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Chanel - US Operations

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market study
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Chanel in US is headquartered at New York. It is running successfully at stores in Boston, Chicago, Dallas, Honolulu, Los Angeles, New York, Palm Beach and San Francisco. Chanel offers a broad range of luxury products including fragrance, makeup, skin care, Ready-to-Wear, leather goods, fine jewelry, and accessories through a current U.S. network of 18 Boutiques as well as select department and specialty stores nationwide. Under the current guidance of designer Karl Lagerfeld, the House of Chanel has remained dedicated to luxury, fashion, style and image.

Though Chanel is doing successful business in US, it faces stiff competition from Versace, Gucci, and Prada etc. Chanel is continuously trying to evolve their products to keep up to their mission of simple elegance coupled with beauty and style. Lyle Saunders, vice president of Chanel creative in the U.S says that Chanel Fragrances are seen as inspirational. Hence, they launched the campaign to promote Chance (launched in year 2002) catering to young women. The promotional campaign launched by the company was also an attempt to broaden its customer base.
Chanel is committed to its promise of delivering quality via its products. To achieve the same, it runs Chanel Research and Technology Laboratories and CRIES (Center for Epidermal and Sensory Research and Investigation).

They do extensive research and ensure 100% quality before launching products in the market. One such lab is based out of US where their skin-care and beauty products are well-researched and fully tested. "In the U.S., we have 30 or 40 suppliers for all the various components needed that can provide the quality, service, reliability and cost we demand?but the quality is first." says Mr. Scott Widro, Vice-president of Material Management based in Piscataway, NJ.

Most Chanel beauty products for the U.S. market are formulated, filled and distributed at the Piscataway location. Approximately 750 employees at the Piscataway location are engaged in all aspects of making Chanel beauty products and getting the products to their respective markets. Worldwide, Chanel employs approximately 10,000; all U.S. operations tally about 1,300.

Two-thirds of the U.S. gross domestic product (GDP) comes from Retail Industry. Most major multi-store retail chains had sales declines in the first part of 2009, but saw improvements toward the end of that year, and the upward trend has continued into 2011. The integrated Retail Technology - specifically the Online Shopping clubbed with mobile phones continue to be the hottest trend in 2011.

US market is considered to be an inspirational market where celebrity-endorsed products are always a hit among customers. The market entry barriers are fairly low which opens the doors to every small as well as big retail player. This leads to increased competition. In the wake of cut-throat competition in US market and changing consumer preferences, will Chanel be able to emerge as a unanimous leading fashion brand?

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