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Luxury Industry - Gucci vs Louis Vuitton

Date post:16-Apr-2017
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Characteristics of Luxury Products

Brand Symbolism ExtraordinarinessRarityPrice as an benefitQualityAccess to niche markets

PESTLE Analysis

PoliticalLaw and security processes to be consideredCertification and product formsTaxes to export and import luxury goods

EconomicIndustry not affected by the crisisGrowing market with rising incomesConsumption rising in growing economies

Social Concept of power and superiorityCreation of charities and giving back to the society

PESTLE AnalysisTechnology High weightage given to R&D, new technologies of production and raw material sourcing Promotion of the brand

LegalPatentsIntellectual property for creation of sign and symbol of the brandPlacement of storesDcor and organization of the store

EnvironmentLuxury goods do not adopt their products and trends to the new aspects of the environment

Threat of new entrants : HIGHBrand loyaltyScale EconomiesCapital RequirementPotential Retaliation from existing brands/companies

Threat of substitutes : MODERATEPrice of substitutesQuality of substitutesSwitching costs to customers

Buyers Bargaining Power : LOWNumber of buyers relative to suppliersLevel of dependence on a buyerSwitching costsPossibility of buyers vertical integration

Suppliers Bargaining Power : MODERATENumber of suppliers relative to buyersLevel of dependence on a supplierSwitching CostsPossibility of suppliers vertical integrationEffective Substitutes

Rivalry among existing companies : HIGHCompetitive StructureDemand ConditionExit Barriers

House of Gucci is an Italian fashion label

Known for Accessories and Clothing

Since 1921

Family repercussions Quickly grew out of it Now owned by Pinault-Printemps-Redoute (PPR)

Ranked 8th by Forbes

Brand value: $9.45 billion



Widely Available (DoS)Unaffected by economic crisisDiversified and wide product rangePublic relation WEAKNESS

Instability of managementFinancial base is weak and alarmingMass producer of prestigious goods


Mergers & acquisitionsSustainabilityDiversification in Wine and SpiritsEmerging luxury markets in Asia THREATS

CounterfeitingStrong Competition

French fashion company

Since 1854

Most Valuable Luxury Brand

Known for Leather Goods

Monogram and Damier canvases

Department stores and boutiques

Brand value:$23.58 billion


Brand nameExperiencePremium qualityPublic relation WEAKNESS

DiversificationConflict of interestSensitive to economy


Mergers & acquisitionsNew consumer trendsEmerging markets - Asia THREATS

CompetitionConsumer taste change



* Fragrance (G)

*Leather goods (LV) * Leather goods (G) QUESTION MARK

* Watches (LV)

* Jewellery (G)

CASH COW *Fashion (LV) *Accessories (G)

* Fragrance (LV) * Jewellery (LV) * Ready to wear (G) * Shoes (G) DOG * Wines & Spirits (LV)

* Watches (G)


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