Gucci Group, N.V. Case Essay

1748 words - 7 pages

Case, Gucci Group N.V. (A)
1. Map competitive positioning of different players in the luxury goods arena and state who is best positioned and why?
The luxury goods arena is a highly competitive industry in which companies must position themselves with both objective and subjective differentiating factors. Although humans are usually rational buyers when it comes to commodities and the necessities of life, much of this logic is thrown out when purchasing high-end luxury goods. While high quality is a necessary component of luxury goods, it is the brand’s image that a customer is really purchasing. Taking this into consideration, the true competition in this industry lies not in the ...view middle of the document...

All of these moves have been the result of successful strategic positioning by Prada management, which has resulted in the continual growth and expansion of the company.
While Prada has historically been small, yet growing quickly, LVMH has been much larger and more stable over its life. Out of the three middle tier brands, LVMH is most likely best positioned for success because two factors: the large number of established luxury brands they own, and the diversity of their portfolio, which is well balances across leather goods/fashion apparel, champagnes/wines/spirits, selective retailing, and fragrances/cosmetics. This diversification was a result of the synergistic efforts implemented in the late 1990s by Bernard Arnault. He thought the company could better position itself by taking advantage of their size to reduce costs and improve profitability. Furthermore, he placed a huge emphasis on controlling product quality, which has led to a continual positive brand-name association. Lastly, LVMH has used the popularity of their Louis Vuitton brand, which has historically accounted for around 50% of their products, to convince department stores to allow distribution of some of their lesser-known brands. This has resulted in an increase in sales for both the Louis Vuitton brand and for the lesser-known brands, which may have not been purchased if they had not been placed in stores near Louis Vuitton products. Overall, LVMH has successfully positioned itself by establishing an extremely positive brand image and by diversifying across several sectors of the industry.
Because this case focuses on Gucci, we will conduct a more in-depth analysis of Gucci’s competitive advantage and strategic positioning using SWOT analysis, which identifies a company’s strengths, weaknesses, opportunities, and threats. Throughout its life Gucci has developed many sustainable strengths, such as strong worldwide brand recognition, ownership of many different highly regarded luxury brands, and a strong value chain. While all of the heavy-hitters in the luxury goods arena focus on their value chain with regard to quality manufacturing and a large investment, Gucci has sustained much competitive advantage through control of their distribution channels. While many brands sell their products through a wide variety of locations, Gucci primarily sells its products through directly operated stores, which allows them to control their brand image, pricing, and the overall shopping experience of Gucci products. Moreover, while most luxury brands are sold solely through physical retail stores, Gucci has positioned itself well for the young and “hip” demographic by selling their products through their own website. On the contrary, two of Gucci’s weaknesses concerns instability resulting from owning multiple different brands, not all of which will always be profitable, and the large investment they must make in marketing and advertising in order to sustain its brand image....

Other Papers Like Gucci Group, N.V. Case

Heineken Case Analysis

1724 words - 7 pages , January). Heineken NV in beer (world). Retrieved from Gale Group. (2012). Heineken N.V. Financial and strategic analysis review, Retrieved by: Business Insights database. Imbs, J. (2010). The First Global Recession in Decades. IMF Economic Review, 58(2), 327-354. doi:10.1057/imfer.2010.13 Drejer, A., 2002, Strategic Management and Core Competencies: Theory and Application, Quorum.

Ethics for Prosecutors and Defense Attorney's

1180 words - 5 pages where they found drugs cash and a pair of Gucci boots. White admitted the drugs were his and faced a minimum 20 years in a federal prison, but rejected a plea deal arranged by Daum. Daum became desperate for a win and conspired with White, his girlfriend, and relatives to focus the blame on someone else. Staged photos, lease agreements, and a trip to New York by White’s girlfriend were presented as real in order to help the case; which was rife

Marketing Plan

2152 words - 9 pages be brought back by the date where the renting period ends. The deposit will be as high as 50% of the actual sales price of the item (Mc Killip, T., 2010). In case of damage of the good - deposit doesn’t return. 9. Sales channels Speaking about sales channels, the first in the chain of Sales channels will directly manufacturer, then the item goes to retail stores (such as Gucci, Dior, Hermes, Polaroid, Ray ban, etc.) Then our company is buying luxury goods in these stores. And we rent luxuries, so the relationship between our company and the people who take to rent - return.

Decision Making

3944 words - 16 pages counterfeit products straightaway upon discovering them. Nonetheless, this system is not without its flaws as in most cases only a small portion of goods are inspected for counterfeits (OECD, 2007). The third legal measure LV should utilise to battle counterfeiting is to monitor or other online auction sites (Amazon, In this case, brand owner (LV) has an opportunity to inform eBay of listings for fakes by joining VeRO

Lvmh Report

4140 words - 17 pages LVMH Moet Hennessy Louis Vuitton is an international group of companies engaged in production and sale of luxury goods. The group is active in a number of global markets including wines and spirits, fashion and leather goods, fragrances and cosmetics, jewelry and selective retailing sectors. LVMH operates about 1,859 stores worldwide. LVMH Moet Hennessy Louis Vuitton possesses a portfolio of over 60 premium brands such as Louis Vuitton

Mergers And Acquisitions

4859 words - 20 pages Mittal and his son Aditya. It was formed when Ispat International N.V. acquired LNM Holdings N.V. (which were already controlled by Lakshmi Mittal) and merged with International Steel Group Inc. Mittal steel was in an acquisition spree from the year 1989. It bought sick units from different parts of the world and converted them into profitable units. In this manner the Mittal steel had huge assets round the globe in South Africa, Mexico

The Post World War Was Primarily Shaped by a Clash Between Communism and Capitalism

2035 words - 9 pages Berlin however that was not the case as the west reacted by airlifting food and clothing thereby leading Stalin to give up. Tension between these two forces communism and capitalism led to the division of Germany into two hostile camps and this was the result of the reaction of both sides towards each other. To react upon the actions of Soviet Union the United States on its Germany front it created the Federal Republic of Germany in order to isolate

Bitter Gourd

2289 words - 10 pages Bank of Communications (PBCom) * Standard Chartered Bank * The Bank of Tokyo-Mitsubishi UFJ, Ltd. * Philippine Veterans Bank (Veterans Bank; PVB) * Robinsons Bank * Deutsche Bank * ANZ * JPMorgan Chase * Mizuho Bank, Ltd. Manila Branch * ING Group N.V. * BDO Private Bank (subsidiary of BDO Unibank) * CTBC Bank (Chinatrust) * Bank of China Manila Branch * Bank of America, N.A. * Mega

Impact Of Age Cohorts On Music Consumption

5262 words - 22 pages I. Introduction.The assignment of music consumption became the culmination of interesting and challenging work of understanding consumer behaviour. Following the laws of research, we used both primary and secondary data. Primary data included 4 in-depth one hour interviews with people of 26, 28, 30 and 34 years old in Generation X group, 4 in-depth interviews with people of 40, ~ 46, ~49 and ~ 55. We really enjoyed this work because we learnt

The Strategy of Zara

2144 words - 9 pages . Procedure and Findings……………………………………………………………7 2.1 SWOT Analysis……………………………………………………………….7 2.2 4Ps Analyze …………………………………………………………………10 3. Conclusions………………………………………………………………………12 References……………………………………………………………………………13 1.0 Introduction 1.1 Purpose As a fast fashion of the global retail market, ZARA is a famous and successful case in the international market. To prove Zara has the prospect of sustainable

Capital Punishment

3542 words - 15 pages to do with only ideally rational killers, although many killers are not rational. • Deferent Effect of Capital Punishment, Incapacitation of the criminal: The fear of being condemned to death is perhaps the greatest deterrent, which keeps an offender away from criminality. Death penalty in case of murder serves as an effective deterrent to remind the murderer about the severity of law towards this heinous crime and this certainly helps in

Related Essays

Gucci Case Essay

933 words - 4 pages technology, and efficient logistics. This system possesses valuable, rare, and non-substitutable characteristics. By developing a loyal supplier base with complexity and product quality control, Gucci cultivated an attribute that gives them a sustainable competitive advantage. Gucci should develop a website and begin using the internet as a distribution channel for its line of products. At the time of the case study, the retail

Gucci History Essay

840 words - 4 pages in the case. However, the hit man had been sloppy in his execution, and the police soon picked up him and several accomplices – and sensationally – Maurizio’s ex-wife, Patrizia, who was said to have ordered the execution. She was eventually convicted and sentenced to 29 years in jail for the crime, and maybe the Fates had finally decided that the Gucci business had suffered enough, for since that time, it has not only survived, but prospered!

Strategic Management Essay

6893 words - 28 pages ?  4. Create: What factors can we create that rivals do not offer, thereby increasing value?    Case Analysis: Gucci Group NV A    1970s - 1994  * Troubles began in 1970s --> internal family feuding   * When founder died in 1983, Maurizo Gucci (son) took control of the company  * Determined to reshape the company's image   * Implements repositioning program   * Hired employees with deep retail experience

Brand Extention Essay

4404 words - 18 pages equity are financial services, over-the-counter drugs or herbal remedies, and high-end sporting equipment. In each of the examples, consumers have significant investments in the products (money, retirement funds, one’s health), but lack the knowledge to undertake a critical evaluation themselves. Selected Case Studies. Weight Watchers – Begun in 1963 as a support group in Brooklyn, New York, Weight Watchers has developed expertise through