Progetto di Business Strategy per il brand Brunello Cucinelli

1. Business Strategy 2016/2017

2. In 1978 the initial core of a company was established driven by the desire
to create a different way of doing business in the twenty-first century.
Overview of the Company

3. It was to be based on a contemporary form of humanism that over the
years the international press has identified as a “humanistic” capitalism,
where profit can be sought without damaging mankind.
Overview of the Company

4. 1978
1500 Employees and 3500 subcontractors
400 mln
2000 - New Product Range
2012 - Stock Market Entry
Source: Brunello Cucinelli’s Web Site

5. Source: Brunello Cucinelli’s Investors Kit
North America
21 DOS
1 WHS
Monobrand
Italy 11 DOS
6 WHS Monobrand
Europe 27 DOS
18 WHS Monobrand
Greater China 16 DOS
3 WHS Monobrand
Rest of the World
6 DOS
1 Latin America,
5 Asia Pacific
8 WHS Monobrand
2 Latin America, 4 Asia Pacific 2 Middle East
Geographical Presence

6. Source: Brunello Cucinelli’s Investors Kit
Revenues by Distribution Network
Retail Monobrand Wholesale Monobrand Multibrand Channel

7. "Selling luxury goods is also about selling a way of life"
Current Strategy

8. Source: Brunello Cucinelli’s Web Site
Portfolio Strategy
Collections Business:
1 - Womenswear
2 - Menswear
Lifestyle Business
(e.g. desk accessories,
beauty, pillows)

9. Business Strategy: Product
Brand Value
Made in Italy
Top quality
Premium price

10. Business Strategy: Customer
Elegant
Luxury
Fashion
Values oriented
High Spending

11. Business Strategy: Key Resources & Key Activities
Key Resources
Multibrand & Department Store
Know-How
Employees
Key Activities
Selling
Design
Manufacturing

12. Business Strategy: Type of Competitive Advantage
Differentation
Unique Product
Brand Value
Premium Price
HIgh quality

13. Business Strategy: Type of Competitive Advantage
Number of Segments
Number of correlated Businesses
Vertical IntegrationGeographical Scope
Many
Many
One
One
Local
National
Global
Low
Medium
High
Cucinelli
Tod’s
Ferragamo

14. Current Results
"The fundamental principal is that the client comes before
profit."

15. SALES GROWTH
Economic Results: Sales Growth
Title
-9
-4.5
0
4.5
9
13.5
18
2014 2015 2016
-4.17
2.7
10.09
16.38
10.36
9.22
4.73
7.377.5
Tod's Ferragamo Cucinelli Zegna

16. SALES GROWTHRETURN ON SALE (ROS)
Competitive Results: Return on Sale
Title
-7.5
0
7.5
15
22.5
30
2013 2014 2015
9.29
1.26
-5.45
16.68
17.718.05
28.2
22.58
21.14 21.44
20.16
22.79
Tod's Ferragamo Cucinelli Zegna

17. SALES GROWTHRETURN ON EQUITY (ROE)RETURN ON EQUITY (ROE)
Competitive Results: Return on Equity
Title
0
12.5
25
37.5
50
2013 2014 2015 2016
8.31
17.75
10.09
16.4216.72
18.67
20.39
44.73
34.47
26.44
12.7512.17
15.38
Tod's Ferragamo Cucinelli Zegna

18. SALES GROWTHRETURN ON EQUITY (ROE)RETURN ON EQUITY (ROE)
Competitive Results: Return on Asset
Title
0
20
40
60
80
2014 2015
0.840.13
60.3
70.63
35.7
31.63
17.1715.16
Tod's Ferragamo Cucinelli Zegna

19. Competitive results
Positive sales growth compared to competitors.
Confirm and support long-term growth.
Economic results
ROA: Efficient and profitable assets, Brunello Cucinelli
is an outlayer.
ROS: Good profits generated through sales, less
efficient than competitors.
ROE: It tends to decline but stabilizes, due to diluted
ownership.

20. External Analysis
"I would like our products to speak of our land and
place of origin, while we strive to work with dignity,
tolerance and respect."

21. PEST Analysis
Political Factors
Low political stability, high taxes on work
and profit.
Economical Factors
Economic slowdown and low purchasing
power.
Social Factors
Popolation ageing, focus on sustainability
and trasparency.
Technological Factors
High barriers to entry due to raw materials
and technologies; distribution and
production are faster.

22. Value System
Raw Materials
Composition
Tailoring &
Design
Distribution
Education

23. The Five Forces
MEDIUM rivarly
with existing
firms
HIGH bargaining
power of
suppliers
HIGH threat of
substitutes
LOW threat of
new entrants
LOW bargaining
power of buyers

24. Suppliers (HIGH)
- Differentiation of Input;
- Cost of switching Suppliers;
- Suppliers Concentration;
+ -
- Cost relative to total
purchases in the industry

25. Buyers (LOW)
- Buyer Volume (bargaining leverage)
- Buyer information (bargaining
leverage)
- Substitutes products (bargaining
leverage)
- Product Differences (Price
Sensitivity)
- Brand Identity (Price
Sensitivity)
- Buyer Concentration vs Firm
Concentration (Bargaining
Leverage)
-+

26. New Entrants (LOW)
+
- Economies of scale
- Brand Identity
- Capital requirements
- Proprietary product
differences
- Expected retaliation
-
- Access to distribution
- Government policy

27. Competitiveness (MEDIUM)
- Exit Barriers (intensity)
+ -
- Concentration (Intensity)
- Industry growth (intensity)
- Diversity of Competitors (intensity)
- Brand Identity
- Fixed costs

28. Substitutes (HIGH)
+ -
- Buyer propensity
to substitute
N.D

29. Threats
Power of Suppliers
Social & Trasparency
Increase in labor costs
Opportunities
Online Market
New Product
Open Innovation
BO Analysis

30. “Economic balance is essential for every enterprise, but if
capital is important for development, the people who can
fully express their personality with their work and through
their work are all the more important: people are the soul
of any enterprise”
Internal Analysis

31. Competitive Advantage
Uniqueness
P.P < A.C. P.P > A.C.
Yes
No
Extra Costs

32. Business Model & Exclusivity
Brunello Cucinelli
Made in Italy,
craftsmanship and
product excellence
Exclusive
positioning and
distribution
Sustainable growth
and Healthy
profitability

33. Drivers
Economies of Scale
Internal and external linkages
Location
Economies of Learning
Vertical Integration
Discretionary policies

34. Value Chain
"I would like our products to speak of our land and
place of origin, while we strive to work with dignity,
tolerance and respect."

35. Value Chain
Outbound
Logistic
Marketing Services
Inbound
Logistic
Operation
Support
Activities
{ Firm infrastructure - Human Resources - Technology development -
Procurement

36. SW Analysis
Strengths
Made in Italy
Know How
Exclusivity
Quality
Weaknesses
Exclusivity (e.g. in distribution)
Low brand awareness

37. Prospect Strategy
"A company must plan for the next five years, but also
for the next five centuries."

38. Digital is not only a channel but an experience
enabler.
Digital World

39. Digital World
+ =
Human Digital
Improve Customer
Lifetime Value

40. Do it Yourself as strategic asset

41. Thanks for the attention.
Groupwork presentation made by:
Sara Carfagna (1014025)
Michele Papaleo (1013737)
Laura Pecora (1013654)
Noemi Pirazzoli (1013855)
Nicolò Raspanti (1014761)
Matteo Stefanoni (1013784)