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Luxury industry -Prada Case Study(li wenwen)

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This presentation analyses the luxury industry through the Prada group case. Also, point out some new trends in this industry especially the importance of China new rich purchasing power in luxury industry.

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Luxury industry -Prada Case Study(li wenwen)

  1. 1. Market Analysis of Luxury Industry Case of Prada Group Li Wenwen (I34030)
  2. 2. Outline I.Industry Background and Trends II.Prada Group Financial Statements III.Prada Group Brands’ Analysis IV.Competitors V.Challenges and Chances
  3. 3. What is Luxury goods? Luxury good make up a larger proportion of consumption as income rises. Characteristics: • Scarcity, (natural or artificial) • High price • Recognition of distinguished quality
  4. 4. Global luxury market nine segments Luxury Goods Worldwide Market Study | Bain & Company, Inc.
  5. 5. Luxury-spending trends 2014
  6. 6. Personal Luxury Goods
  7. 7. Overview • Facts: 70 countries; 556 directly-operated stores • Brands: Prada; Miumiu; Church’s; Car Shoe • Prada was founded in 1913 by Mario Prada in Milan.
  8. 8. Financial Statements
  9. 9. IncomeStatement
  10. 10. IncomeStatement
  11. 11. BalanceSheetAssets
  12. 12. BalanceSheetLiabilitiesandequity
  13. 13. Cash Flow
  14. 14. Cash Flow
  15. 15. Brands Analysis
  16. 16. Miu Miu unveiled 12 new DOS covering Far and Middle East, Europe, Japan and US and reaching a total number of 162 at July 31, 2014. At the same time the brand continued investing resources in the communication activities to enhancing its identity.
  17. 17. Miumiu- Total Net Sales (€mn)-9 months
  18. 18. Strategies
  19. 19. Competitors
  20. 20. Ratio Analysis Lvmh Moet Hennessy Louis Vui (MC) VS. Prada S.P.A.(1913)
  21. 21. LVMH: More than 50 brands. Such as LV, Dior, Givenchy, Marc Jacobs, Bvlgari 1700 stores
  22. 22. Challenges and Chances
  23. 23. Risk factors regarding the international luxury goods market • General state of the economy and international environment. • Protection of IPR • Brand image and recognition • Ability to anticipate trends and respond to the changing of customer preferences
  24. 24. Risks for Prada Group • Exchange rate fluctuations • Importance of key personnel • Outsourcing of manufacturing activities • Liquidity risk • Legal and regulatory risks
  25. 25. Gucci shoulder bag 82% + LV handbag 65% +  Grey Market Chanel: Cut Price in China Price Difference < 10% 20%- Mar.18th
  26. 26. The End
  27. 27. Bibliography 1. Luxury Goods Worldwide Market Study Fall-Winter 2014,Bain and company, Claudia D’Arpizio, Federica Levato, Daniele Zito and Joelle de Montgolfier 2. Luxury goods industry 2013, Stephanie So, Vanessa Yau, Richard Kan and Trevor Li. 3. Luxury goods report, HSBC Luxury goods team, Antoine Belge, Erwan Rambourg, Sophie Dargnies 4. Annual report 2011, 1012, 2013, Interim financial report 2014, Prada-group http://www.pradagroup.com/en/home 5. 3rd Quarter results as of October 31st, 2014, Milan, December 5rh, 2014, Prada-roup http://www.pradagroup.com/en/home 6. Consumer discretionary sector, textiles, apparel & luxury goods industry,Prada S.P.A; Lvmh Moet Hennessy Louis Vui (MC), Bloomberg business, http://www.bloomberg.com/ 7. The Wall Street Journal; Why Chanel’s Price Cuts in China Could Boost Its Brand http://www.wsj.com/

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