Corporate Strategy Case Study

Poste Italiane: A Story of Corporate Metamorphosis

OR

Abstract:
In 1990s, Poste Italiane, the largest company of Italy, was facing huge financial losses. It was one of Europe’s most inefficient companies and was synonymous with long queues at the post offices, not so polite clerks at the customer interaction help desks and late delivery of mails. However, efforts directed towards financial and operational revival of the company started in 1998 when Corrado Passera (Passera) took over as the CEO of the company. Passera undertook a number of strategies to restructure the organisation and diversified into financial services. In 2002, Massimo Sarmi (Sarmi) succeeded Passera as the next CEO. He further strengthened the company’s operation by reinforcing the financial division and upgrading the information technology infrastructure. From 2003, such corporate makeover strategies had started delivering results, when it attained its first break even. In 2005, Poste Italiane had revenue of USD 20,485.2 million and a profit of USD 433.5 million. In recognition of its exemplary turnover, the company was placed in the list of Fortune 500 companies for the first time in 2006. The case details the various restructuring strategies of the two CEO’s. It also provides a brief description of the postal service sector of the European Union.

Pedagogical Objectives:

• To discuss the company’s poor financial position in the 1990’s and the reasons behind them
• To discuss the corporate restructuring strategies of its CEOs, Corrado Passera and Massimo Sarmi
• To discuss the company’s diversification into financial services
• To discuss the HR strategies pertaining to such restructuring

Keywords : Corrado Passera; Massimo Sarmi; Corporate Strategies Case Study; Poste Italiane; Corporate restructuring; Growth strategy; Public postal operators; Employee lay-off; Reims agreement; Terminal dues compensation; Postevita; Banco Posta; Information technology (IT) infrastructure; Customer relationship management; Functional organisation