'Yves Saint Laurent\r'

'After a radical study of your company and a meticulous compend the information you know given me, I return a bun in the oven concluded that if Yves Saint Laurent variety shows from a differentiation schema to a differentiation focus strategy, it is possible for YSL to ikon its profit within three socio-economic classs. The upsides of the change ar a 150-percent join on in profit and unfluctuating note aw atomic number 18ness in a receding segment whose profile go away be draw in details hereafter.\r\nOn the other hand, on that point argon downside risks, including high possibility that Louis Vuitton, Tods and Bulgari will set out to replicate YSL products since they atomic number 18 close to the targeted positioning as well (See Appendix A). The specific goals for YSL in the conterminous 3 years include focusing on a specific segment of the fashion industry. YSL’s current operations and net sales of $ cxlv million be small, compared to Gucci and even YSL Beaute but they sop up differentiation focus strategy a competent and viable option.\r\nFurther much, the prospect of targeting a niche securities industry also arises from YSL’s prominent image as school sexy and European-chic. Hence, I recommend that YSL develops a focus on men and women who are â€Å" xxx and thriving”. These clienteles are those who are beautiful and sophisticated with a promising career. They are quite sure-fire for their age and seem to â€Å"have, but still penury it all” such as junior undefeated entrepreneurs or middle-management investment bankers.\r\nThe benefits of focusing on clientele who are in their 30s are the solidity of their earnings which will drive stable sales and their endeavor toward elegance and departing from pure chic and hip. The other goals that conjugate with a targeted niche segment are improve operating margin and sales. With the declining trend in royalties, I recommend that YSL should discount the m and focus mainly on operating margin excluding royalties. The milestones are 20% in the 2004, 24% in 2008 and 28% in 2005 which will bring YSL’s operating margin to Vuitton’s vicinity.\r\nHowever, increasing volume in sales should increase as in well in position to gain a more critical mass. The milestones are set as followed: at least $200, ccc and $four hundred in the first, second and third year respectively. These targets will uniquely reposition YSL since it has a higher(prenominal) operating margin than Hermes and its sales target is overmuch lower than Vuitton which signifies its exclusivity (See Appendix B). Product: on that point are two products get by dint ofering options that I would consider: off-the-peg clothes or leather bags.\r\nBoth products are desirable in the chosen niche market. Louis Vuitton has a leather-dominant product prance while Hermes would be a more appropriate competitor for read-to-make apparel. It is important that YSL whole ch oose one product on which it flush toilet focus because a diverse product mix when implement a differentiation-focus strategy runs a dilution risk. The specialty of leather is an advantage with lower product roue turnover than apparel. Bags are often viewed as more versatile as a fashionable account compared to the constantly changing trends in apparel.\r\nHowever, the habit of acquire clothes when new season comes around force out drive higher sales. In the case that vesture is chosen, it is recommended that the sizes should range from 0-2 and the fit should enunciate our clienteles’ confident figures. These factors total to the exclusivity. Also, there are a lot of opportunities for synergies in production. YSL can have production in Italy with the service of Gucci’s excellent suppliers relationship and expertise as well as its own factories in Paris.\r\n impairment: In order to meet the targeted sales of $400 million after 3 years, if each occurrence is ha s a premium price of $3000, YSL is aiming to change 134,000 items in 2005. It is a reasonable estimate considering that after the encyclopedism of Mendes, YSL will have the capacity to produce and sell at such volume. However, it is recommended that YSL open additional stores (See home base/Distribution Channel). When buying raw materials from suppliers, YSL and Gucci need to fall in to ask for better discounts.\r\nYSL should also sell off any unnecessary factories bought from Mendes in France if it is more stinting to produce in Italy with Gucci. Place/Distribution take: Gucci and YSl can also share facilities including warehouses in Italy and factories in France. Another recommendation is that YSL should purchase all its licensees, destroy contracts with other distributers and wholesale businesses even if they are bringing in earnings. YSL needs an exclusive distribution express to match the nature of its products. YSL should only sell its products through directly operat ed stores.\r\nYSL need to work with Gucci’s new revamp team in order to change their store layouts to have a lounge ambience, capable with the sophisticated 30s. YSL also needs to ask Gucci to collapse 15 new locations in Italy for additional stores. There should only be stores in Italy and France to preserve the European charm which is a big part of its brand image and identity. It must close down the distributor in Japan so it can have a complete control over what the stores intuitive feeling like, how the sales representatives dress and behave.\r\nAnother distribution head that YSL should explore is the budding e-commerce culture but YSL should preserve exclusivity by restricting access unless existing customers have a code authorized by YSL to record in. Promotion: â€Å"A luxurious brand for the close to luckily beautiful people on landed estate” The phrase should be the tagline for any YSL advertisement and a benchmark to assessing the brand performance. Also, it is important to reiterate the â€Å"fortunately beautiful” in marketing campaign as to reinforcing the exclusivity of the clientele and to anchoring the brand with such clientele.\r\nEven the buying experience is unique. It is a negotiation between the sales representative and the customers to determine each other’s fit. Salespeople should be told not to rush a sale and customers are encouraged to make multiple visits to the store in advance purchasing. In addition, if Gucci has Tom Ford, YSL needs to use Yves’s revered figure in marketing. An image of the young Yves will add to the mystique of the brand and a gene linkage to a rich history. I hope these recommendations are helpful and I am looking preceding to working with you.\r\n'