Analyse du groupe Gucci (document en anglais)

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The Marketing Strategies of Gucci

The House of Gucci, or simply Gucci is one of the more established premium fashion brands in the world. Its success depends largely on its effective marketing strategies.

ByGwendolyn Cuizon

on Mar 6, 2009

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The House of Gucci or simply Gucci is an Italian fashion icon company. Founded by Guccio Gucci in Florence, 1906, it is now the most famous luxury brand in the world.

Gucci earned US $ 7 billion in revenues in 2006. It ranks 46th in Business Week’s Top 100 Brands. It now has 425 stores worldwide and a number of franchisees and high-end department stores that carry its brands.

Gucci, being one of the premium brands, has to contend with a number of factors both internal and external in order to maintain its current status. The following is the analysis on Gucci’s strengths, weaknesses, opportunities and threats.

SWOT Analysis of Gucci

Strengths

The strength of Gucci is in its established, very strong brand image and international presence. Gucci has also the ability to control its distribution channels. This is part of Gucci’s defensive strategy in the chain value to capture the value added instead of giving it to the middlemen such as suppliers and retailers.

The company has also increased the number of their Directly Operated Stores (DOS) as part of the defensive strategy of taking more control of the distribution process. The 2003 figure showed that DOS accounted for 61.3% of revenues compared to a much lower 32.5% in 1999.

Its aggressive strategy accomplished through diversification and communication is also another of Gucci’s strengths. Gucci changed its strategy of carrying a single brand to branching out to a multi brand group. This strategy is also adopted by other conglomerates such as Louis Vuitton and Prada.

Some luxury companies use the strategy of focusing only on one brand and add other business segments such as what Armani, Polo Ralph Lauren, and Versace did.

This strategy is done in order to allow the positioning of the brand in the industry to differ depending on the number of brands and the number of business segments the company wants to compete in. This is the idea behind focus (mono brand) versus diversification (multi-brand). Gucci Group has more than 10 brands, including Gucci, Yves Saint Laurent, YSL Beauté and Sergio Rossi.

Weaknesses

The weaknesses of Gucci include instability in management and financial base. The instability of its management can affect the group’s corporate strategy and vision.

The financial base is weak and alarming, with a long term debt increase from $17 million in 1998 to $143 million in 1999 and to $1.3 billion in 2003. Some brands in

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