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Market Analysis of Luxury Industry
Case of Prada GroupLi Wenwen (I34030)
Outline
I. Industry Background and Trends
II.Prada Group Financial Statements
III.Prada Group Brands’ Analysis
IV.CompetitorsV.Challenges and Chances
What is Luxury goods?
Luxury good make up a larger proportion of consumption as income rises.
Characteristics:• Scarcity, (natural or artificial)• High price • Recognition of distinguished
quality
Global luxury market nine segments
Luxury Goods Worldwide Market Study | Bain & Company, Inc.
Luxury-spending trends 2014
Personal Luxury Goods
Overview• Facts:
70 countries;
556 directly-operated stores• Brands:
Prada; Miumiu;
Church’s; Car Shoe
• Prada was founded in 1913 by Mario Prada in Milan.
Financial Statements
Incom
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Incom
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Bala
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heet
Assets
Bala
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heet L
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Cash Flow
Cash Flow
Brands Analysis
Miu Miu unveiled 12 new DOS covering Far and Middle East, Europe, Japan and US and reaching a total number of 162 at July 31, 2014. At the same time the brand continued investing resources in the communication activities to enhancing its identity.
Miumiu- Total Net Sales (€mn)-9 months
Strategies
Competitors
Ratio AnalysisLvmh Moet Hennessy Louis Vui (MC) VS. Prada S.P.A.(1913)
LVMH: More than 50 brands. Such as LV, Dior, Givenchy, Marc Jacobs, Bvlgari 1700 stores
Challenges and Chances
Risk factors regarding the international luxury goods market
• General state of the economy and international environment.
• Protection of IPR• Brand image and recognition• Ability to anticipate trends and
respond to the changing of customer preferences
Risks for Prada Group
• Exchange rate fluctuations• Importance of key personnel• Outsourcing of manufacturing
activities• Liquidity risk• Legal and regulatory risks
Gucci shoulder bag 82% +LV handbag 65% + Grey Market Chanel: Cut Price in China Price Difference < 10% 20%-
Mar.18th
The End
Bibliography1. Luxury Goods Worldwide Market Study Fall-Winter 2014,Bain and
company, Claudia D’Arpizio, Federica Levato, Daniele Zito and Joelle de Montgolfier2. Luxury goods industry 2013, Stephanie So, Vanessa Yau, Richard Kan and Trevor Li.3. Luxury goods report, HSBC Luxury goods team, Antoine Belge, Erwan Rambourg, Sophie Dargnies4. Annual report 2011, 1012, 2013, Interim financial report 2014, Prada-grouphttp://www.pradagroup.com/en/home 5. 3rd Quarter results as of October 31st, 2014, Milan, December 5rh, 2014, Prada-rouphttp://www.pradagroup.com/en/home 6. Consumer discretionary sector, textiles, apparel & luxury goods industry,Prada S.P.A; Lvmh Moet Hennessy Louis Vui (MC), Bloomberg business, http://www.bloomberg.com/7. The Wall Street Journal; Why Chanel’s Price Cuts in China Could Boost Its Brand http://www.wsj.com/