Chanel S.A., fondly known as Chanel is a privately owned fashion brand. It was founded by Gabrielle "Coco" Chanel in 1909. Company is headquartered at Paris, France and is present in more than 310 locations worldwide. The annual revenue as recorded in 2010 stands to be ?1.809 billion.The company offers an exotic product line offering Haute Couture (customized clothing), high-end clothes, fragrances, jewelry, hand-bags, cosmetics etc. The brand is just another name for elegance and style. The versatile, evening cocktail dress, also known as 'Little Black Dress" among women is said to have been the creation of the brand. Chanel no.5, the perfume is a hit among customers.
Company faces competition from Louis Vuitton, Gucci, Christian Dior, ClarinsWhile Chanel targeted women aged between 35-50 years originally, its customer base now consists of young women too.Chanel lives up to its brand image in all whatever it does for promotions. Starting from fashion shows to commercials to billboards to brand ambassadors, everything is carried out in style and elegance.
Retail Industry worldwide is growing. Apparel industry is characterized by features like short life cycles, multiple product variety, extended and stiff supply processes. Last 20 years have been very remarkable in its transition phase. A few of the primary reasons are:
- Wholesale operations
- E-tailing/ E-retailing
Along with the existing opportunities, the industry also faces certain challenges like Demand and Supply mismatch, high production costs, stiff competition etc. Clothing trends and fashion changes at regular intervals to which companies need to come up with contemporary clothing lines every now and then. Chanel does that beautifully. Chanel keeps up to the changing market trends of clothing, accessories etc. Customers can choose from an array of products. There is something available for everyone.
With numerous Chanel stores being opened worldwide, the company also offers bright career prospects for everyone. Working Conditions at the company are considered cooperative. They provide their employees with a healthy work environment and other fringe benefits.
Chanel has been managing their Brand Management activities in an exquisite manner. They have always got the high-profile celebrities modeling for them and endorsing their product lines across the world. The famous poster of Marilyn Monroe spattering herself with Chanel no. 5 (fragrance) is still selling.The Global Retail picture is fast changing with various changes taking place. Increased Globalization norms have transformed the entire world into one common trade platform. Asian countries like China, India are strong competitors globally owing to their cheap labor costs and easy raw material availability.
Effortless access to information tools like TV, Internet is driving retail industry to e-commerce. Companies, if want to stay ahead in the race; have to be present on the web too. Will Chanel be able to drive its E-commerce with equal astuteness? Will Chanel survive the threat from developing economies and competitors offering same products at affordable prices? We need to wait and watch.
[...] Strong family centric private ownership structure has reduced aggressive regional and local expansion as compared to closest peers such as Burberry, LVMH etc (Datamonitor, 2011). ➢ Opportunities: The company can gain from the expansion strategies and brand recognition in new international markets to increase its revenue and profitability. It has an opportunity to expand its international operations into emerging markets like India and China. With the rising trend of e-commerce business, there is huge potential for the company to increase its profitability through the direct-to-customer segment. [...]
[...] The core risks are as follows: Chanel SA Risk Map (2012) Disclaimer: The risk map is prepared on our assumptions and is not taken from any public announcement or article. Corporate Social Responsibility- Before 1994, majority of corporations started enhancing shareholder value to enhance long term sustainability. This was necessary due to fierce competitive pressures, price sensitive marketspaces and availability of scarce capital (Takala & Pallab p. 19). The three basic pillars of corporate social responsibility stood as (Takala & Pallab p. [...]
[...] The company might be subject to hostile takeover attributed to strong presence and penetration across younger HNI population (eighty percent of facebook fan portfolio) in the next 2-3 years. Future Research Scope The future research scope involves the following: ➢ Changing consumer purchasing behavior across emerging luxury goods market worldwide and its impact on Asia focused businesses such as Chanel SA ➢ Broader comparative study on top twenty luxury goods manufacturer worldwide such as Prada, Bulgari, LVMH, Chanel SA etc. References ➢ N. Craig Smith, “Corporate Social Responsibility: Whether or How?” California Management Review, 45/4 (Summer 2003): 52-76. [...]
[...] Recently, the company has been focusing on non core markets such as Latin America, China and other South East Asian countries to reduce dependency on US, France and United Kingdom on long-term basis. It has opened mono-brand boutiques in São Paulo in the last three years. Thus, overall Chanel SA's strong brand positioning across younger HNI population along with unique mobile and social media interactive promotional strategies is enhancing long-term competitive advantage for the enterprise in domestic i.e. France and international markets. [...]
[...] Apparel and hand bag business activity is the core segment for Chanel SA accounting for 51% of group revenues in 2011. The company has dominant market positioning across home luxury retail segment controlling approximately 33% of market share (i.e. France). Chanel No 5 is the flagship fragrance brand offered by the enterprise worldwide. Chanel SA has standalone licensing agreement with Luxottica Group providing luxury eyewear brand portfolio in core and non core markets. The company's flagship business activity, the fragrance and cosmetics segment, constituted 49% of group revenues in 2010- 2011. [...]
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