MGB Group 4- Infinity

CEO Mehul Dhorda

Harsh Nahata

Swetha Thota

Harshayu Desai

Lata Phophalia

Jash Trivedi

MANAGERIAL ECONOMICS CASE STUDY- MICHAEL KORS

Michael Kors Background
Its a high-end luxury brand set up by Michael Kors who launched his first womenswear
collection in 1981. The progress made thereafter was fast paced and it soon captured the high end
market. Despite various hurdles faced by Michael Kors in expanding his business, he managed to
bounce back by launching exclusive range of products. They went public in 2011 and since then
have been growing at a constant rate. They have outclassed rivals in sales and currently plan to
expand to various geographical locations and into different departments such as menswear,
watches and jewelry. To capture the market from their rivals, they have been aggressively
discounting their products thus substantially increasing their revenues and profits.
The Problem?

Should they celebrate their good generation of revenues and profit?

How to re-build investors confidence?

Concern over long term Marketing strategies?

Analysis of the problem

In every circumstance of business decision making, the entity relies on 2 kinds of analysis.
1. Ex-post analysis

2) Ex ante analysis

Ex-post is a method where the decision is taken based on past trends and events. On the other
hand, ex-ante refers to taking decisions based on future projections.
In the given case let us call whether to celebrate the rise in revenue and profit? as the decision
making event per se. This decision is purely based on the given statistics and data. The case
question seems to be open ended. Our inference is that celebration refers to being happy with
what one has achieved. Should Michael Kors be happy about its recurring success for 3 years
and increase in revenues and profits? Yes. It is important that the company celebrates its
performance over the past 3 years since issuing the IPO. The employees should be motivated and
be given a pat on their backs for making this manifold growth of the company possible. This
celebration should also include other stakeholders.

SWOT ANALYSIS

Celebration alternatives

ESOP - One of the most common and effective way of a business celebration is to share
it with their employees as they have played a major part in their success story. Hence,
Michael Kors can give ESOPs to its employees as a gesture of appreciation for their hard
work in turn motivating them for the near future.

Success party - Michael Kors can throw a grand success party in cohort with their
traditional charity party which they have been doing to cater to their Corporate social
responsibility. This can be taken in a two fold aspect; first with all the major corporate
players from the fashion industry present at the party, Michael Kors can attract them and
persuade them to lead their newly launched sections from their expansion, and secondly
they can also gain the confidence and the trust of the shareholders.

Expansion - With its tremendous growth and the healthy current financial scenario,
Michael Kors can look forward to expand its stores to regions beyond North America and
Europe, as they plan to as this will help them generate a bigger customer base.

Conclusion:
After analyzing different aspects of this case based on past performance and outperforming
themselves quarter after quarter, we believe Michael Kors should celebrate their success. But we
suggest that they should re-consider their aggressive marketing strategies as we believe that these
strategies may harm their brand value in the long run and they might lose on their established
markets.