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Luxury Industry

Luxury Industry - Gucci vs Louis Vuitton

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Page 1: Luxury Industry - Gucci vs Louis Vuitton

LuxuryIndustry

Page 2: Luxury Industry - Gucci vs Louis Vuitton

Characteristics of Luxury Products

Brand Symbolism Extraordinariness

RarityPrice as an benefit

QualityAccess to niche markets

Page 3: Luxury Industry - Gucci vs Louis Vuitton

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

Page 4: Luxury Industry - Gucci vs Louis Vuitton

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

Page 5: Luxury Industry - Gucci vs Louis Vuitton
Page 6: Luxury Industry - Gucci vs Louis Vuitton

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

Page 7: Luxury Industry - Gucci vs Louis Vuitton

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

Page 8: Luxury Industry - Gucci vs Louis Vuitton

• 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

Page 9: Luxury Industry - Gucci vs Louis Vuitton

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

Page 10: Luxury Industry - Gucci vs Louis Vuitton

• 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

Page 11: Luxury Industry - Gucci vs Louis Vuitton

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

Page 12: Luxury Industry - Gucci vs Louis Vuitton

VS

Page 13: Luxury Industry - Gucci vs Louis Vuitton

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)

Page 14: Luxury Industry - Gucci vs Louis Vuitton

ThankYou!