Anaistics And Disadvantages And Strengths Of Gucci

History of Gucci

To start with, I would like to talk about Gucci as a luxury company. Gucci is an Italian company founded in 1921 in a modern city Florence and considered to be the most recognizable fashion. This brand is well-known for the high-quality leather products(small leather goods, bags, shoes, jewelers, luggages and clocks). Furthermore, the fashion house produces glasses and the design for a car «Fiat 500».

Gucci started its first festival in Florence in 1981.In one year Gucci became a public limited company. In 1990’s Gucci was renamed as a global luxury company through new marketing and brand strategies.

Between 1991 and 1993 Gucci’s loss amounted to 102 million dollars owing to adverse impact mainly from the Gucci family’s and

There are some advantages and disadvantages of this brand.

Strengths

First of all, advantages of Gucci is in there established, very strong company identity. They have the ability to control their distribution channels.Its aggressive strategy achieved through communication is additionally another of Gucci’s benefits. In some time, Gucci changed its strategy of carrying one brand to branching out to a some brand groups. This strategy is also improved by other companies as Louis Vuitton and Prada. Some luxury companies use the strategy of concentrating only on one brand and add different business segments such as :Armani, Polo Ralph Lauren, and Versace.

This strategy is used due to allow the positioning of the brand in the industry to make depending on the number of brands and huge number of business segments the company wants to compete in.We can’t but mention, that Gucci has very strong relationships with suppliers and some retails. Finally, they have directly operating stores in some counties in Europe.

Furthermore, Gucci has very weak financial base. The base is weak because with a long period of time debt increase from $17 million in 1998 to $143 million in 1999 and to $1,3billion in 2003. Unfortunately, some brands in the Gucci’s group are not profitable.

Opportunities

We could say that opportunities for Gucci in the luxury market is increasing economies from Asia for example India and China. Individuals who come from this countries who just amassed a great wealth because of amazing performance of the economy would want to taste a luxury brand as Gucci. Moreover, they create competitive advantage in different business segments. Finally, there need is to expand and produce more luxurious products arise.

Threats

There is a problem that Gucci needs new marketing strategy because there is lack of innovation. The luxury goods carry the highest level of items produced for extremely rich people. This market saves on cost to get the best item because of quality style and modern design. Also, price is not the most important in such an industry. Competition is also productively minimized by the intense competition of established luxury products.Finally , luxury items do not have special substitutes as other items but the threat could come from