Company Analysis- Assignment 1 PDF

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Katie Percy 201711900 Assignment #1: Company Analysis Kering

Introduction Kering, one of the world’s largest luxury goods companies, employs more than 40,000 people worldwide and has annual revenues exceeding € 10  billion, is headquartered in Paris, France. Being the 6th ranking biggest luxury company globally, it allocates products and services through franchise boutiques, directly operated stores and wholesale partners and retail channels. Possessing a portfolio of about 15 brands such as Gucci, Saint Laurent, Balenciaga and even Puma, places it under the business sector of luxury fashion, lifestyle and retail.

Discovering Kering and Its History Founded in 1963 by Francoius Jean Henri Pinault, the luxury giant Kering originally known as Estbalissements Pinault, was initially British but grew by use of acquisitions and became a well-known national company in France. The company in its beginning years specialized in timber trading and construction materials, but today is known as one of the biggest luxury holdings in the world. Kering expresses the idea of creativity, being the key to bold and contemporary luxury and expressing modern, authentic, and genuine luxury. Pinault stated the world is moving at an ever faster rate, and new generations of consumers bring on new expectations (Pinault). People want to profess their uniqueness in distinctive ways. Kering responded to this by offering products that would enable everyone to express his or her individuality (Kering). This world renown company continues to express empowering imagination through their innovative environment and holds consistent financial execution across its brand houses. Kering is extremely successful due to its large geographical spread and well-developed distribution channels.

Where did they go wrong? Like any company, Kering also holds its faults and weaknesses in the luxury market. The headline making investigation in 2017 of allegations of “Ongoing Tax Evasion Probe” resulted in a $1.4 billion unpaid tax bill for the Italian tax authorities. This financial crime was described as being investigated over salaries they received from companies in Switzerland for work done for Gucci in Milan (The Fashion Law). As well as allegations and controversy of racists ads and racism towards employees, which can ultimately harmt a company and brand's reputation. In this particular case with one of Kerings major subsidiaries, Alexander McQueen, hit with their 3rd discrination lawsuit from 2 African-American employees claiming the company “engaged in systematic racism” towards them and that it “systematically rejects African-American job applicants who seek positions on the sales floor where they can be seen by customers or positions where they might have authority over white employees” (Kim). Therefore it is evident that regardless of a company's ranking and the size it holds, they nonetheless can fall into some issues and failures along the way.

The Pillars that keep Kering standing Kering uses creativity as their main attributes in attracting customers as well as empowering imagination. By placing creativity as the heart of their business strategy, kering enables its subsidiaries to set their own limits in terms of their creative expression while crafting what the brand likes to call “tomorrow’s Luxury”. The company pronounces their name as “caring” a word that they also claim reflects how they think and build relationships with their customers, employees, subsidiaries and stakeholders. Kering uses a multi-brand business model, which entails marketing several of their similar products as competitors, each with their own individual brand name. This helps in securing greater shelf space for the company to limit rival companies and products. Within this model, Kering focuses on growing a powerful business with combinations of agility, balance and responsibility, while pursuing an ambitious strategy and a captivating vision that relies on creativity to produce bold, modern luxury (Kering). In an industry where growth became the norm, the goal for each of Kering’s subsidiaries is to outperform its market. This of course stems from the creative nature they all possess, which permits them to build customer loyalty and attract new customers, and achieving their potential by boosting the productivity of customer experience, commercial operations and the multiple

sales channel approach. However all of these amazing facts and ways this business got to where it is today, begs the question of what started it all? Aside from the founding of the company in 1963, Kering took its crown as a luxury powerhouse with a single purchase of a company named Gucci, in May of 1999 which created the domino effect from there on out of all the rest of Kerings subsidiaries.

Environmental and Societal profit and loss Kering makes known that giving their employees a chance to grow and realize their full potential is crucial while it isn't possible to perceive luxury as anything but sustainable and sensitive to the society and environment in which it’s committed to long term. More than ever, Kering focuses on its impact on the planet as a whole, climate change and natural resources. They keep an eye to the impact their company holds on the environment through regular examination of carbon emissions, water use and pollution, land use, air pollution and waste; this is called an environmental profit and loss account and is an innovative tool imagined by Kering to measure their environmental footprint (Kering).

Recommendations and Skills for the future Based on my findings on the luxury giant company Kering, without a doubt I can suggest small basic improvements, and one that could in turn cause a lot less uproar amongst people worldwide. It’s relatively impossible to not run into some form of obstacle when running a globally wide multi billion dollar company, however when it comes to basic human decency and human rights, the line has to be drawn regardless of the companies size, worth, and reputation. In regards to the racist argument and accusations towards both Kering owned company ad’s and Kering’s employees these allegations are the type that can ultimately run down a business significantly or totally and could have been easily avoided. Kering also needs to address its expansion and marketing issues through key challenges of meeting complex and highly ambitious sustainability targets along with weak market positioning in some areas globally, such as China. While Kering is expanding its online presence on par with other luxury industries, it is still much slower compared to other major online powerhouses like Amazon whose model can be replicated to fuel its growth. Only a few of Kerings subsidiaries like Gucci, Stella McCartney and Yves Saint Laurent were encompassing E-commerce, yet it was still limited to select

countries as low as 30 in numbers. However all things aside, Kering seems to uphold a respectable reputation. Reflecting on my own personable entrepreneurial skills, creativity and creative thinking is the one that strikes me the most relating to this company. Throughout my entire analysis I continue to tie in the fact that creativity is Kerings biggest attribute and strategy in the business world, creativity is the skill I can relate to myself the most. Creatively thinking and thinking outside the box has always proven to be an asset to me in everyday life, seeing that it can be such a large asset to others as well and has been a stepping stone to what made them the successful people they are today is truly inspiring more than anything. Another essential entrepreneurial skill that has also been deemed extremely valuable in the world of business is leadership. Through all of my findings on Kering, leadership has also been a constant skill and factor in the growth of the business, while my leadership skills are most certainly not as strong as my creative skills, I believe that creativity would be my strongest asset for a future entrepreneurial career. Creating a business as large and successful as Kering from the ground up is mind blowing to research, learn, and talk about and it’s without a doubt it takes a crazy hard working, dedicated and ultimately I believe a creative person to do so. I'm confident that I could definitely create my own company or organization with the skills and knowledge I possess, however I’m not confident to say I’d be able to run and create such a powerhouse of a company like Kering. As for business ideas, there seems to be only 1 large one that pops into my mind, being a larger and wider variety of products for different customers. While Kering does hold a wider variety of products then most, such as luxury items like watches, jewelry, and glasses it also produces sports and lifestyle related lines and items (Business of Fashion). Kering could widely benefit by identifying the leading internet shopping store to market & partner with them to enhance their only presence. This way the company can reach more consumers for its portfolio. A wider range of products and preview platforms could open up Kering’s market to a large influx of new customers and opportunities for new projects and experiences.

Conclusion Overall, Kering continues to be one of the prominent success stories in the global luxury market. It has been able to achieve multi billion dollar revenues, a huge world wide impact and following, all while growing and guiding small brands into its own portfolio. The luxury group manages renowned subsidiaries in fashion, leather goods, jewelry and watches all while sharing

and embracing their idea and company mission of creativity, diversity and self expression at its core. The level of skill, expertise and innovation the company possesses truly shines light on its name as a luxury giant.

References Martin Roll Company, Martin Roll Company. “Kering - Evolution Of A Global Luxury Brand Company.” Martin Roll, 3 Dec. 2017, martinroll.com/resources/articles/strategy/kering-evolution-of-a-global-luxury-brand-company. Disko, Kering. “Discover Kering.” Kering , 2020, www.kering.com/en/group/discover-kering/. TFL, TFL. “Kering Says Allegations of Ongoing Tax Evasion Probe Are ‘Nothing New.’” The Fashion Law, 24 Feb. 2020, www.thefashionlaw.com/kering-says-reports-of-ongoing-tax-evasion-probe-are-not-anything-ne w/. Kim, Gemma. “Alexander McQueen, Kering Hit With Racial Discrimination Lawsuit.” Fashionista , 11 Dec. 2015, fashionista.com/2015/12/alexander-mcqueen-racial-discrimination-lawsuit. Business of Fashion, Business of Fashion. “Kering.” The Business of Fashion, 2019, www.businessoffashion.com/organisations/kering....