Retail

  • Tiffany & Co. global strategyBy Jeremy Snyder, Sara Dallaire, Patty Vukanovich, Matt Gottesman, Travis Goulding and Brad Hunter

    With the holiday retail season currently upon us, we recently did some research about a well-known jewelry retailer, Tiffany & Co.  When the average consumer hits the streets to look for gifts of jewels or new adornments for themselves, there are a wide variety of choices in the market.  From low to high end, each dealer has its own story, and will offer the shopper a unique experience tailored to what the dealer’s particular pitch entails.  In the case of Tiffany & Co., we received a healthy back-story about the company’s concerns of being a sustainable retailer.  The company’s goals ranged from sourcing gems and precious metals from conflict-free areas, to the use of recycled paper from responsible sources in the paper industry.  Our goal was to go a little deeper and investigate how far Tiffany & Co. was willing to press its concerns, or if the organization’s veil of corporate social responsibility was really a case of public relations spin to appeal to the mass market and make consumers feel good enough to make a purchase.

  • Under Armour global strategyBy Gael Marchal, Hardy Drackett, Kali Poza, Robert Bigot, Venkat Srinivasan and Veronica Borrowdale

    “We must protect this house” is Under Armour’s rally cry; however, in broadening its brand the company has failed to protect the market it created. Under Armour recently has made several strategic missteps compromising its unique position. Its failure to make difficult trade-offs and CEO Kevin Plank’s inability to articulate a clear strategic focus will ultimately dilute the Under Armour brand and hurt the bottom line.

    Since its inception in 1996, Under Armour has been seen as an improbable success story in an extremely developed and competitive industry.  It effectively created the performance apparel market, a blue ocean within the sports apparel industry.  In this market, Under Armour’s focus was centered on compression fit and moisture wicking fabrics, a product that filled the needs of many athletes unhappy with the standard cotton t-shirt.  This blue ocean allowed for tremendous company growth, expanding from $17,000 in sales in 1996 to $856.4 million in revenues in 2009. (2009 Annual Report)  Along with this growth came a very strong and recognizable brand.  In fact, according to a survey of teenagers, Under Armour “is now the #2 brand among teens, behind Nike”.  (Lefton) Naturally, this success has bred imitation and, together with Under Armour’s failure to protect their position, the blue ocean has turned red.

  • Louis Vuitton strategy“The whole problem that we all have, and Louis Vuitton is the leader of the industry – is to manage what I call the ‘paradox of luxury.’ How can you grow year after year, and give the satisfaction to many more customers, in many more countries, and at the same time keep this sort of exclusivity of luxury?” — Yves Carcelle, February 2008

    By Swecha Bhavana, Rodrigo Castillo, Sampad Das, Noah Emery, Estella He and Ho Young Kim

    In an interview with Yves Carcelle, the president and CEO of Louis Vuitton (LV), he touched on a unique strategic issue faced by LV and other luxury brands equally. The interview was given during LV’s expansion into Turkey in February 2008. He used a phrase, “the paradox of luxury,” to describe the expansion and growth of the luxury market. The paradox, according to Mr. Carcelle is aiming to increase the opportunities for growth while attempting to maintain the exclusivity of the brand. LV’s current strategy is focused on geographic expansion into emerging markets where the levels of disposable income have risen, creating new customers for the luxury goods market. At such a juncture, it becomes paramount for LV to avoid risk of diluted brand image. The fact that LV’s products are sold at only the 390 stores all over the world is one of the strategies around the paradox.

  • Coach men's lineBy Susannah Ware, Kshitij Shetty, Laura Haslee, Brian Bizjack and Juliana Figueiredo

    As Coach Inc. launches its men’s-only shop in New York City, it is taking a big risk by deviating from its established image in affordable women’s luxury goods. However, its efforts seem to be paying off at least in the eyes of one reviewer responding to the new store, “I really like this shop because … it’s perfect for gift-giving purchases. … Who’s gonna argue with a nifty Coach card holder or bucket hat?”[1]

    With the launch of a new men’s line, Coach is acknowledging changing market trends within the fashion industry. In the last five years, men’s designer clothing has sold at twice the rate of women’s clothing.[2] Also, sales of men’s designer products are expected to increase by about 35% in developing countries like India and China, which shows the potential for future international growth.[3] There is also research strengthening Coach’s decision to venture into the men’s segment that suggests men plan to spend 3% more on consumer goods than they did in the previous year.[4] In contrast, women intend to spend 1% less than they did previous year.  This year’s Black Friday spending research confirmed an average increase in male spending of $100 compared to female spending.[5]

  • Whole Foods global strategyBy Amanda Roberson, Amy Zelezen, Ankush Brahmavar, Boris Pilipenko, Kinjal Gandhi and Matt Werner

    Cincinnati resident Roberta Mand is spoiled for choice every time she steps out to buy groceries. Depending on whether she want to buy steaks, sushi, staples or macadamia-encrusted tuna, she heads to Costco, Wal-Mart, Kroger, Whole Foods or the local farmer’s market, all of which are nearby. Roberta’s array of choices illustrates the ever-evolving dynamics of the grocery industry. In this extremely competitive environment, all major players must continuously strategize to maintain a strong presence. A look at Whole Foods Market reveals how this increased competition can leave a company at a strategic crossroads. Since its beginnings in 1980, Whole Foods has been a leader in supplying organic and natural foods, and for years enjoyed its role as the only store catering to this niche market. However, since then other major players have identified this growing segment and now also carry lines of organic and natural foods.

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