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Transcript of eliesaabfinal-130118170741-phpapp02.ppt
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CASE STUDY
Marielle AH-CHINEKristina BOKOVAMargaux CHERIF-CHEIKHFENG TiantianHUANG Yingying
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COMPETITIVE ANALYISISIndustry Forces
ABSOLUTE LUXURY/HIGH-END LUXURY SEGMENT
Competitors other haute couture houses
(Chanel, Christian Dior, Jean Paul Gautier, Valentino, etc. )
ELIE SAAB
-Competitive Couture Pricing Without Compromising On Service
-Exceptional Service & Top-of-the-line Quality
-High Exclusivity
-Customer Segments Targeting Super-wealthy, High-end Market (Celebrities, Royalty, Rich And Famous)
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Industry Forces
Substitutes
- “Democratization” of fashion - H&M x MMM
Suppliers
- Very dependent on materials and fabric suppliers
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FORESIGHTKey trends
Technological trends
- increasing influence of social media and digital marketing activities
Regulatory
- Tax advantages in some countries
- Higher prices due to import duties and taxes
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FORESIGHTKey trends
Socioeconomic trends
- Growing number of “extreme net-worth individuals”, especially in Asia
Chinese consumers account for 20% of the global luxury sales
Asian consumers (i.e., adding Japan, Korea, and Southeast Asia) account for more than 50% of the global luxury sales
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MARKET ANALYSISMarket trends
Market Issues
- Changing consumers’ taste and preferences
Younger consumer base in Asia
Aging of customers in Europe, US & Japan
Market Segments
- Accessories & hard luxury largest category
Needs & Demands
- chase for higher quality and greater craftsmanship/materials favors absolute/high-end luxury offerings
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MARKET ANALYSISMarket trends
Switching Costs
- High brand loyalty
Revenue Attractiveness
- Asian market (China and Hong Kong) + emerging Markets
- Absolute luxury segment €40B in 2011
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MACROECONOMICSMacro-economic forces
Global market
- Luxury fundamentals
remain strong in the
medium term
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BUSINESS MODELValue Proposition
Design - Brand/status – Customization - Price
NEED?
A unique design made of exquisite materials
WHAT?
Haute Couture, RTW, accessories and wedding dresses
FUTURE?
Any luxurious and exclusive products
Efficiency of fittings
Personalized services
Lifetime experience
Very selected manufacturers
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BUSINESS MODELCustomers
Niche market
PRIMARY TARGET:
Feminine, Elegant and
Super Wealthy Women
NATURAL TARGET:
Celebrities and Royalties
FUTURE PLANS:
To diversify
Personal assistance Co-creation Self-service
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BUSINESS MODELDistribution Channels
AWARENESS:
Events, Catalogues, Advertorials to the corporate website, Interactive portal, Ads
EVALUATION:
Visit the stores, Try the dresses, Watch the catwalk shows
PURCHASE:
Flagship stores, Concessions, Multi-brand retailers, Catwalks
DELIVERY:
On site, at home
AFTER SALE:
Guarantee repair
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BUSINESS MODELKey activities
Design of luxury stores
Haute Couture
Customers proximity
Animate the online website
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BUSINESS MODELKey resources
PHYSICAL:
Stores, fabrics, sewing materials
INTELLECTUAL:
Website
HUMAN:
Creative + Business
FINANCIAL:
Shareholders, Bank loan
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BUSINESS MODELKey partnerships
TO BE SOLD:
Retailers, Department stores, Beauté Prestige International
TO BE KNOWN:
Celebrities, Charitable organizations
TO EXPAND THE BRAND UNIVERSE:
Hotels, Yacht companies
KEY SUPPLIERS:
Fabrics supplier, RTW manufacturer
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BUSINESS MODELCost and Revenue structure
MOST IMPORTANT COSTS:General, selling and administrative expenses, Cost materials and outsourced production, Salaries and Fashion shows
THE MOST EXPENSIVE KEY RESOURCES:
Stores and Fabrics
THE MOST EXPENSIVE KEY ACTIVITY:
Fashion shows
REVENUES:
Sales, Licensing, Partnerships
RTW: $1500-$21000
Haute Couture: $34000-$1000000
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ES’s core business:
Haute Couture.
Four primary product lines:Haute Couture, RTW, Accessories,Wedding Dresses.
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Diversified : enhance its prestige in every aspect of the luxury sector.
SIGNATURE HOTELS
2008 Tatweer/Dubai Properties Signature Hotels
U.K. BOUTIQUE AT HARRODS
2008.7 ‘Eveningwear’ Department, First Floor
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PARFUM ELIE SAAB
2009.9
10-year fragrance and cosmetic license contract.
LUXURY YACHTS DESIGN
2010.1 Weyves International Ltd. and Oceanco
FLAGSHIP STORE IN DUBAI
2010.7 First flagship store in the Gulf region, The Dubai Mall
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VARIOUS MODES OF ENTRY
Licensing
Partnerships
Third-party Distribution
Company-owned Stores.
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LicensingPROS AND CONS
Minimizes risk and investment.Speed of entryAble to circumvent trade barriersHigh ROI (Return On Investment)
Lack of control over use of assets.Licensee may become competitor.Knowledge spilloversLicense period is limited
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PartnershipsPROS AND CONS
Overcomes ownership restrictions , cultural distanceCombines resources of 2 companies.Potential for learningViewed as insiderLess investment required
Difficult to manageDilution of controlGreater risk than exporting a & licensingKnowledge spilloversPartner may become a competitor.
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Third-party DistributionPROS AND CONS
Minimizes risk and investment.Speed of entryMaximizes scale; uses existing facilities.
Trade barriers & tariffs add to costs.Transport costsLimits access to local informationCompany viewed as an outsider
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Company-owned Stores. PROS AND CONS
Greater knowledge of local marketCan better apply specialized skillsMinimizes knowledge spilloverCan be viewed as an insider
Higher risk than other modesRequires more resources and commitmentMay be difficult to manage the local resources.
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Strengths, Weaknesses, Opportunities And Threats (SWOT) Analysis
ES’s Competitive Advantage?
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Strengths •Member of the Chambre Syndicale de la Couture•Direct ownership of its stores except Dubai (for local expertise)•One of the few certified « Couture » house•Trust and loyalty of stars and royalty
Weaknesses •Weak presence in multi-brand shops•The dilution of the brand into many activities (yachts, hotels…) and the plan to expand even further•Still low sales in Asia, USA and Russia
Opportunities •The rise of the number of World High-net-worth individuals (HNWI) and of their wealth, especially in Asia•The asian market •Huge potential in Asia not yet fulfilled
Threats •Trend : to mix luxury and affordability•Trend : people tend on dressing more casual•Party ladies are no longer high-class aristocracy but new-world billionaire
SWOT
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Elie Saab’s competitive advantage
The ultimate personalized experience provided by the brand for Haute Couture customers.
+ the personality and know-how of the designer Elie Saab
Elie Saab really applies the principles of Haute Couture.
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STGAE OF Product Life CycleChange OF Company’s Positioning And Differentiation Strategy
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Haute couture : Maturity phase.Elie Saab has a great expertise in this activity. Sales are hight but tend to stagnate.
Ready-to-wear & accessories : Sales are in constant progression.More recent activity in Elie Saab portfolio.
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Positioning and differenciation
• At first, the brand focused exclusively into Haute Couture and exceptional custom-made clothing for super wealthy customers.
• Launch of a Ready-to-wear activity to extend the portfolio
More affordable and easier to produce in large volumes
A greater return on investment and turnover.
Less exclusive global situation but more accessibility and commercial attractiveness
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For example, the emerging ‘affordable luxury market?’
Should ES target a new market?
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Our answer is:
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lower cost (material/human)
higher production volume
higher turnover
higher profit margin
Affordable Luxury Market
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Catered to “super wealthy” -Rarely sold
“more accessible”-Main income
resource
Haute Couture vs Ready-to-wear
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Similarly…
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Geographically …
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e.g. CHINA
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In these emerging markets…
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The prerequisite of this strategy of growing in new markets is to maintain the brand’s image and prevent it from being diluted .
Individualization
loyalty
Communication
BUT…
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OVERALL RECOMMENDATIONS
Marketing Mix Strategy
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Our overall recommendations for ES
Maintain is brand image:
“High-end, one-of-a-kind designs made from the finest fabrics and materials”
High quality customized service
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Product
“Mass” class - main part of luxury consumers
Accessories & cosmetics, etc.
“New rich” – status/wealth
Domestic outfit, luxury hotels, automobiles and yachts’ decoration, etc.
Diversification
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The haute couture has always been and must continue to be the core and soul of ES’s business.
Consolidation
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Pricing
A pair of sunglasses 350€ – 400€
A custom-made couture gown
$30,000 - $1,000,000
A pair of plain trousers $1,200
A fur jacet $21,000
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If asked to equate ES with examples of automobiles…
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Promotion
Increasing promotion spending on new media
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Making full use of celebrity effect
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Distribution
Another trend in the luxury industry is that manufacturer/retailer relationships have lost an element of trust.
A bad choice of licensee retailer may result in a disaster for a brand’s image.
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HONG KONG, Jan. 2012
Company-owned Stores
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Merci !