Tuesday, 7 April 2015

What can Luxury Brands teach us

FROM AMBIDEXTERITY STRATEGY TO A FOCUS ON ICONIC PRODUCTS, THIS IS HOW THE CRISIS SHOULD BE TACKLED.

By examining results communicated by large luxury enterprises, it would seem that the business, in its various aspects, understood how to react to the changes dictated by the financial crisis quickly and efficiently, learning to manage increasing complexity. Important best practices in strategy can therefore be learned from these companies, which may be transferable to other sectors and areas. First of all, these companies were able to adopt an ambidexterity strategy. In other words, not just big investments in branding and communication, but also a search for efficiency in business processes, production, logistics and sales. They have also returned to their origins, focusing attention on iconic products and product innovation, while still respecting tradition and company expertise.

“Though it may seem trivial, luxury companies were able to recover by working on their offer and products, meeting the requests, including the unspoken requests, of the market,” says Olga Annushkina, SDA Professor of Strategy and Entrepreneurship. “Luxury brands share a great capacity for reading the market and the context and for gathering emerging signs, along with the ability to adapt to change rather quickly. These companies have been able to do so thanks in part to a close and often personal relationship with their most important clientele.”

” They are also companies that are able to advance fluidly, within a large competitive arena with vague boundaries. They have learned to create a point of reference, brands that can influence results or indicate directions through their conduct. These brands monitor market shares and strategic decisions carefully. Multipoint competition is a reality in all markets. It is certain that in the near future luxury companies will find themselves needing to manage increasing complexity in their development strategies. For example, something that is by now well established in leading world markets, it will be a challenge to carve out new, important areas of international growth. Africa, the last piece of the pie, is still not on the radar. “The challenges are many and complex,” explains Luana Carcano, SDA Professor of Strategy and Entrepreneurship, “The question is what maneuvering spaces can be put to use to strengthen a company’s position in terms of distribution and commercial strategy? They will need to then be able to attract the Millennial generation to the cultural values and traditions of luxury. Lastly, the challenge of integrating the potential of digital technology will need to be met without distorting the values of the DNA of the company culture and the brand.”

Source: Sarfatti25