GUCCI Harvard Case Solution & Analysis

GUCCI

As a Senior Manager for GUCCI, the main focus is to excel the growth for the next five years, the strategic approach that should be followed to increase the growth rate is to focus on ‘growth of the sales volume’ rather than the exclusivity.

GUCCI is a prominent &a supreme brand since its initial launch and introduction in 1921 as a manufacturer of goods particularly leather and sustained to come-across the desires and the demands of the individuals who are highly fashion-conscious. It’s a part of a very well-known group “Kering”, which is originally a luxury group of Paris. The growths in 2017 and 2018 were reported marginal but in 2018, the percentage of sales growth was 49 and the revenue generated was about €1.9billion higher than the last year’s sales growth. It is ranked in the top 50 international brands list, the ranking order was generated by the Inter-brand in 2015. Annual revenue is about €2.2bn. Approximately, there are 539 direct operatingGUCCI stores present worldwide but their products are also sold via other provisions and suppliers specifically through renowned stores of large departments. As a concerned brand, Gucci is distributing outstanding development, substantiallybeyond the average of theproduction as anoutcome of gradualdevelopmentaccomplishedthrough the persistent optimization and thedistinction of its trade model rather than trusting on the development of its wholesaleoutline or category extension.

The Brand should follow the “b strategic” or “focused sales volume” approach of growth because this way, they can sustain their market share and their potential customers. Now, the question arises why is this strategy important? This is important because the main competitor of GUCCI, which is, Louis Vuitton follows the strategy of exclusivity for its products and to maintain their distribution in the global market. But GUCCI has its outlet stores as well as whole sale business and there is more opportunity to expand their luxurious products more than LV’s expansion.

FundamentalStatistics
€6,211M in profits
€2,124M in periodic operating income
11,543 average number of employees (fulltime)
529* directly operated stores

(Kering, 2017 )

GUCCI Harvard Case Solution & Analysis

Following are the ways from which,GUCCI can increase the growth of the sales volume; expansion in the number of potential consumers by promoting the brand and its specifications. Conversion of the non-users through entry in a new market segment where other brands are already effective and influential. As a senior manager, one should follow new tactics to attract the competitors’ customers like Louis Vuitton. Manufacturing of the products according to the usage need and rate.The main reason of the emergence of the luxury fashion products is the demand of high concerns of customers with fashion and the high investment. GUCCI, from the beginning, struck to the concepts of traditional and fruitful luxuries and carousing the delivery of good quality rather than quantities.

The essential points of consideration to pull from the subject of GUCCIinclude the following aspects,the workforce, structures, approaches& themethods goes a long way in the constructionof GUCCI’s leadinglocus in the globalmarketplace of fashion and luxury goods.In themeantime, it is tooessential to consider that the broadening of thegoods& products into the diverse brands also facilitates in terms of expanding the overallselection& range of the business.................

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