Luxury Industry - Gucci vs Louis Vuitton
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Transcript of Luxury Industry - Gucci vs Louis Vuitton
LuxuryIndustry
Characteristics of Luxury Products
Brand Symbolism Extraordinariness
RarityPrice as an benefit
QualityAccess to niche markets
PESTLE AnalysisPolitical
Law and security processes to be consideredCertification and product forms
Taxes to export and import luxury goods
EconomicIndustry not affected by the crisis
Growing market with rising incomesConsumption rising in growing economies
Social Concept of power and superiority
Creation of charities and giving back to the society
PESTLE AnalysisTechnology
High weightage given to R&D, new technologies of production and raw material sourcing Promotion of the brand
LegalPatents
Intellectual property for creation of sign and symbol of the brandPlacement of stores
Décor and organization of the store
EnvironmentLuxury goods do not adopt their products and trends to the new aspects of the environment
Threat of new entrants : HIGHBrand loyalty
Scale EconomiesCapital Requirement
Potential Retaliation from existing brands/companies
Threat of substitutes : MODERATEPrice of substitutes
Quality of substitutesSwitching costs to customers
Buyers Bargaining Power : LOWNumber of buyers relative to suppliers
Level of dependence on a buyerSwitching costs
Possibility of buyers vertical integration
Suppliers Bargaining Power : MODERATENumber of suppliers relative to buyers
Level of dependence on a supplierSwitching Costs
Possibility of suppliers vertical integrationEffective Substitutes
Rivalry among existing companies : HIGHCompetitive Structure
Demand ConditionExit Barriers
• House of Gucci is an Italian fashion label
• Known for Accessories and Clothing
• Since 1921
• Family repercussions – Quickly grew out of it – Now owned by Pinault-Printemps-Redoute (PPR)
• Ranked 8th by Forbes
• Brand value: $9.45 billion
j
STRENGTH
• Widely Available (DoS)• Unaffected by economic crisis• Diversified and wide product
range• Public relation
WEAKNESS
• Instability of management• Financial base is weak and
alarming• Mass producer of prestigious
goods
OPPORTUNITIES
• Mergers & acquisitions• Sustainability• Diversification in Wine and
Spirits• Emerging luxury markets in
Asia
THREATS
• Counterfeiting• Strong Competition
• French fashion company
• Since 1854
• Most Valuable Luxury Brand
• Known for Leather Goods
• Monogram and Damier canvases
• Department stores and boutiques
• Brand value:$23.58 billion
STRENGTH
• Brand name• Experience• Premium quality• Public relation
WEAKNESS
• Diversification• Conflict of interest• Sensitive to economy
OPPORTUNITIES
• Mergers & acquisitions• New consumer trends• Emerging markets - Asia
THREATS
• Competition• Consumer taste change
VS
STAR
* Fragrance (G)
*Leather goods (LV) * Leather goods (G)
QUESTION MARK
* Watches (LV)
* Jewellery (G)
CASH COW *Fashion (LV) *Accessories (G)
* Fragrance (LV) * Jewellery (LV) * Ready to wear (G) * Shoes (G)
DOG * Wines & Spirits (LV)
* Watches (G)
ThankYou!