Today, for Gucci what are the real world counterparts to each of Porter's five forces? Gucci is a leading global brand in the luxury goods markets. Porter's five forces are applied to these key markets as below:
Gucci is a leading global brand in the luxury goods markets. There is strong brand identity in the luxury goods market and the market is slated to grow over the next few years. Gucci has an advantage of very strong brand and has to compete with other well established brands such as Chanel, Calvin Klein, Louis Vuitton and Christian Dior.
Customers in the luxury goods market prefer high end products with highest quality materials and exquisite craftsmanship, which are offered by these well established brands. So the market is dominated by these established players and the profit margin pressures are low. Most product designs vary from company to company.
Hence rivalry among competitors is low. Gucci has good control over this broad and highly flexible network of suppliers.
Also, these suppliers would like to be associated with a strong brand like Gucci. Thus Gucci has good leverage on its suppliers. Hence bargaining power of suppliers is low. Customers have many choices among high end luxury goods.
There is virtually no switching cost for the products. Customers have changing tastes and demand high quality personalized products. Since Gucci is a very strong brand and understands the tastes of the customers, the power of customers is moderate.
Gucci has the advantage of being a proven brand delivering to customer needs over the years but also faces the threat of ever-changing demands of its customers.
Gucci operates in the fashion industry, which has products with very short life cycles. A high degree of creativity, market knowledge and manufacturing flexibility is required. Besides there is a strong brand value in the fashion industry.
It is difficult for new entrants to acquire these competencies and establish their brand value to compete with established brands like Gucci. So threat of new entrants is low. Luxury goods are discretionary items.
Their purchase can be postponed by buyers or can be replaced with cheaper products during times of recession. Luxury goods also have to compete with other expensive valued items such as a car or with leisure holiday trips etc. Hence the threat of substitute products is high.
Explain your reasoning carefully. The following information of rivals is needed to assess the competition:THE GUCCI CASE. 1. Today, for Gucci what are the real world counterparts to each of Porter's five forces? Gucci is a leading global brand in the luxury goods markets.4/4(1).
WikiWealth's Five Forces analysis evaluates the five factors that determine industry competition. Add your input to luxury-industry's five forces template. Add your input to luxury-industry's five forces template. Gucci will also be able to hold its position to be one of the top brands in the luxury good industry.
is a fast growing economy worldwide. High net worth individuals are increasing in number in the region. The Luxury industry of leather products. Porter five forces Intensity Competitive rivalry High Bargaining power of buyers Medium Bargaining power of suppliers Medium Entry barriers High Threat of .
Nov 29, · PORTER'S FIVE FORCES ON LOUIS VUITTON v LV has gained many rivals in the luxury brand industry such as Versace, Hermes, Burberry, Chanel, Prada, Gucci, Versace, Hermes and so on. Luxury Industry Analysis Posted on February 19, by Helena Mullock The term luxury has been defined as “something inessential but conductive to pleasure and comfort” (The Free Dictionary, ) and “great comfort, especially as provided by expensive and beautiful things” (Cambridge Dictionaries, ).