about Gucci in 2000.

2. ♤ Potential Entrants
mainly new designers who start their
own brand on their own
less significant
☢Industry Rivalry
High but not on price
+ quality and image perception
+ability to attract talent
♢ Substitutes
no real substitutes for the luxury
goods, as it is not a necessary
need.
♡Buyers
- The super-rich
- The middle-market
customers, who
selectively trade-up
to higher levels of
quality, taste and
aspiration
♧Suppliers
The bargaining power
of the suppliers
depends on the
segment

5. And the best
positioned
player is…

6. Gucci Case

7. ✈ 1990:
-the poorest time in the
company's history, came close to
bankruptcy
-Maurizio Gucci was chairman
-the Gucci name had lost much of
its mystique
- many Gucci products had
flooded department stores and
boutiques

8. 1994
- Gucci's image revision
- Domenico de Sole became
COO. Tom Ford was creative
director.
-Tom Ford received two
prestigious awards for
designing Gucci's ready-to-wear
fashions and footwear.
-Sales growth has been
strongest in the United
States and Asia, where
consumers followed
American trends.
-The company soon
recovered profitability and
turned a $17million profit.

9. ☺2000
- No. 3 global luxury goods group
- Acquired YSL & Sergio Rossi
- group operating income rose
92 percent, to $133 million, on a
101 percent increase in revenue,
to $615 million
- LVMH lost a battle for control
of Gucci, after Gucci thwarted
overtures by the LVMH owner
Bernard Arnault and sold a
controlling stake to the big
French retail group controlled by
the French investor Francois
Pinault, a rival of Mr. Arnault

10. Gucci unique competitive
advantage
“the most dangerous thing in business is not making
decisions. I learned from Maurizio Gucci- he couldn’t
decide anything” - Domenico de Sole
$ Management
- Flat structure
- Impeccable execution of the strategy
- Typical US incentives for employees
$ Manufacturing
- Regain the confidence and assessing their
quality
- Incentive: offer to pay upfront future wages
- Productivity
- Former employees
- Technology

11. $ Marketing
- Product mix
+ brand should be consistent
+ convey the right image
+ focus on quality
+ commercial considerations
+ new look
+ pipeline of new product
- Pricing
reprice every single item (mainly
downwards)
-Promotion
+ two Milan ready-to-wear show in 1995
+ public personalities: Madonna, Tina
Tuner, Nicole Kidman
+ massive global advertising campaign
- Distribution
+ control the distribution channel
+ Gucci closed or bought back all
franchises and licensees
+ promoted directly operated
stores (DOS)
+ redesigned simultaneously

12. Sergio Rossi
&
Yves Saint
Laurent

13. This marked the turning point for
Gucci
- from a single brand company
towards a luxury goods
conglomerate
- 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.)

14. Presented
by
F2
Group