Luxury Good and Gucci

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Gucci‘s overall strategy was to vertically integrate to strengthen its overall brand image. After vertically integrating they acquired other luxury retailers to continue to grow horizontally and to increase economies of scope. The economics of the luxury goods industry changed forcing Gucci to modify its strategy. Consumers demand shifted from classic style buyers to style conscious buyers. Gucci not only had to change due to the economics of the industry but they also had several problems with their existing structure. Hence Gucci made the following moves to reposition it to compete in the new economics of the luxury goods industry. Gucci The partnership between DeSole and Ford addresses the company’s inability to have streamlined…show more content…
Hence Gucci introduced items from scarves to fur coats. To remain focused and maintain its “luxury status”, Gucci did not introduce diffusion product lines. Gucci had initially set its prices too high hence reducing their retail prices by 30% was necessary to attract and maintain customer loyalty. In order to generate demand for the product Gucci doubled their advertising and turned Tom Ford into a celebrity hoping to attract media and attention from around the world. To restore Gucci’s image as a high end luxury goods retailer they renovated all of their stores to support this new image. In addition all internal and external communications had the same look and feel to convey a consistent brand identity. Furthermore, they reduced distribution through retail stores that didn’t support the new brand image regardless of sales. Gucci launched an official web site to create awareness and exhibit new product lines and to position themselves against their competitors. Suppliers Suppliers are a key driver of profitability—a key competitive force. Suppliers are responsible for delivering a premium product that satisfies the company’s standards in quality and that reflects Tom Ford’s creative vision. Without fast turnover to meet fashion forward trend demands and a quality product, the repositioning of the Gucci brand could not have taken place. To fulfill this vision Gucci created an incentive program to keep suppliers loyal to ensure a quality product

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