Diesel Analysis
Strategic Management I Pere Clavero
Framework Case Analysis
Organization Processes & Culture • In 1997: “Rosso” acquired a VP for the “Retail & Intl” dept.; with 10 years of experience within the FMCG multinational industry, the new VP was given the responsibility for heading the Italian market.
• In 2000: Former VP from LEVI’S joined the company as the VP Marketing & Sales. A great contribution for the line development process which was much more structured after the VP’s arrival and helped the Company to further develop collections that were more in tune with the evolution of the market. The new arrivals of Professionals were acquired to define and implement existing, new and advanced (sales) strategies.
Managing 5 product lines in One Central Organization
Over time five different product lines proved to be too complex as smaller lines were dedicated less attention, therefore the concept didn’t result since potential to further develop growth was not being recognized/detected. (Problem No. 1). Good examples are the Diesel’s Kids- and Sports line which struggled to grow.
• In 1999: The Company decided to spin off Diesel Kids and Diesel Sports however, Product Design and Communications were kept centralized in Molvena/IT, this to ensure Brand image.
• From 1999 to 2005: The CEO of Diesel Kids decided to distribute through independent Distributors rather than through Diesel Subsidiaries, which increased total revenue from EUR 3.5 million to EUR 50 million.
Distribution • It is very common within the Luxury Goods industry, to open so-called “Flagship stores” without thinking about long-term planning or profitability. In this approach, it is not necessary to break-even, it is just aimed to promote the Brand hence these stores are used as Marketing expenditure tools which is the reasoning behind Diesel’s first store openings in respectively New York, London
Framework Case Analysis
Organization Processes & Culture • In 1997: “Rosso” acquired a VP for the “Retail & Intl” dept.; with 10 years of experience within the FMCG multinational industry, the new VP was given the responsibility for heading the Italian market.
• In 2000: Former VP from LEVI’S joined the company as the VP Marketing & Sales. A great contribution for the line development process which was much more structured after the VP’s arrival and helped the Company to further develop collections that were more in tune with the evolution of the market. The new arrivals of Professionals were acquired to define and implement existing, new and advanced (sales) strategies.
Managing 5 product lines in One Central Organization
Over time five different product lines proved to be too complex as smaller lines were dedicated less attention, therefore the concept didn’t result since potential to further develop growth was not being recognized/detected. (Problem No. 1). Good examples are the Diesel’s Kids- and Sports line which struggled to grow.
• In 1999: The Company decided to spin off Diesel Kids and Diesel Sports however, Product Design and Communications were kept centralized in Molvena/IT, this to ensure Brand image.
• From 1999 to 2005: The CEO of Diesel Kids decided to distribute through independent Distributors rather than through Diesel Subsidiaries, which increased total revenue from EUR 3.5 million to EUR 50 million.
Distribution • It is very common within the Luxury Goods industry, to open so-called “Flagship stores” without thinking about long-term planning or profitability. In this approach, it is not necessary to break-even, it is just aimed to promote the Brand hence these stores are used as Marketing expenditure tools which is the reasoning behind Diesel’s first store openings in respectively New York, London