Gucci Group
Technology and Innovation Strategy
Individual Assignment: “Gucci Group” (11/06/2012)
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Matteo Berzoini
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1. Provide a competitive positioning of the luxury industry back in 1990. How was Gucci positioned?
2. Which critical moves allowed De Sole to reposition Gucci?
3. What do you think about the acquisition of YSL and Sergio Rossi?
1. Market Worth and Composition: By 1999, the worldwide luxury goods market was worth $60 billion, with a sales growth rate of 6% per year. Overall, the sector was mainly composed by 35 companies, which accounted for about 60% of the market, plus a “competitive fringe” of smaller companies. Among the top players, six of them had revenues over $1 billion, the majority (15 to 20) had revenues from $500 million to 1 billion and the rest lied within the $100 million to $500 million dollar range. Products: The typical portfolio of a luxury goods company comprised seven main product categories: leather goods, footwear, high-end apparel, silks, watches, jewelry, perfumes and cosmetics. Most of these luxury companies were pursuing a differentiation strategy, by proposing different types of products that shared the same spirit of luxury and exclusivity with the brand, but tended to focused on just two or three of the categories mentioned above. Target clientele: The typical consumer of luxury goods ranges from wealthy and discerning women aged around 30-50 to younger (especially Asian and Japanese) girls, beginning around the age of 25. Ownership structure: Most of the luxury companies in the industry were Italian or French family-owned, single-brand firms (like Gucci, Armani, Prada, Chanel and Hermès). Louis Vuitton, which in the 1990s was already owned by the LVMH Group, represented one big exception. LVMH was a multinational conglomerate with a wide product portfolio, which included, aside from leather goods and
Individual Assignment: “Gucci Group” (11/06/2012)
-------------------------------------------------
Matteo Berzoini
-------------------------------------------------
1. Provide a competitive positioning of the luxury industry back in 1990. How was Gucci positioned?
2. Which critical moves allowed De Sole to reposition Gucci?
3. What do you think about the acquisition of YSL and Sergio Rossi?
1. Market Worth and Composition: By 1999, the worldwide luxury goods market was worth $60 billion, with a sales growth rate of 6% per year. Overall, the sector was mainly composed by 35 companies, which accounted for about 60% of the market, plus a “competitive fringe” of smaller companies. Among the top players, six of them had revenues over $1 billion, the majority (15 to 20) had revenues from $500 million to 1 billion and the rest lied within the $100 million to $500 million dollar range. Products: The typical portfolio of a luxury goods company comprised seven main product categories: leather goods, footwear, high-end apparel, silks, watches, jewelry, perfumes and cosmetics. Most of these luxury companies were pursuing a differentiation strategy, by proposing different types of products that shared the same spirit of luxury and exclusivity with the brand, but tended to focused on just two or three of the categories mentioned above. Target clientele: The typical consumer of luxury goods ranges from wealthy and discerning women aged around 30-50 to younger (especially Asian and Japanese) girls, beginning around the age of 25. Ownership structure: Most of the luxury companies in the industry were Italian or French family-owned, single-brand firms (like Gucci, Armani, Prada, Chanel and Hermès). Louis Vuitton, which in the 1990s was already owned by the LVMH Group, represented one big exception. LVMH was a multinational conglomerate with a wide product portfolio, which included, aside from leather goods and