (Page 2: “considering outside investors”).
Organizational strain: Rapid growth (50% annually) requires restructuring (Page 2: “strengthen internal structures”).
Case study link: Trade-off between scaling and retaining agility (Page 2)

Question 6

Business Objectives (3.2.1)

How do family firms balance growth with control?

Answer 6

• Organic growth: Retain control via innovation and exports (Page 2: “family can decide easily”).
• Strategic partnerships: Exploring external funding cautiously to meet €50mn target (Page 2).
• Case study link: Aceitficio’s success relies on family-led agility but acknowledges limits of organic growth (Page 2).