Pestel Strategy

Technological:

• In order to get new textile and manufacture high quality products, the r&D Is continuously increasing.

• Online luxury sales continue to rise globally.

• They had to develop online sales.

Environment:

• Environmental awareness

Politic:

• Politic Stability

• Expansion of democratic system

• Liberalization trade worldwide

Economic:

• In 2000, the industry growth slowed down.

• Today, Luxury industry is a cyclical industry suffering from the continuing deterioration of the economic situation.

• Luxury market can no longer escape from economic cycles.

• Chinese luxury consumption has driven 7% of Global luxury growth in 2005.

• Luxury companies are winning new geographical markets (internationalization strategy)

Social:

• CSR seems to be a challenge. This challenge lies in the extent to which luxury firms will be able to increase their environmental, social and governance credibility.

• Many luxury goods industry’s specialists prompt luxury firms to put sustainable development issues at the core of their strategy.

• A global improvement in conditions of living.

Legal:

• Efficient brand registration system (protection of intellectual property)

Gucci: brand strategy based on several M&As. They want to be present in all the different segments of the Luxury goods industry.

Strategy:

• Strengths:

• Diversified Group

• Good image of leather goods and ready to wear product

• 560 directly operated stores and it achieved 67% of its annual sales through its own distribution network

• Increasing of sales in China

• Good Multi brand strategy since PPR got all the capital

• Weaknesses:

• Lack of vision with merger and acquisition

• Opportunities:

• Good perspective in the Asian market

• Stabilization and consolidation of the portfolio

• Threats:

• New merger and acquisition that can give to the market bad indication of what are their strategy and what is their vision

Richemont: This group focuses on luxury goods. It acquires several luxury goods.

Contrary to Gucci, its development is based on 2 core product segments.

Concerning their distribution strategy, this is a combination of directly-owned stores and franchises.

• Strengths:

• Good Position in the luxury industry since they sold their tobacco brand

• 42% of the annual sales with its own distribution network

• Weaknesses:

• Not enough diversify in the luxury industry

• Opportunities:

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