Post on 08-Jul-2015
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G U C C I
Historically, fashion was viewed like movies. We made it a business.
Domenico De sole – CEO of Gucci Group
HISTORY
1923: Florence, leather goods
1930s: Mussolini, new material,
canvas, producing small leather goods,
wallets and belts
1953-1973: more shops in USA ,Europe,
Japan
1970s: an internal crisis wracked the
firm 1980s: block venture and
lawsuits flew back and forth
HISTORY
WHAT DID DE SOLE DO?
Fake Gucci bags
900 employees
600 points of sale
Too high prices
Disorganized production and nightmare delivery
No clarity to the direction of the company
No cost controls
No liquidity
Conservative women
BEFORE DE SOLE AFTER DE SOLE
About 15,000 products
He fired 150 employees and hired new manager
194 points of sale
Lowering prices on average by 30%
Reorganization of production and distribution
Quick decisions with discipline and focus
Cost control
High liquidity
Modern, urban woman
Quality
Price
COMPETITIVE
POSITIONING
Industry Rivalry:
(high)
Chanel, Hermés,Louis Vitton,Prada
Substitutes Competition:
(high)
Luxury but not necessary
Suppliers
(low)
They rely on different suppliers
Threat of Entry:
(high)
Various of brand , different trend every season
Buyers :
(high)
Customers are easily switch their choices
It depends on the relevance of distributors
PORTER’S
FORCES
Complementarities:
(low)Entertainment
2. WHICH CRITICAL MOVES ALLOWED DE SOLE TO
REPOSITION GUCCI?
OLD TARGET
NEW TARGET
Highly classic conception of women’s role in the society40-50 y.oUpper classFamily ladyMulti-brands loyalNot price conscious
Upper class30-50 y.oSingles working womenReaders of fashion magazineChange every season
IMAGE MAKEOVER
DE SOLE - FORD
PARTNERSHIP
The two men ran Gucci together, De Sole in managerial terms and Ford in
creative ones. Trust and mutual respect were key factors in
the Gucci turnaround.
2. WHICH CRITICAL MOVES ALLOWED DE SOLE
TO REPOSITION GUCCI?
Distribution
DOS (from 65 to 126)DOS
renovations,“clean, modern look”
Closure of Duty free store
As opposed to previous franchising
and license agreement strategy
PRICINGLowered priced by 30% to be on the same level as Prada and Vuitton, to target fashionable young women
MANUFACTURING
• Keep only best manufacturers and cut off the rest
• Provide selected suppliers with technical and financial support
• Outsource 95% of leather goods, keep
• only exotic skins in-house
• System based on 3 pillars: Skilled artisans, advanced technology and efficient logistics
ADVERTISING
• Doubled from 1993 to 1994
• expected to spend 250 million in 2000
• “Create an arresting image of the world you want to be a part of”
• Tom Ford’s star status
IMPROVED COMMUNICATION WITHIN THE COMPANYManage Gucci as a coherent whole. The company used to operate on its own and no informationwas shared.
3. WHAT DO YOU THINK ABOUT THE ACQUISITION
OF YSL AND SERGIO ROSSI?
“If you really are an exclusive brand, you can’t grow beyond a certain point. Nobody knows where that point is, but there is a limit to the number of handbags you can sell for $1000. That’s the bottom line.”
(De Sole)
1999 2000 2001 2002
21% 22.5% 22.5% 24.3%
OPERATING MARGIN
4. HOW IS THE CURRENT COMPETITIVE
POSITION OF GUCCI GROUP?
4,2 billion (Business week)
41° “The Global 100 Brands” (interbrand)
278 directly operated stores
$ 12,1 billion USD with a sales of $ 4,7
billion USD
38° most valuable brand ( Forbes)
2008 2009 2013
The Biggest-Selling Italian Brand !
1999 2003 2008 2012
1.2 billion revenues 3.1 billion revenues 4.2 billion revenues 4.7 billion revenues
INCREASE OF REVENUES
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
5000000
1998 2003 2008 2012
Revenues
TRADITIONAL INNOVATIVE
LUXURY
AFFORDABILITY
CURRENT
COMPETITIVE
POSITIONING
Thank you for your
attention!Xueyang Chen Giuseppe
Origo
Stefania Stefanizzi
Marika Torcitto
Maria Paula Varela