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Business Policy & Strategy
Company: Saint Laurent Paris
Team 3
Tse Kwan Tsz, Jane s157272
Chan Chin Hong, Brooklyn s156166
Li Ka Lok, Ken s176322
Chu Pui Yan, Katie s156270
Heung Mun Wa, Dace s177451
Company Background
Background
- Founded in 1961 by Yves Henri Donat Mathieu Saint Laurent (who previously worked for Christian Dior)
- Based in Paris, France
- Currently operating as a subsidiary of Kering Holland NV
- Yves Saint Laurent -> Saint Laurent Paris in 2012 by Hedi Slimane
- Current creative director: Anthony Vacarello
Customer Characteristics
Customer Characteristics
Finance
Finance
The Golden Circle
Focused Differentiation
- A theory proposed by Simon Sinek
- Used to examine why people buy into a company
Why
- Why they do what they do
- The reason for the company's existence
How
- How they do what they do
- What differentiate the company from the others
What
- What are the end product/services
- What the company is providing within the system
Why
Company Core Values
- Follows its parent company's vision
- Kering's Vision- Embracing Creativity for a Modern, Bold Vision of Luxury
- Mission Statement: Saint Laurent Paris aim to create and market highly desirable products through innovation and unparalleled quality and design
Creativity
- To be bold and dare to take risks
- Constant innovation will inspire enthusiasm for the brand's exceptional product
Uniqueness
- A mean of self-expression
- Enabling Clients to display their personality uniqueness
Sustainability
- To ensure respect for the environment
- Positive social impact
How
Focused Differentiation Strategy
Focused Differentiation
- Unique features that fulfill the needs of a narrow market
- Customers focus on differentiated features more than the cost of a product
- Differentiation advantage come from the premium
Market Segmentation
- "Fashion conscious, independent, strong-mined"
- Upper class male and female with high income and education level
- Focus more on the younger generation in recent years
Focused Differentiation Strategy
Core Competencies
- Durable and special leather bags with signature design
- The collection is not constructed around a handbag
- Obscure material used to made handbags - tortoise skin for small bags and baku for summer bags
- Comparably outstanding ready-to-wear collection
- Range: accessories, jewelries, clothes, shoes
- Both permanent collection and a season-to-season collection are offered
- Permanent collection: Maintain the heritage of the brand and long-term loyal customers
- Season-to-season collection: Catch the attention of younger customers with chic and fresh design
- "Youthful twist" to the brand and creativity
- “Metal chains, which Saint Laurent had often used in his early years for necklaces and belts, were re-purposed to serve as shoulder straps. Processes and techniques were adapted to achieve whatever the current theme demanded ...”
Focused Differentiation Strategy
Other Differentiated Features
- Customer Loyalty Management
- Continuity product line to represent brand heritage and retain loyal customers - Logo product
- Acquisition of new and young customer through more innovative concept
- Create superior customer value through "me-tailing"
- Social Impact
- Certified several of its businesses under Social Accountability International’s SA8000 Standard
- SA8000 sets out a strong approach concerning forced labor and provides guidance to suppliers and business partners regarding responsible sourcing
- Focus on E-Commerce
- Development of mobile shopping app for potential smartphone users
- Customer can connect to the brand through the official webpage, Facebook, YouTube & Twitter
- Opening of E-store in more high profit countries and developing language specific sites
What
End Products
Porter's Five Forces Analysis
Porter's Five Forces Framework is used to analyze the competition that Saint Laurent Paris is facing
Porter's Five Forces Analysis
Threat of Substitute
Low
Threat of Substitute
Counterfeit Product
- Especially in emerging market in China
- May potential dilute the value of the brand
High switching cost
High Brand loyalty
- Customers are willing to stay with the brand even when competitor's offers are equally attractive
- Continuity product line for loyal customers
- Customers mainly come from a high income group who wears luxury product to display wealthiness - continuous demand
Differentiation
- Signature designs are unlikely to be replace by other brands
Threat of New Entrants
Low
Threat of New Entrants
High Barrier of Entry
Reputation for high quality product
- New entrants are unlikely to achieve such position without significant investment and experience in such industry
Capital Requirement
- Significant amount of capital is required for marketing (The spending on offline advertisement for Saint Laurent Paris is about 2,000,000 GBP a year)
Bargaining Power of Buyers
Low
Bargaining Power of Buyers
Strong Brand Recognition
- Brand image is perceived to be different from another brand - more youthful, "rock & roll" image
Price Sensitivity
- Buyers’ low price sensitivity suggested that they will not be affected by adjustment in price
Membership Programme
- Membership increase the cost of substitute and decrease incentive to change
Bargaining Power of Suppliers
Moderate
Bargaining Power of Supplier
Ability to absorb increase in cost
- Premium price on its product
- High profit margin
Tight quality control over suppliers
- Follow the California Transparency in Supply Chains Act of 2010 (SB 657) - address the issues of slavery and human trafficking
- Allowing consumers to make better, more-informed choices regarding the products they buy and the companies they choose to support
- Eliminate the risk of forced labor in the supply chain
Competitive Rivalry
Moderate
Competitive Rivalry
Relatively high competition in the industry
- Competition is not on price due to high profit margin and customer's low price sensitivity
- Focus on quality and image perception
- Ability to attract the right designers with right abilities
Relatively large number of competitors
- Dolce & Gabbana
- Balenciaga
- Alexander McQueen
- Balmain
- Prada
- Louis Vuitton
Strategy Evaluation
Advantages
- Emphasize brand image of modern fashion
- Higher awareness to fashion trend
Disadvantage
- Neglect the potential segmentation
- Price differences between the cost leader’s products is too large
Advantages
- Emphasize brand image of modern fashion
- Build competitive advantage in narrow segments
- Fashion icon( historical brand, French chic style)
- Permanent collection, logo product (exclusivity)
- Hard to replace
- Higher awareness to fashion trend
- Narrow market
- Easier to do research
- Quickly react to current theme demand
- Design differentiate features of products (season-to-season collection, without losing their identity )
- May lead the trend
Disadvantage
Disadvantages
- Neglect the potential segmentation
- Target: upper class, younger generation (limited demand)
- A little portion of buyers
- Struggling to stay in initial business
- Sales generate is fixed
- Ignore the potential profits
- Price differences between the cost leader’s products is too large
- Fast fashion trend (trend cycle speeds up)
- Change frequently
- Buy large amounts of clothes with the same price
- Customer’s desire decreases
Strategic Recommendations
Value adding
- Strengthen promotion on other segmentation
Sustainable competitive position
- Emphasize the company’s own features (Advertisement)
Mix of both
- Sustain brand image
Strategic
Recommendation
Value Adding
Value Adding
- Strengthen promotion on other segmentation
- Parralle with Kering’s vision
- Invite different generation celebrities to attend Saint Laurent Paris Fashion Show
- Hire models of different generation to show off the female charm
Sustainable Competitive Position
Sustainable Competitive Position
- Emphasize the company’s own features (Advertisement)
- For Long Term, buying a Saint Laurent Bag is cost averaging
- Unique Selling Point: Durable, Roomy, small zip pocket, functional, design…
- Products can be used for a long time
- Not the same quality compare with cheaper brand
- Not only Know Your Customer, but also Show Our Feature
Mix
Sustain Brand Image
- Luxury →(Role of social class division)
- Increase desire to buy →(an exclusive sense of Saint Laurent Paris)
- Crowd control →
- A lot customer within a store will let luxury buyer feel uncomfortable
- Maintain one-to-one services as far as possible
- Enhance customer experience
- Pre-sales services
- Warm hints for High-end customer with new product notification.
- On-purchase services
- Ensure the staff is focus on customer
- Provide professional recommendation on outfits.
- Follow-up services
- Rise the time limit of customer care warranty.
- Rapidly respond to customer’s request
- Increase customer loyalty
- Provide motivation to be its customer (want to enjoy high quality services and comfort buying experience)
Mix
References
Company Overview of Yves Saint Laurent SAS. (n.d.). Retrieved November 20, 2018, from https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=6490488
Holgate, M. (2018, February 13). How Anthony Vaccarello Is Making Saint Laurent His Own. Retrieved November 20, 2018, from https://www.vogue.com/article/anthony-vaccarello-interview-vogue-march-2018-issue
Kering 2017 Integrated Report (pp. 2-24, Rep.). (n.d.). Retrieved November 20, 2018, from http://www.kering.com/sites/default/files/document/2017_kering_integrated_report.pdf
Mauriès, P., & Liccini, L. (2017). Yves Saint Laurent Accessories. Berlin: Phaidon.
Mower, S. (2018, March 15). Saint Laurent Fall 2018 Ready-to-Wear Fashion Show. Retrieved November 20, 2018, from https://www.vogue.com/fashion-shows/fall-2018-ready-to-wear/saint-laurent/slideshow/collection
Saint Laurent Online Store. (n.d.). Retrieved November 20, 2018, from https://www.ysl.com/us/Help/LegalArea/SupplyChains
STRATEGIC MARKETING PLAN 2014 SAINT LAURENT. (2014). Retrieved November 20, 2018, from https://chloestudd.files.wordpress.com/2013/10/marketingplanfinal1.pdf
Zhang, D. (2014, March 11). Saint Laurent Strategic Marketing Plan. Retrieved November 20, 2018, from https://issuu.com/feifeifeiwu/docs/semester_5_saint_laurent_strategic_