Developing Strategic Capability Through Acquisition
Strategic Acquisition in Luxury Globalization
Abstract
The strategic capability of a firm or an industry is about identifying, developing and using its unique resources and core competences to gain competitive advantages in specific market to achieve results. Luxury is as a unique sector and the “allure and exclusivity” are well sought after by consumers, heavily imitated by competitors. The six unique features and competency (heritage, quality, exclusivity, symbolism, aesthetics and price) of luxury brand has led to many successful brand stories and resulting high financial performances. Most importantly, it distinguished the elite few from the masses.
Globalization has almost become ‘a must” for any profitable luxury brand. Mature markets such as Europe, North America and Japan are at the point of saturation, showing slow down in annual growth. Luxury business models are distinctively unique and cannot be replicated over a short period of years. It takes years and years to develop luxury brands with strong attributes such as know-how and heritage. In addition to that, every successful luxury brand should have unique brand story and values that cannot be copied by another brand. In view of globalization, desired brand exclusivity also limits excessive expansion into more market as it may lead to the mass consumption of these luxury brands. So how does one balance exclusivity and profitability in globalization? What are the practical global strategies for luxury? Is exclusivity still relevant in present context?
For decades, acquisition of family owned luxury brands is one of key strategy adopted by luxury conglomerates to diverse their business portfolio, to strengthen control of distribution channels, and to adapt to the emerging market. Recent trends suggest that such acquisition pattern now has expanded into other sectors such as luxury hotels, online retailer and even premium lifestyle brands in domestic markets. What would be the strategy behind these
Abstract
The strategic capability of a firm or an industry is about identifying, developing and using its unique resources and core competences to gain competitive advantages in specific market to achieve results. Luxury is as a unique sector and the “allure and exclusivity” are well sought after by consumers, heavily imitated by competitors. The six unique features and competency (heritage, quality, exclusivity, symbolism, aesthetics and price) of luxury brand has led to many successful brand stories and resulting high financial performances. Most importantly, it distinguished the elite few from the masses.
Globalization has almost become ‘a must” for any profitable luxury brand. Mature markets such as Europe, North America and Japan are at the point of saturation, showing slow down in annual growth. Luxury business models are distinctively unique and cannot be replicated over a short period of years. It takes years and years to develop luxury brands with strong attributes such as know-how and heritage. In addition to that, every successful luxury brand should have unique brand story and values that cannot be copied by another brand. In view of globalization, desired brand exclusivity also limits excessive expansion into more market as it may lead to the mass consumption of these luxury brands. So how does one balance exclusivity and profitability in globalization? What are the practical global strategies for luxury? Is exclusivity still relevant in present context?
For decades, acquisition of family owned luxury brands is one of key strategy adopted by luxury conglomerates to diverse their business portfolio, to strengthen control of distribution channels, and to adapt to the emerging market. Recent trends suggest that such acquisition pattern now has expanded into other sectors such as luxury hotels, online retailer and even premium lifestyle brands in domestic markets. What would be the strategy behind these