Gucci case

Download Gucci case

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about Gucci in 2000.

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  • 1. Potential Entrantsmainly new designers who start theirown brand on their ownless significantIndustry RivalryHigh but not on price+ quality and image perception+ability to attract talent Substitutesno real substitutes for the luxurygoods, as it is not a necessaryneed.Buyers- The super-rich- The middle-marketcustomers, whoselectively trade-upto higher levels ofquality, taste andaspirationSuppliersThe bargaining powerof the suppliersdepends on thesegment

2. And the bestpositionedplayer is 3. Gucci Case 4. 1990:-the poorest time in thecompany's history, came close tobankruptcy-Maurizio Gucci was chairman-the Gucci name had lost much ofits mystique- many Gucci products hadflooded department stores andboutiques 5. 1994- Gucci's image revision- Domenico de Sole becameCOO. Tom Ford was creativedirector.-Tom Ford received twoprestigious awards fordesigning Gucci's ready-to-wearfashions and footwear.-Sales growth has beenstrongest in the UnitedStates and Asia, whereconsumers followedAmerican trends.-The company soonrecovered profitability andturned a $17million profit. 6. 2000- No. 3 global luxury goods group- Acquired YSL & Sergio Rossi- group operating income rose92 percent, to $133 million, on a101 percent increase in revenue,to $615 million- LVMH lost a battle for controlof Gucci, after Gucci thwartedovertures by the LVMH ownerBernard Arnault and sold acontrolling stake to the bigFrench retail group controlled bythe French investor FrancoisPinault, a rival of Mr. Arnault 7. Gucci unique competitiveadvantagethe most dangerous thing in business is not makingdecisions. I learned from Maurizio Gucci- he couldntdecide anything - Domenico de Sole$ Management- Flat structure- Impeccable execution of the strategy- Typical US incentives for employees$ Manufacturing- Regain the confidence and assessing theirquality- Incentive: offer to pay upfront future wages- Productivity- Former employees- Technology 8. $ Marketing- Product mix+ brand should be consistent+ convey the right image+ focus on quality+ commercial considerations+ new look+ pipeline of new product- Pricingreprice every single item (mainlydownwards)-Promotion+ two Milan ready-to-wear show in 1995+ public personalities: Madonna, TinaTuner, Nicole Kidman+ massive global advertising campaign- Distribution+ control the distribution channel+ Gucci closed or bought back allfranchises and licensees+ promoted directly operatedstores (DOS)+ redesigned simultaneously 9. Sergio Rossi&Yves SaintLaurent 10. This marked the turning point forGucci- from a single brand companytowards a luxury goodsconglomerate- both on the multi product axis(leather, fashion, cosmetics,fragrances, watches and jewelery)and the multi brand axis (Gucci,Sergio Rossi, Bottega Veneta, YSL,Boucheron, Bedat, etc.) 11. PresentedbyF2Group