Company Analysis

Introduction and legal Issues: Abhinav Sharma Political issues: Esteban Hernandez Corporate Social responsibility: Anthony Ramos and Van ly

Market Selection and entry mode: Danielle Didear Firm Strategy: Nik Jain and Joann Mester

Introduction & History

Established in 1921 by Guccio Gucci in Florence Italy. Made famous during the 1950s by celebrities and wealthy elite around the world. Went public in 1982 and merged with PinaultPrintemps-Redoute (PPR). Legacy of over 90 years.

Introduction & History (continued)

Operates as a multi-brand luxury goods company headed by president and CEO Patrizio Di Marco Products include ready-to-wear, handbags, luggage, small leather goods, shoes, timepieces, jewelry, ties and scarves, eyewear, perfumes, cosmetics, and skincare. Operates a network of retail stores in various markets worldwide

SWOT ANALYSIS (Strengths)

Gucci is a globally recognized multi brand luxury goods company Derives over 50% of its revenues from outside of Europe Aggressive marketing and operational strategies Strong presence in the international market Continuous introduction of new products from season to season

SWOT ANALYSIS (Weaknesses)

Unstable management and the loss of Weak profitability from other brands Effective brand protection strategy to fight against Counterfeiting which has highly affected their profits.

SWOT ANALYSIS (Opportunity)

High potential growth in emerging economies e.g. BRIC countries Consolidation of other brands Vertical Integration

SWOT ANALYSIS (Threats)

Competitive pressures Foreign currency risk Global recession and the resultant downturn in consumer spending

Legal Issues
Lawsuit against Guess Dispute over stylized G logo Injunction against Guess from using the letter G in any of their products Lawsuit settled for $4.66 million in favor of Gucci

Political Issues
Differences in the political system of the countries, e.g. China and U.S.A Politics of taxation are incredibly different from one country to another Creation of an investment idea called variable interest entity (VIE)

Corporate Social Responsibility - Intro

Work based on an idea called "sustainable value" Takes into account both the interests of employees and economic, financial, social, and environmental interests Promotes this culture to the entire Gucci system In line with the "Universal Declaration of Human Rights"

Corporate Social Responsibility UNICEF Partnership

Here's the Gucci/UNICEF partnership video:

Corporate Social Responsibility - Gucci Philanthropy Timeline

Corporate Social Responsibility Sweatshop Conditions Allegations

Five former Gucci employees claim sweatshop-like conditions in the Gucci store in Shenzhen, China Stand for 12 hours a day Bathroom breaks limited to 5 minutes Uncompensated overtime Missing inventory deducted off pay, despite being insured

Corporate Social Responsibility Sweatshop Conditions Allegations (Continued)

In response, Gucci took measures to address the dispute Investigation into the claims Dismissal of the store managers Improving communications and training Hired an external consultant to review Gucci's store management in China Still, the response has largely been met with skepticism by the Chinese public

Market Selection & Entry Mode

emerging and developing economies ex: Brazil, China, and India growing GDP opportunities for new concepts i.e. new all mens store direct exporting and foreign direct investments (website and foreign stores)

Market Selection & Entry Mode

Gucci sees technology as an opportunity launched e-commerce in 2002 www.gucci.com continuously improving on Gucci website by adding updates, ready-to-wear outfits, and Facebook and Twitter links to connect to technology is a means to reach consumers around the world

Market Selection & Entry Mode

m-commerce launched in June 2012 select Gucci stores will have Samsung transparent LCD installed showing products and also what is behind them that will be targeted to the demographic in the area in-store associates equipped with iPads with customer details and product details customers will have the option of paper receipt or e-mail receipt once e-mail is in the database it opens a new mode of marketing

Suggestions (Political and Legal)

Take into consideration the type of economy they are planning to enter Become aware of the legal boundaries of the countries where they plan to invest in Protect themselves and the interest of the potential foreign market

Suggestions (Corporate Social Responsibility)

Take the initiative to make certain its employees are not abused Develop guidelines to be followed by all of its stores in countries which it operates in must make changes in order to maintain its reputation and transparency to the public and to avoid public backlash to their company

Suggestion (Market Selection & Entry mode)

Infiltrate emerging economies with growing GDP Use of technologies such as e-commerce and m-commerce

Suggestion (Firm Strategy)

Solve disagreements and issues internally focus on Gucci brand products because in the past Gucci has incurred weak profitability from other brands Hire more professionals to help them make safer foreign direct investments decisions to cut down on foreign currency risk

Questions, Comments, Criticisms?