Italian Ceramic Machinery Industry at a Crossroads: Competitive Strategies in Response to the Rise of Chinese Manufacturers

The Italian ceramic machinery sector is constantly transforming. However, in recent years the sector has been facing a serious structural shift caused primarily by the intense rise of Chinese competitors. With increasingly better technological capabilities and an aggressive cost-leadership strategy, Chinese manufacturers are altering the industry dynamics and are threatening the competitive positions of Italian players which have historically dominated the sector. This thesis project is the result of my four-month long internship experience at SITI B&T Group, one of Italy's leading manufacturers of complete ceramic production plants, headquartered in Formigine in the heart of the Sassuolo industrial district. The main purpose of this work is to investigate whether the competitive advantages that have traditionally sustained the global leadership of Italian ceramic machinery producers still remain defensible today, in a market where price pressure is intensifying and the quality gap with Chinese competitors is getting smaller. To address this goal, the research adopted a qualitative methodological approach which combines secondary industry data with a set of qualitative semi-structured interviews conducted with key figures in the sector both internal and external to SITI B&T Group. The work is organized into four main chapters: the first provides the theoretical framework on competitive strategy, industry analysis, servitization and low-end disruption; the second examines the ceramic machinery industry and the connected Sassuolo industrial district; the third analyzes the rise of Chinese competition in the broader manufacturing sector and the macroeconomic implications that this has for Europe. Lastly, the fourth chapter presents the SITI B&T case study, supported by the findings and primary data obtained through the semi-structured qualitative interviews.