In order to be considered a shareholder (an owner) it's necessary to possess at least a share of a company.Control refers to the controlling party of the company. So it depends from the ownership structure and therefore from the percentage of shares owned. It could be a de facto control (less then 50% of shares but enough to control) or a de jure control ( more than 50% of shares). Only the contolling party has the power to control and this power cannot be delegated to nobody. Anyway the controlling party can delegate the power to exert the control to the management (DIRECTION).
In terms of "Ownership" we can say by theory that every person/entity that owns a share it is also owner of the company; The "Control" is the power to govern financial and operating policies of the company with the goal to obtain benefits from the activities; it depends on the ownership structure of a firm; the control of the firm can be "DE JURE" when you have at least the 50% of shares and "DE FACTO" when you have at least the 20% of shares. The "Direction" is the practical exercise of the control power; the Direction is made by the management (chosen by the controlling party.
Providing the example of Fiat. Fiat is owned by its shareholders (all of them), controlled by Agnelli family (even if it seems a public company there are some Agnelli's family members within the Board of directors of Fiat) and mainly directed by its CEO who is Sergio Marchionne (appointed by FIAT's board of directors).
With "owners" we identify those subjects who own shares within a company, whether the company is widely held, a family company or a State-owned company. The "Control" is the power to govern and manage the firm itself. In public company this role belongs to the management, instead in family business this role is exercised by the Major owner. Finally, the controller can delegate its power to other subjects, in this case we have that the "direction" and "control" are exercised by different subjects .This aspect is particularly relevant in case of Business Group.
"Owners" are the subjects that have the shares of the company, "control" means governing the financial and operating policies of an entity in order to obtain benefits, "direction" is the exercise of the control power.
I agree with Valerio, - Ownerships are the subjects that have the shares of the company, - Control means governing the financial and operating policies of an entity in order to obtain benefits, - Direction is the exercise of the control power.
No it is not an azienda. Azienda is an italian concept, defined by three elements studied in "Economia aziendale": System, decision making power and economicity ( efficency and effectivness). Lottomatica is not an autonomous company because it is controlled by De Agostini. Therefore Lottomatica results as a sub-system and we cannot call it "azienda" but, on the contrary an "Economic entity".
I agree, if Lottomatica and its subsidiaries are considered as a single entity,the first condition necessary to be defined as "azienda" , the systematic view, is accomplished, because part and participants are supposed to work in integration in order to reach common objectives. However, if Lottomatica declares to be directed by DeAgostini SPA , it cannot be considered as an azienda because the decision making authority is no more availeable, the BOD is no more autonomous in ruling the organization.
Lottomatica is an economic entity, but it is not an azienda. Accorting to the italian definition to be considered "azienda" it needs to satisfy three essencial conditions. Firstly it should be a system of parts, partecipants and relations among them oriented toward a common goal. They operate in different sector without any form of connection among them, so they have different goals and cannot be considered as an unique system. Secondly an azienda has decision-making autonomy. Since Lottomatica is controlled by De Agostini, it cannot have the complete autonomy in decision making. Thirdly an azienda operate with economicity.
An economic entity could be considered as an azienda if it has 3 attributes (as most of you said) : being a systematic organization, having a decision-making autonomy and respecting the economicity concept that refers to efficiency of allocation of resources and and effectiveness in terms of output and goals. lottomatica group is not at all a system because it isn't related to the other company that is an insurance company ( no same sector) and it is a subsystem of a greater entity that could be defined as azienda, that's why depending on it it cannot be considered autonomous.
Lottomatica is not an Azienda but an economic entity due to the lack of the second requirement : "decision making autonomy" that is exerted by the holding " De Agostini Spa".
Lottomatica is not an azienda because it decleared that is directed by De Agostini. It means that it doesn't have one of the 3 attributes that an organization has to have in order to be considered as an azienda: the decision making autonomy. Posses the 2 other attributes alone, be a system and operates with economicity, is not enough to be considered as an azienda.
We can't define Lottomatica as an azienda as it is a subsidiary of De Agostini group, even though the two firms do not operate in the same field. Lottomatica owns only two of the three requisites necessary to be considered an azienda: economicity and being a system. But it lacks of the third one, being autonomous, since it is a subsidiary of DeAgostini.
If Lottomatica declares that it is dircted and coordinated by De Agostini, then I agree with you. Since there are plenty of subsidiaries that can exercise totally or partially a decision making autonomy, it can happen that a subholding (with its entire subgroup) will be considered as an "azienda":
In my view, Lottomatica is an economic entity but it is not an azienda. because to become an azienda group it has three 3 attributes (1. It has to be a system. 2. It should have a decision making autonomy. 3. It should operate with economicity)
Lottomatica Spa cannot be considered as an "Azienda" in the views of three attributes discussed in class. Although the company seeks to operate efficiently and effectively, it lacks indeed the capacity to be autonomously governed. It is in fact straightforward to see that Lottomatica spa is not able to exert decisions under under its fully control of the BoD.
We know that Lottomatica is a business entity but we can not say if Lottomatica is an azienda, because we don't know if it has decision-making autonomy and we are not able to say if it's a system. That's why we separate the concept of business entity from the azienda ones.
Lottomatica is not an azienda. It is controlled by De Agostino Spa so it has not an auonomus decision making power. The lack of this attribute ( that is crucial for defining an economic entity as an azienda) allow us to state that it is surely an economic entity but not an azienda.
I agree with you guys, Lottomatica cannot be defined as an Azienda, nevertheless it can be defined as an economic entity. The reason why it is not an Azienda is that, even though it respects the necessary conditions about the 'system' and 'economicity', it lacks the necessary requirement about having decision making autonomy since it is a subsidiary controlled by De Agostini Spa.
I agree with you all guys. For sure we know that Lottomatica has not the third feature that qualifies an azienda. But do you guys think the other two requirements are for sure met? Do we know, and how we do we know if the conditions of economicity and being a system are present in Lottomatica?
No. An economic entity to be considered as an azienda must meet three fundamental requirements: 1) the organization has to be a system, that refers to the integration between part and participants; 2) It must have decision-making authonomy and 3) It must operate with economicity, so in an effective and efficient way.
No it is not an "azienda" since it does not satisfy all the requirements, in particular the BoD of Lottomatica Spa cannot be considered autonomous since it is directed by de Agostini.
No because any firm to be considered an Azienda it must have 3 attributes to respect: it must be a system, must have a decision making autonomy and must operate with economicity. Lottomatica is a system because its business is not influenced by De Agostini and Toro Ass. SpA But it does not have a decision making autonomy because its decisions will be influenced by De Agostini directors.
In my opininon an azienda is something tha create economic value and through this it is able to substain itself. So i think that Lottomatica, altought it is a subsidiary, it should be considered as azienda
To be considered Azienda a firm, or a group, must have 3 attributes: it has to be a system, it must have autonomous decision-making and it must operate with economicity, that is effectiveness and efficiency. If we hypothesize that Lottomatica Spa is controlled and directed by De Agostini Spa, we cannot considere it as an Azienda.
I agree with you, indeed since Lottomatica is directed by De Agostini Spa, it cannot be considered an azienda because it lacks the necessary condition of decision-making autonomy.
We cannot consider Lottomatica as an "azienda" due to the lack of one of the three basic elements: a)Integration between part and participants. b)No decision-making authonomy (the problem in Lottomatica). c)Economicity
I agree with many of the comments above, with Arianna in particular. Lottomatica IS a system, it MAY operate with economicity, but it's definitively NOT autonomous.
We can't say that Lottomatica is an Azienda, as it doesn't satisfy all the three criteria of Azienda. In particular, it is interesting to highlight how Lottomatica lacks the required autonomy as it is controlled and directed by De Agostini spa. This means that it has not a full autonomy of the decision making.
Lottomatica is an economic entity but it is not an azienda. In fact, to become an azienda 3 attributes are needed: It has to be a system; It should have a decision making autonomy; It should operate with economicity. So, Lottomatica group is not at all a system because it isn't related to the other company that is an insurance company and it is a subsystem of a bigger entity that could be defined as azienda, that's why depending on it it cannot be considered autonomous.
For an azienda to be existent, the following attributes have to be fulfilled: 1. system 2. decision making autonomy 3. economicity (effectiveness & efficiency)
As Lottomatica is directed by DeAgostini SPA, it is controlled by it and does not possess decision making autonomy which results in the fact that is cannot be an azienda.
No it is not an azienda. Azienda is an italian concept, and, as we studied in Economia Aziendale has to have decision making power and economicity and this is not the case of Lottomatica since it is controlled by DeAgostini, so we can call it economic entity , not azienda.
Although Lottomatica group cannot be defined as Azienda, it is an economic entity. In fact, it is listed on the stock exchange, it has its own business activities and its own financial statement.
As Michele said, Lottomatica is not an azienda but it is absolutely an economic entity. In fact , as we discussed in class, the satisfaction of human needs constitutes economic activity. In addiction we have to remember that even if Lottomatica can be considerd an economic entity in isolation, the entire group has to be seen as a single economic entity as well.
I agree with my colleagues. However, I have some doubts on the market in which Lottomatica (actually GTECH) operates. Is it a competitive market or not?
Definition: The business entity is a productive organization (parts+participants) that carries out an economic activity (goods and services) in order to satisfy human needs (objective). Therefore Lottomatica is an economic entity. I think that there is no concern in considering whether the firm is listed or not.
Yes, because it works as a business entity, with the purpose of creating value. On the contrary in cannot be defined as an azienda because it lacks of autonomy.
Yes, I believe that it is an economic entity, since it aims to address human needs, but at the same time it lacks the requirements of an "azienda". Therefore we can say that an economic entity is not necessarily also an azienda, but can we also say that an azienda is necessarily an economic entity? I would say yes.
I agree with my colleagues Lottomatica is an economic entity: first because is listed and second because the main objective is to create value by satisfying human needs.
Yes, it is. This is because its main objective is to satisfy human needs by carring out an economic activity.Then , we can also add that it is an economic entity because it is composed by parts and participants.
I agree with those who said that Lottomatica is an economic entity. Indeed an economic entity is an organization (business entity or non-business entity) that carries out an economic activity in order to satisfy human needs, (hopefully also creating value).
Yes, we can consider Lottomatica as an economic entity because it tries to satisfy human needs with its services and try to achieve the goal of satisfying customer satisfaction
We have not all the numbers, but the De Agostini's "subsidiary" status makes it a non independent economic entity. We have no doubts about it when we consider that Lottomatica is listed, care its own operations and has to redact its own financial statement (wich will appear in the consolidated financial statement of the group).
Lottomatica group is absolutely an economic entity and its objective is to achieve its primary interest ( human need satisfaction). At the same time it cannot be considered an azienda because it does not meet all the necessary conditions. In fact , since it is controlled and directed by De Agostini spa it has not autonomous decision making authority. It means that every decision is made with the consensus of the holding company. To sum up, lottomatica is a sub system of the business group as a whole. The azienda is the entire group.
We need three elements in order to define an azienda:1) the organization has to be a system, so an integration between part and participants;2) has to have decision-making authonomy and 3) operating with economicity, so in an effective and efficient way. Lottomatica is an economic entity pursuing its goal of satisfaction of human needs BUT it lacks the second requirements of the definition: DECISION-MAKING AUTONOMY. In fact,as it is stated it is controlled and directed by De Agostini spa. We can define Lottomatica as a sub-system,but not as an azienda.
Azienda is an organisation that has 3 attributes. First, it has to be a system, Second, it should have a decision making autonomy, and finally it should operate with economicity. Thus regarding Lottomatica group, it depends whether or not its an azienda. It has to fulfil all the 3 roles, but it depends.
I believe Geox is an Azienda, as it is the controlling firm within its group, therefore it has all the three necessary requisites to be considered an azienda: it operates in autonomy and in economicity, and it is a system. The difference from Lottomatica is that Geox is the firm which is in control within its group, as we saw in the graphic on the class materials, while Lottomatica is DeAgostini's subsidiary.
I think that we cannot say if Geox is an azienda or not from the legal entity map because it is true that Geox has some subsidiaries as Luigi said,but is also true that its parent company is Lir Srl which owns about 71% of Geox shares,so in my opinion we should verify if Geox is directed by Lir Srl or not in order to understand if it has decision-making autonomy. In my opinion..it depends!
Geox has a very common structure for international groups but even if we study the structure of the group we cannot say for certain if it is only controlled or also directed by Liri Srl so I agree with Federica Sabato the reply is "it depends" because in the second case Geox loses its decision making autonomy that is one of the 3 attributes for being "an azienda".
I have my doubt of Geox being an azienda: for sure it is a system because it has a systematic and integrate coordination of parts and participiants (so it is a system), and it operates with economicity but I am not sure about the authonomy, because Geox is controlled by Lir Srl and maybe this company can influence and affect Geox's behavior.
I had not seen the graph on the slides properly, not taking into account the presence of Lir Srl. Considering this aspect I had neglected, I correct my previous answer and I agree with my colleagues as Geox is not an azienda.
If we talk about the Geox group we can say that Geox is an holding company which controls directly all its subsidiaries in the group. At the same time we cannot state if Geox can be considered an azienda because even if it's clear that it is controlled by Lir srl (71%) we do not for sure if it is also directed by it or not. In fact in this last case Geox wouldn't have decision making authority which is one of the necessary requirements to be considered as an azienda.
It dipends. The doubts concern the second requirement: the decision making autonomy. If Geox has not declared to be directed, by Lir SRL , it can be cosidered as being only controlled by the holding , while the direction power could have been delegated to Geox itself. In this case it can be considered as an azienda
In my opinion, Geox cannot be considered as an "azienda" because we cannot easily know if the decision making autonomy is in the end of the management or is controlled by the holding company. So, I notice a possible lack of one of the three requirements.
Geox could be an azienda, as far as I know and observe from its ownership structure, but we cannot be sure. In general, defining "Azienda" and analyzing the "minimum requirements" an economic entity should have in order to be one it's all but an easy and immediate task. Nice question by the way..
As others said, Geox may be an azienda, but we are not sure about that because it is controlled by Lir srl, without knwoing if it is also directed by Lir or not.
Though Lottomatica can't be defined as an azienda, as I explained in the comment released to the previous question, is for sure an economic entity because it's an organizatio,whose activities are separated from those of its owner and those of other economic entities.
Could be possible that DeAgostini family will give to Lottomatica controlling party the delegation power to direct alone the business of the company? In this way it will be possibile to define Lottomatica as an azienda?
I guess that Lottomatica already has the chance to direct alone, if we consider "direction"as the practical exercise of the control power, that is actual "running the business". Direction prerogatives, either way, will not make Lottomatica an Azienda
In your view, what are the benefits for some Italian holding companies to externally show that the directorship of their subsidiaries is not in their hands?
The declaration that a subsidiary is not directed by its holding company,can be viewed as a message to shareholder of the subsidiary. That is, by this declaration the holding company exclude the posibility of extracting benefits from its controlled party. Furthermore, the declaration can guarantee the holding company by legal responsibilities attributable to related parties transactions.
In Italy it is common that firms have a concentrated ownership and therefore there is little separation between ownership and control. This situation can frighten potential minority shareholders since they would fear that there will be little protection of their interests. For this reason the holding could choose to show that it does not direct and coordinate the subsidiaries, that in turn autonomously take strategic decisions. Another reason is that, if a holding declares not to direct its subsidiaries, it is not liable for the damages caused to the subsidiaries' stakeholders as a consequence of its strategic decisions.
Cristina, i do not believe that the Boroli-Drago families could give inependence to Lottomatica since they are also its very UCP. The only way they have to give to Lottomatica a different UCP (so autonomy), in my opinion, is that they sell most of their shares to another investor.
Lottomatica is not an Azienda. I'm completely agree with my colleagues. Lottomatica is an economic entity, the entity's activities need to be separated from activities of its owner and those of other economic entities.
Totally agree with Federica. Lottomatica and Toro Assicurazioni are two sub-holdings of two sub-groups. As a consequence, either Lottomatica and Toro have a separate and a consolidated financial statement.
Yes, of course. Toro Ass. Spa has to prepare a separate financial statement as well as a consolidated financial statement. The first is related to the company itself whereas the other is related to Toro ass as the holding company and to all its subsidiaries (therefore all the internal transactions will be ignored).
Yes , Toro Ass. is supposed to present both a separate fin.statement, regarding its own activity, and a consolidated one which aims at recording all the transactions with its subsidiaries.
I agree with you guys, it has to present an individual financial statement for what concern the activity of its previous accounting period, as well as a consolidated financial statement that combines the information from the subsidiary companies' individual financial statements.
Yes, I think Toro Ass Spa must present both a separate financial statement for itself and also a consolidated financial statement related to the company itself and to its subsidiaries.
Yes I guess so. Toro Ass. SpA has to present the consolidate financial statement that is the financial statement of the group and does not consider internal transactions among the group parties. For this it has to present also the separate financial statement.
If Toro Assicurazioni were a listed company it should pubblish both the consolidated and the separate financial statement. However, even in the case that the company is not listed, i think that it has to draft both the financial statement, even if it is not compulsory to pubblish them.
I think that Toro Ass. should present both a separate financial statement and a consolidated financial statement since it is the sub-holding of some subsidiaries. In the consolidated financial statement all the intra-group transactions will be ignored and Toro Ass. with its subsidiaries will figure as a single business entity.
We can say Lottomatica is an economic entity because It produces for the market, satisfying human needs and creating soustainable profit but We cannot say that Lottomatica is an Azienda.
In this group we have AT LEAST three consolidated financial statements: De Agostini,Lottomatica Spa and Toro Ass Spa can present these 3 financial statements. But how about the MAXIMUM number of financial statements?
We can distinguish 3 consolidated financial statements because in the group there are one holding company "De Agostini s.p.a" and two sub-holding"Lottomatica" and "Toro ass.spa"that have subsidiaries. With the consolidated fin.statement all the transactions within the group are not reported but only those transactions between the group and the market.
Strongly agree with Arianna. There have to be at least 3 consolidated financial statements because there have also be considered all the subsidiaries of each of one.
At least three fin statements should be presented. The one concerning practices between De Agostini and its sub-holdings Lottomatica and Toro , the one which shows the activity between Lottomattica and its subsidiaries, and the Toro ass one with its subsidiaries.
I agree with my colleagues, here we have at least 3 consolitated financial statement. The one of De Agostini, the one of Lottomatica, and finally the consolidated financal statement of Toro Assicurazioni.
I agree with Marco, there are at least three consolitated financial statement. There are the one of De Agostini, the one of Lottomatica, and finally the consolidated financal statement of Toro Assicurazioni.
I also think that 3 consolidated financial statements should be presented infact with have a tree-structure of three levels. Therefore the parent company De Agostini Spa and the other two sub-holding, Lottomatica Spa and Toro Ass. Spa, will present a consolidated financial statement.
I agree with my collegues: at least 3 financial statement, because we must consider also the financial statements of the subsidiaries. So, De Agostini as the holding and the other two sub-holding ( Toro Ass and Lottomatica).
We should have at least 3 of them, as all my colleagues said: DeAgostini's (which includes Lottomatica-Toro Ass.), Lottomatica's (which includes O1-O2-O3), Toro Assicurazioni's (which includes O4-O5-O6). We do not know actually if any of the Os has his subs, in that case we could have more consolidated fs. But I'm not sure if in the DeAgostini's one should include all the set of info present in Toro Ass. and Lottomatica's fss.
What if Lottomatica's board of directors (so De Agostini) decides to get into the insurance market competing against Toro Assicurazioni? Could we still call De Agostini Group a Business Group or will it become an other kind of firm network?
I think we certainly could. To me, the main problem would be how strategically operate both to avoid cannibalization of the two firms. Moreover, given that they -being part of the same group- could easly coordinate to make up collusive prices, there could be problems with antitrust laws. Do you agree?
I do not think that the problem could be related to the possibility of making up collusive prices. Actually I think that market cannibalism can be used as a strategy (called a cannibalization strategy) if the company wants to increase its market share, and hopes that the introduction of the new product will harm its competitors more than it will harm itself.
I don't think Lottomatica can do something like that; I think DeAgostini puts some limitations to their sub-holdings, otherwise they should incur in some problems if they should decide to expand their businesses
Toro Assicurazioni was firstly part of the Fiat group. According to you, why does Fiat need to control a firm operating in such a different market? In which way was it strategical for Fiat group?
yes, it can be like Giovanni said and/ or it can also be a way to create a kind of strategical marketing idea; Fiat sells you a product (car) and a service (insurance) directly related (cars need an insurance) by maybe giving a special discount to the customer; i.e. buy a Fiat car and you will have 6 months of Insurance for free by Toro Assicurazioni and a special discount after the 6th month. In this way customers are more wiling to accept this brand of insurance rather than another one.
The two markets are different but there also could be a sort of synergy. Nowadays companies try to diversify their business, exploiting their reputation in more than one market in order to increase the profittability of the entire group. If a consumer who need to insure its car know that Toro Assicurazioni is controlled by another important company such as Fiat, he/she will look at the insurance company with more confidence,
I think that Fiat used it as a vehicle to expand its businesses. In fact, Fiat does not only operate in the automobile field: during WWII it produced airplanes, for example, and since the early 20th cent., it owns Juventus FC, meaning that their interests go beyond the automobile sector
In my opinion the main reason behind is to ensure low risk diversifying business, but also Giovanni and Pier Paolo are right because in this specific case those two sector are someway correlated, so it could be also a strategical choice.
In my opinion. the main purpose was the diversification. In fact, once Fiat had the necessity to strenghten its core businees (the automotive one) has get rid of Toro immediately.
Indeed, diversification into various markets might make a company more stable in case one of the branches faces economic downturn. In this specific case, the sectors are intertwined, thus, it is not too far fetched to diversify into this area.
Hi Lorenzo, I think that at the beginning Fiat Group strategy was to diversify as much as possible its investments..but after a while, in my opinion the company lost sight on its true core business. As a consequence, for a long period, its products became less desirable compared with the ones offered by the competitors.
As I red in an Abatecola's reading, Fiat's crisis during the nineties was not strictly related to its diversification strategy, but mainly due to negative results in its core business. I think that enter in new industries was, for sure, a waste of resources that Fiat could use for innovation and R & D. How is it possible to sell the same Panda model for more than 20 years? !
Lack of ideas, lack of skills in the management, the convenience to stardardize products. Fiat suffered different crises during the 20th cent., and particularly in the 80s. In that period, the production was extremerly stardardized, following the Ford way of production. The renewal started only with Sergio Marchionne, who at first managed the Group following the lean production principles. You know that the Panda model has been very successful, it has been produced until the end of the 90s: I think they decided to keep on producing it because it was not costly, and because the didn't know which way, in terms of design, should be followed.
We have at leas three consolidated financial statement because one is of the holding DeAgostini and the other two are of the sub-holdings Lottomatica and Toro Ass.
I totally agree with Saverio there are three consolidated financial statement one from holding company the rest two from subholdings Lottomatica and Toro Ass.
Please, ask questions to your colleagues using the Figure above and the theory discussed during the lesson
ReplyDeleteGuys provide me the difference among "control", "direction" and "ownership" by means of example
DeleteIn order to be considered a shareholder (an owner) it's necessary to possess at least a share of a company.Control refers to the controlling party of the company. So it depends from the ownership structure and therefore from the percentage of shares owned. It could be a de facto control (less then 50% of shares but enough to control) or a de jure control ( more than 50% of shares). Only the contolling party has the power to control and this power cannot be delegated to nobody. Anyway the controlling party can delegate the power to exert the control to the management (DIRECTION).
DeleteIn terms of "Ownership" we can say by theory that every person/entity that owns a share it is also owner of the company;
DeleteThe "Control" is the power to govern financial and operating policies of the company with the goal to obtain benefits from the activities; it depends on the ownership structure of a firm; the control of the firm can be "DE JURE" when you have at least the 50% of shares and "DE FACTO" when you have at least the 20% of shares.
The "Direction" is the practical exercise of the control power; the Direction is made by the management (chosen by the controlling party.
Providing the example of Fiat. Fiat is owned by its shareholders (all of them), controlled by Agnelli family (even if it seems a public company there are some Agnelli's family members within the Board of directors of Fiat) and mainly directed by its CEO who is Sergio Marchionne (appointed by FIAT's board of directors).
DeleteWith "owners" we identify those subjects who own shares within a company, whether the company is widely held, a family company or a State-owned company. The "Control" is the power to govern and manage the firm itself. In public company this role belongs to the management, instead in family business this role is exercised by the Major owner. Finally, the controller can delegate its power to other subjects, in this case we have that the "direction" and "control" are exercised by different subjects .This aspect is particularly relevant in case of Business Group.
Delete"Owners" are the subjects that have the shares of the company, "control" means governing the financial and operating policies of an entity in order to obtain benefits, "direction" is the exercise of the control power.
DeleteI agree with Valerio,
Delete- Ownerships are the subjects that have the shares of the company,
- Control means governing the financial and operating policies of an entity in order to obtain benefits,
- Direction is the exercise of the control power.
who's the ultimate controlling party?
DeleteUltimate governing party would be one of the tree leaders of the group.It does not neccesarily have to be the ultimate owner alone.
DeleteIs Lottomatica group an azienda?
ReplyDeleteNo it is not an azienda. Azienda is an italian concept, defined by three elements studied in "Economia aziendale": System, decision making power and economicity ( efficency and effectivness).
DeleteLottomatica is not an autonomous company because it is controlled by De Agostini. Therefore Lottomatica results as a sub-system and we cannot call it "azienda" but, on the contrary an "Economic entity".
I agree, if Lottomatica and its subsidiaries are considered as a single entity,the first condition necessary to be defined as "azienda" , the systematic view, is accomplished, because part and participants are supposed to work in integration in order to reach common objectives. However, if Lottomatica declares to be directed by DeAgostini SPA , it cannot be considered as an azienda because the decision making authority is no more availeable, the BOD is no more autonomous in ruling the organization.
DeleteLottomatica is an economic entity, but it is not an azienda. Accorting to the italian definition to be considered "azienda" it needs to satisfy three essencial conditions. Firstly it should be a system of parts, partecipants and relations among them oriented toward a common goal. They operate in different sector without any form of connection among them, so they have different goals and cannot be considered as an unique system. Secondly an azienda has decision-making autonomy. Since Lottomatica is controlled by De Agostini, it cannot have the complete autonomy in decision making. Thirdly an azienda operate with economicity.
DeleteAn economic entity could be considered as an azienda if it has 3 attributes (as most of you said) : being a systematic organization, having a decision-making autonomy and respecting the economicity concept that refers to efficiency of allocation of resources and and effectiveness in terms of output and goals. lottomatica group is not at all a system because it isn't related to the other company that is an insurance company ( no same sector) and it is a subsystem of a greater entity that could be defined as azienda, that's why depending on it it cannot be considered autonomous.
DeleteLottomatica is not an Azienda but an economic entity due to the lack of the second requirement : "decision making autonomy" that is exerted by the holding " De Agostini Spa".
DeleteLottomatica is not an azienda because it decleared that is directed by De Agostini. It means that it doesn't have one of the 3 attributes that an organization has to have in order to be considered as an azienda: the decision making autonomy. Posses the 2 other attributes alone, be a system and operates with economicity, is not enough to be considered as an azienda.
DeleteWe can't define Lottomatica as an azienda as it is a subsidiary of De Agostini group, even though the two firms do not operate in the same field. Lottomatica owns only two of the three requisites necessary to be considered an azienda: economicity and being a system. But it lacks of the third one, being autonomous, since it is a subsidiary of DeAgostini.
DeleteIf Lottomatica declares that it is dircted and coordinated by De Agostini, then I agree with you. Since there are plenty of subsidiaries that can exercise totally or partially a decision making autonomy, it can happen that a subholding (with its entire subgroup) will be considered as an "azienda":
DeleteIn my view, Lottomatica is an economic entity but it is not an azienda. because to become an azienda group it has three 3 attributes (1. It has to be a system. 2. It should have a decision making autonomy. 3. It should operate with economicity)
DeleteLottomatica Spa cannot be considered as an "Azienda" in the views of three attributes discussed in class. Although the company seeks to operate efficiently and effectively, it lacks indeed the capacity to be autonomously governed. It is in fact straightforward to see that Lottomatica spa is not able to exert decisions under under its fully control of the BoD.
DeleteWe know that Lottomatica is a business entity but we can not say if Lottomatica is an azienda, because we don't know if it has decision-making autonomy and we are not able to say if it's a system. That's why we separate the concept of business entity from the azienda ones.
DeleteLottomatica is not an azienda. It is controlled by De Agostino Spa so it has not an auonomus decision making power. The lack of this attribute ( that is crucial for defining an economic entity as an azienda) allow us to state that it is surely an economic entity but not an azienda.
DeleteI agree with you guys, Lottomatica cannot be defined as an Azienda, nevertheless it can be defined as an economic entity. The reason why it is not an Azienda is that, even though it respects the necessary conditions about the 'system' and 'economicity', it lacks the necessary requirement about having decision making autonomy since it is a subsidiary controlled by De Agostini Spa.
DeleteI agree with you all guys. For sure we know that Lottomatica has not the third feature that qualifies an azienda. But do you guys think the other two requirements are for sure met? Do we know, and how we do we know if the conditions of economicity and being a system are present in Lottomatica?
DeleteCan every economic entity be considered as "azienda"?
DeleteNo. An economic entity to be considered as an azienda must meet three fundamental requirements:
Delete1) the organization has to be a system, that refers to the integration between part and participants;
2) It must have decision-making authonomy and
3) It must operate with economicity, so in an effective and efficient way.
No it is not an "azienda" since it does not satisfy all the requirements, in particular the BoD of Lottomatica Spa cannot be considered autonomous since it is directed by de Agostini.
Deleteno we can't consider it as azienda , because it didn't match conditions such as :making decision is not autonomy , it's directled by de Agostini
DeleteNo because any firm to be considered an Azienda it must have 3 attributes to respect: it must be a system, must have a decision making autonomy and must operate with economicity. Lottomatica is a system because its business is not influenced by De Agostini and Toro Ass. SpA But it does not have a decision making autonomy because its decisions will be influenced by De Agostini directors.
DeleteIn my opininon an azienda is something tha create economic value and through this it is able to substain itself. So i think that Lottomatica, altought it is a subsidiary, it should be considered as azienda
DeleteTo be considered Azienda a firm, or a group, must have 3 attributes: it has to be a system, it must have autonomous decision-making and it must operate with economicity, that is effectiveness and efficiency. If we hypothesize that Lottomatica Spa is controlled and directed by De Agostini Spa, we cannot considere it as an Azienda.
DeleteI agree with you, indeed since Lottomatica is directed by De Agostini Spa, it cannot be considered an azienda because it lacks the necessary condition of decision-making autonomy.
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DeleteWe cannot consider Lottomatica as an "azienda" due to the lack of one of the three basic elements:
Deletea)Integration between part and participants.
b)No decision-making authonomy (the problem in Lottomatica).
c)Economicity
I agree with many of the comments above, with Arianna in particular. Lottomatica IS a system, it MAY operate with economicity, but it's definitively NOT autonomous.
DeleteWe can't say that Lottomatica is an Azienda, as it doesn't satisfy all the three criteria of Azienda. In particular, it is interesting to highlight how Lottomatica lacks the required autonomy as it is controlled and directed by De Agostini spa. This means that it has not a full autonomy of the decision making.
DeleteLottomatica is an economic entity but it is not an azienda. In fact, to become an azienda 3 attributes are needed: It has to be a system; It should have a decision making autonomy; It should operate with economicity.
DeleteSo, Lottomatica group is not at all a system because it isn't related to the other company that is an insurance company and it is a subsystem of a bigger entity that could be defined as azienda, that's why depending on it it cannot be considered autonomous.
For an azienda to be existent, the following attributes have to be fulfilled:
Delete1. system
2. decision making autonomy
3. economicity (effectiveness & efficiency)
As Lottomatica is directed by DeAgostini SPA, it is controlled by it and does not possess decision making autonomy which results in the fact that is cannot be an azienda.
No it is not an azienda. Azienda is an italian concept, and, as we studied in Economia Aziendale has to have decision making power and economicity and this is not the case of Lottomatica since it is controlled by DeAgostini, so we can call it economic entity , not azienda.
DeleteI agree with Luigi. It's impossible to define Lottomatica an azienda because it is a subsidiary of De Agostini group,
DeleteIs Lottomatica group an economic entity?
ReplyDeleteAlthough Lottomatica group cannot be defined as Azienda, it is an economic entity. In fact, it is listed on the stock exchange, it has its own business activities and its own financial statement.
DeleteAs Michele said, Lottomatica is not an azienda but it is absolutely an economic entity. In fact , as we discussed in class, the satisfaction of human needs constitutes economic activity. In addiction we have to remember that even if Lottomatica can be considerd an economic entity in isolation, the entire group has to be seen as a single economic entity as well.
DeleteFor sure that Lottomatica is a economic entity because it is listed and it has the goal of the customer satisfaction.
DeleteI agree with my colleagues. However, I have some doubts on the market in which Lottomatica (actually GTECH) operates. Is it a competitive market or not?
DeleteDefinition: The business entity is a productive organization (parts+participants) that carries out an economic activity (goods and services) in order to satisfy human needs (objective). Therefore Lottomatica is an economic entity. I think that there is no concern in considering whether the firm is listed or not.
DeleteFor sure azienda is an economic entity but the reverse is not always true
DeleteOf course it is, since it carries out economic activities to satisfy human needs and wants.
DeleteYes, it is an economic entity. Indeed, it is composed by parts and participants for running the economic activity to satisfy human needs!
DeleteFor sure Lottomatica is an economic entity. It satisfies human needs and does it crating value.
DeleteYes of course it is an economic entity, since its primary objective is to satisfy human needs through the creation of value.
DeleteYes, because it works as a business entity, with the purpose of creating value. On the contrary in cannot be defined as an azienda because it lacks of autonomy.
DeleteYes, I believe that it is an economic entity, since it aims to address human needs, but at the same time it lacks the requirements of an "azienda". Therefore we can say that an economic entity is not necessarily also an azienda, but can we also say that an azienda is necessarily an economic entity? I would say yes.
Deletesure Lottomatica is a economic entity because it is listed and it aims to achieve customer satisfaction
DeleteI agree with my colleagues Lottomatica is an economic entity: first because is listed and second because the main objective is to create value by satisfying human needs.
DeleteYes, it is. This is because its main objective is to satisfy human needs by carring out an economic activity.Then , we can also add that it is an economic entity because it is composed by parts and participants.
DeleteI think Lottomatica group an economic entity, because their objectives aim to achieve customer satisfaction
DeleteLottomatica is an economic entity, since it lacks the decision making autonomy, necessary to be considered azienda
DeleteI agree with those who said that Lottomatica is an economic entity. Indeed an economic entity is an organization (business entity or non-business entity) that carries out an economic activity in order to satisfy human needs, (hopefully also creating value).
DeleteYes, we can consider Lottomatica as an economic entity because it tries to satisfy human needs with its services and try to achieve the goal of satisfying customer satisfaction
DeleteWe have not all the numbers, but the De Agostini's "subsidiary" status makes it a non independent economic entity. We have no doubts about it when we consider that Lottomatica is listed, care its own operations and has to redact its own financial statement (wich will appear in the consolidated financial statement of the group).
DeleteYes, it is an economic entity because satisfys needs carrying out economic actvities
DeleteFor me yes, it can be considered an economic entity
DeleteI agree with Alberto when he says that azienda is always an econic entity but the reverse is not always true. Very
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DeleteSorry I've made confusion with former question. Yes it can be considered as an entity, also according to the italian law
DeleteLottomatica group is absolutely an economic entity and its objective is to achieve its primary interest ( human need satisfaction). At the same time it cannot be considered an azienda because it does not meet all the necessary conditions. In fact , since it is controlled and directed by De Agostini spa it has not autonomous decision making authority. It means that every decision is made with the consensus of the holding company. To sum up, lottomatica is a sub system of the business group as a whole. The azienda is the entire group.
ReplyDeleteWe need three elements in order to define an azienda:1) the organization has to be a system, so an integration between part and participants;2) has to have decision-making authonomy and 3) operating with economicity, so in an effective and efficient way. Lottomatica is an economic entity pursuing its goal of satisfaction of human needs BUT it lacks the second requirements of the definition: DECISION-MAKING AUTONOMY. In fact,as it is stated it is controlled and directed by De Agostini spa. We can define Lottomatica as a sub-system,but not as an azienda.
ReplyDeleteAzienda is an organisation that has 3 attributes. First, it has to be a system, Second, it should have a decision making autonomy, and finally it should operate with economicity. Thus regarding Lottomatica group, it depends whether or not its an azienda. It has to fulfil all the 3 roles, but it depends.
ReplyDeleteLottomatica group can be considered as an azienda and it cant at the same time, so I have to say it depends. It has to fulfil the 3 attributes.
ReplyDeleteHey guys, Is Geox an Azienda?
ReplyDeleteI believe Geox is an Azienda, as it is the controlling firm within its group, therefore it has all the three necessary requisites to be considered an azienda: it operates in autonomy and in economicity, and it is a system. The difference from Lottomatica is that Geox is the firm which is in control within its group, as we saw in the graphic on the class materials, while Lottomatica is DeAgostini's subsidiary.
DeleteI think that we cannot say if Geox is an azienda or not from the legal entity map because it is true that Geox has some subsidiaries as Luigi said,but is also true that its parent company is Lir Srl which owns about 71% of Geox shares,so in my opinion we should verify if Geox is directed by Lir Srl or not in order to understand if it has decision-making autonomy. In my opinion..it depends!
DeleteGeox has a very common structure for international groups but even if we study the structure of the group we cannot say for certain if it is only controlled or also directed by Liri Srl so I agree with Federica Sabato the reply is "it depends" because in the second case Geox loses its decision making autonomy that is one of the 3 attributes for being "an azienda".
DeleteI believe It cannot be consider an Azienda in light of the fact that its BoD is subjected to the decision making power if Lir Srl
DeleteI have my doubt of Geox being an azienda: for sure it is a system because it has a systematic and integrate coordination of parts and participiants (so it is a system), and it operates with economicity but I am not sure about the authonomy, because Geox is controlled by Lir Srl and maybe this company can influence and affect Geox's behavior.
DeleteI had not seen the graph on the slides properly, not taking into account the presence of Lir Srl. Considering this aspect I had neglected, I correct my previous answer and I agree with my colleagues as Geox is not an azienda.
DeleteIf we talk about the Geox group we can say that Geox is an holding company which controls directly all its subsidiaries in the group. At the same time we cannot state if Geox can be considered an azienda because even if it's clear that it is controlled by Lir srl (71%) we do not for sure if it is also directed by it or not. In fact in this last case Geox wouldn't have decision making authority which is one of the necessary requirements to be considered as an azienda.
DeleteIt dipends. The doubts concern the second requirement: the decision making autonomy. If Geox has not declared to be directed, by Lir SRL , it can be cosidered as being only controlled by the holding , while the direction power could have been delegated to Geox itself. In this case it can be considered as an azienda
DeleteIn my opinion, Geox cannot be considered as an "azienda" because we cannot easily know if the decision making autonomy is in the end of the management or is controlled by the holding company. So, I notice a possible lack of one of the three requirements.
DeleteGeox could be an azienda, as far as I know and observe from its ownership structure, but we cannot be sure. In general, defining "Azienda" and analyzing the "minimum requirements" an economic entity should have in order to be one it's all but an easy and immediate task. Nice question by the way..
DeleteAs others said, Geox may be an azienda, but we are not sure about that because it is controlled by Lir srl, without knwoing if it is also directed by Lir or not.
Deletethank you guys
DeleteHi Fede. Yes, Geox is an Azienda because it is the controlling firmof the group and it has all the necessary requisites to be considered an azienda.
DeleteIn my opinion it could considered as an azienda
DeleteThough Lottomatica can't be defined as an azienda, as I explained in the comment released to the previous question, is for sure an economic entity because it's an organizatio,whose activities are separated from those of its owner and those of other economic entities.
ReplyDeleteCould be possible that DeAgostini family will give to Lottomatica controlling party the delegation power to direct alone the business of the company? In this way it will be possibile to define Lottomatica as an azienda?
ReplyDeleteI believe, that it will. In your case Lottomatica will present all the characteristics that are required to be called "azienda".
DeleteI don't think so because it might also be taken into account the possibility to revoke the delegation of power one day.
DeleteI guess that Lottomatica already has the chance to direct alone, if we consider "direction"as the practical exercise of the control power, that is actual "running the business". Direction prerogatives, either way, will not make Lottomatica an Azienda
DeleteYes, in this case the decision making autonomy would be granted. Lottomatica would be just contolled but no more directed by the holding.
DeleteQUESTION:
DeleteIn your view, what are the benefits for some Italian holding companies to externally show that the directorship of their subsidiaries is not in their hands?
The declaration that a subsidiary is not directed by its holding company,can be viewed as a message to shareholder of the subsidiary. That is, by this declaration the holding company exclude the posibility of extracting benefits from its controlled party. Furthermore, the declaration can guarantee the holding company by legal responsibilities attributable to related parties transactions.
DeleteIn Italy it is common that firms have a concentrated ownership and therefore there is little separation between ownership and control. This situation can frighten potential minority shareholders since they would fear that there will be little protection of their interests. For this reason the holding could choose to show that it does not direct and coordinate the subsidiaries, that in turn autonomously take strategic decisions. Another reason is that, if a holding declares not to direct its subsidiaries, it is not liable for the damages caused to the subsidiaries' stakeholders as a consequence of its strategic decisions.
DeleteCristina, i do not believe that the Boroli-Drago families could give inependence to Lottomatica since they are also its very UCP. The only way they have to give to Lottomatica a different UCP (so autonomy), in my opinion, is that they sell most of their shares to another investor.
DeleteYes Cristina, it could be possibile! and in this case Lottomatica will become controlled by the holding, but not directed anymore.
DeleteLottomatica is not an Azienda. I'm completely agree with my colleagues. Lottomatica is an economic entity, the entity's activities need to be separated from activities of its owner and those of other economic entities.
ReplyDeleteShould Toro Ass. spa have a financial statement?
ReplyDeleteYes, Toro Ass. Spa will present a consolidated financial statement that includes its financial statement and those of its subsidiaries.
DeleteYes,I think that Toro Ass. Spa can present both consolidated and separate financial statement,as Lottomatica.
DeleteI think yes , Toro Ass, spa should have a fin. statement and also a consolidated one. What about Lottomatica Spa?
DeleteToro Ass. Spa will present two consolidate statements: one for the holding company and one for the entire group.
DeleteThank you guys. Arianna i think that also Lottomatica should present the financial statement because is a subsidiary like Toro ass.
DeleteTotally agree with Federica. Lottomatica and Toro Assicurazioni are two sub-holdings of two sub-groups. As a consequence, either Lottomatica and Toro have a separate and a consolidated financial statement.
DeleteYes, of course. Toro Ass. Spa has to prepare a separate financial statement as well as a consolidated financial statement. The first is related to the company itself whereas the other is related to Toro ass as the holding company and to all its subsidiaries (therefore all the internal transactions will be ignored).
DeleteYes , Toro Ass. is supposed to present both a separate fin.statement, regarding its own activity, and a consolidated one which aims at recording all the transactions with its subsidiaries.
DeleteI agree with you guys, it has to present an individual financial statement for what concern the activity of its previous accounting period, as well as a consolidated financial statement that combines the information from the subsidiary companies' individual financial statements.
Deletein my opinion yes, Toro Ass. Spa can present both consolidated and separate financial statement,as Lottomatica.
DeleteYes, I think Toro Ass Spa must present both a separate financial statement for itself and also a consolidated financial statement related to the company itself and to its subsidiaries.
DeleteYes I guess so. Toro Ass. SpA has to present the consolidate financial statement that is the financial statement of the group and does not consider internal transactions among the group parties. For this it has to present also the separate financial statement.
DeleteYes I think so. Toro Assicurazioni should present a financial statement for itself and the consolidated financial statement for all its subsidiaries.
DeleteIf Toro Assicurazioni were a listed company it should pubblish both the consolidated and the separate financial statement. However, even in the case that the company is not listed, i think that it has to draft both the financial statement, even if it is not compulsory to pubblish them.
DeleteI think Toro Ass. spa have a financial statement, and in their financial statement includes its three subsidiaries (O4, O5, O6)
DeleteYes, Toro Ass. should have a financial statement and a consolidated financial statement
DeleteI think that Toro Ass. should present both a separate financial statement and a consolidated financial statement since it is the sub-holding of some subsidiaries. In the consolidated financial statement all the intra-group transactions will be ignored and Toro Ass. with its subsidiaries will figure as a single business entity.
DeleteToro Ass. shuld have both separate and consolidated financial statements for all its subsidiaries.
DeleteLucio, Toro Ass. in this case should have both separate and consolidated financial statements (according to the number of subsidiaries)
DeleteI agree, it should have both a consolidated financial statement and a separate financial statement.
DeleteI believe Toro Ass. Spa will present a consolidated financial statement that includes its financial statement and the ones of its subsidiaries.
DeleteYes, Toro Assicurazioni has to present a consolidated financial statement.
Deleteboth separate and consolidate, some other information are included also in the De Agostinis consolidate financial statement
DeleteWe can say Lottomatica is an economic entity because It produces for the market, satisfying human needs and creating soustainable profit but We cannot say that Lottomatica is an Azienda.
ReplyDeleteGuys, how many consolidated financial statements we have in this group?
ReplyDeleteIn this group we have AT LEAST three consolidated financial statements: De Agostini,Lottomatica Spa and Toro Ass Spa can present these 3 financial statements. But how about the MAXIMUM number of financial statements?
DeleteWe can distinguish 3 consolidated financial statements because in the group there are one holding company "De Agostini s.p.a" and two sub-holding"Lottomatica" and "Toro ass.spa"that have subsidiaries. With the consolidated fin.statement all the transactions within the group are not reported but only those transactions between the group and the market.
DeleteStrongly agree with Arianna. There have to be at least 3 consolidated financial statements because there have also be considered all the subsidiaries of each of one.
DeleteAt least three fin statements should be presented. The one concerning practices between De Agostini and its sub-holdings Lottomatica and Toro , the one which shows the activity between Lottomattica and its subsidiaries, and the Toro ass one with its subsidiaries.
Deletei agree with all of you guys , that we have 3 consolidated financial statement , De Agostini,Lottomatica Spa and Toro Ass Spa
DeleteWe have at least 3 financial statement, since we must consider also the financial statements of the subsidiaries.
DeleteWe should have at least 3 financial statements: DeAgostini(holding company), Lottomatica and Toro Assicurazioni(the 2 sub-holdings)
DeleteI agree with my colleagues, here we have at least 3 consolitated financial statement. The one of De Agostini, the one of Lottomatica, and finally the consolidated financal statement of Toro Assicurazioni.
DeleteI agree with Marco, there are at least three consolitated financial statement. There are the one of De Agostini, the one of Lottomatica, and finally the consolidated financal statement of Toro Assicurazioni.
DeleteAt least three, since there are "De Agostini", "Toro Assicurazioni" and "Lottomatica"
DeleteI also think that 3 consolidated financial statements should be presented infact with have a tree-structure of three levels. Therefore the parent company De Agostini Spa and the other two sub-holding, Lottomatica Spa and Toro Ass. Spa, will present a consolidated financial statement.
DeleteI agree with my collegues: at least 3 financial statement, because we must consider also the financial statements of the subsidiaries. So, De Agostini as the holding and the other two sub-holding ( Toro Ass and Lottomatica).
DeleteI agree with you, at least must be present 3 financial statements, corresponding to three levels within the structure.
DeleteWe should have at least 3 of them, as all my colleagues said: DeAgostini's (which includes Lottomatica-Toro Ass.), Lottomatica's (which includes O1-O2-O3), Toro Assicurazioni's (which includes O4-O5-O6). We do not know actually if any of the Os has his subs, in that case we could have more consolidated fs. But I'm not sure if in the DeAgostini's one should include all the set of info present in Toro Ass. and Lottomatica's fss.
DeleteVery good guys! you got it
Delete1 consolidated financial statement and 9 seperate financial statements
DeleteThree consolidated financial statements: 1 for the holding and 2 for the sub-holdings.
DeleteAt least 3. We don't know if there are other groups under "O#" level
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ReplyDeleteWhat if Lottomatica's board of directors (so De Agostini) decides to get into the insurance market competing against Toro Assicurazioni?
ReplyDeleteCould we still call De Agostini Group a Business Group or will it become an other kind of firm network?
I think we certainly could. To me, the main problem would be how strategically operate both to avoid cannibalization of the two firms. Moreover, given that they -being part of the same group- could easly coordinate to make up collusive prices, there could be problems with antitrust laws. Do you agree?
DeleteI do not think that the problem could be related to the possibility of making up collusive prices. Actually I think that market cannibalism can be used as a strategy (called a cannibalization strategy) if the company wants to increase its market share, and hopes that the introduction of the new product will harm its competitors more than it will harm itself.
DeleteI don't think Lottomatica can do something like that; I think DeAgostini puts some limitations to their sub-holdings, otherwise they should incur in some problems if they should decide to expand their businesses
DeleteToro Assicurazioni was firstly part of the Fiat group. According to you, why does Fiat need to control a firm operating in such a different market? In which way was it strategical for Fiat group?
ReplyDeleteI believe they considered it useful in order to difersify their interests, but at the same time they risked to lose of sight their "core business"
Deleteyes, it can be like Giovanni said and/ or it can also be a way to create a kind of strategical marketing idea; Fiat sells you a product (car) and a service (insurance) directly related (cars need an insurance) by maybe giving a special discount to the customer; i.e. buy a Fiat car and you will have 6 months of Insurance for free by Toro Assicurazioni and a special discount after the 6th month. In this way customers are more wiling to accept this brand of insurance rather than another one.
DeleteThe two markets are different but there also could be a sort of synergy. Nowadays companies try to diversify their business, exploiting their reputation in more than one market in order to increase the profittability of the entire group. If a consumer who need to insure its car know that Toro Assicurazioni is controlled by another important company such as Fiat, he/she will look at the insurance company with more confidence,
DeleteI think that Fiat used it as a vehicle to expand its businesses. In fact, Fiat does not only operate in the automobile field: during WWII it produced airplanes, for example, and since the early 20th cent., it owns Juventus FC, meaning that their interests go beyond the automobile sector
DeleteIn my opinion the main reason behind is to ensure low risk diversifying business, but also Giovanni and Pier Paolo are right because in this specific case those two sector are someway correlated, so it could be also a strategical choice.
DeleteIn my opinion. the main purpose was the diversification. In fact, once Fiat had the necessity to strenghten its core businees (the automotive one) has get rid of Toro immediately.
DeleteTotally agree with Giovanni. I believe it has been a way to diversify businesses. We have many examples regarding this in Fiat
DeleteIndeed, diversification into various markets might make a company more stable in case one of the branches faces economic downturn. In this specific case, the sectors are intertwined, thus, it is not too far fetched to diversify into this area.
DeleteI agree with Pier. It's not only in order to diversy, but also in order to create synergies between firms and products
DeleteHi Lorenzo, I think that at the beginning Fiat Group strategy was to diversify as much as possible its investments..but after a while, in my opinion the company lost sight on its true core business. As a consequence, for a long period, its products became less desirable compared with the ones offered by the competitors.
ReplyDeleteAs I red in an Abatecola's reading, Fiat's crisis during the nineties was not strictly related to its diversification strategy, but mainly due to negative results in its core business. I think that enter in new industries was, for sure, a waste of resources that Fiat could use for innovation and R & D. How is it possible to sell the same Panda model for more than 20 years? !
ReplyDeleteLack of ideas, lack of skills in the management, the convenience to stardardize products. Fiat suffered different crises during the 20th cent., and particularly in the 80s. In that period, the production was extremerly stardardized, following the Ford way of production. The renewal started only with Sergio Marchionne, who at first managed the Group following the lean production principles. You know that the Panda model has been very successful, it has been produced until the end of the 90s: I think they decided to keep on producing it because it was not costly, and because the didn't know which way, in terms of design, should be followed.
DeleteIt is strategic dormancy. The management, relying too mutch on good the past result do not innovate.
DeleteHi guys, how many financial statements we have in this group?
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DeleteWe have at leas three consolidated financial statement because one is of the holding DeAgostini and the other two are of the sub-holdings Lottomatica and Toro Ass.
Deletethree consolidated financial statements.
DeleteYes guys. We have at least 3 consolidated financial statements
DeleteAs I said befor at least 3. We don't know if there are other groups under "O#" level
DeleteAs already pointed out in the previous question, we have at least three financial statements.
ReplyDeleteI totally agree with Saverio there are three consolidated financial statement one from holding company the rest two from subholdings Lottomatica and Toro Ass.
ReplyDelete[Question] How many subsidiaries could be exist under O1 level?
ReplyDelete