Managing Brands and Organizations in the Italian Fashion Business: the Gucci Case study - University of Siena
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
!
Managing Brands and Organizations in the Italian
Fashion Business: the Gucci Case study
Prof. Lorenzo Zanni
University of Siena
Department of Business and Law
RELEVANT QUESTIONS 1) In terms of organizational structures and competitive strategies what can we learn from the Italian experience? 2) Considering fashion and wine business, what are the main strategic changes in the competitive scenario? How much is important “the Made in” effect? 3) In terms of communication strategies is it possible to underline some original “glocal” (global and local) solutions analysing the Italian experience? 4) Is it possible to focus the attention on some case studies which can explain the recent evolution? – The Gucci case study – The Chianti Classico and Antinori case study
OBJECT OF ANALYSIS
1) PECULIARITIES OF THE ITALIAN INDUSTRIAL SYSTEM
– The role of SME
– The industry specialization
– Industry location and the role of Clusters
2) SPECIAL FEATURES IN THE ORGANIZATIONS
STRUCTURE: THE NETWORK APPROACH
3) THE COMPETITIVE ADVANTAGE OF ITALY IN THE
FASHION BUSINESS
– Peculiarities of Fashion Business
– The competitive advantage of Italy in fashion: the new
scenario
4) THE GUCCI CASE STUDY
– The emergence of a large global player: Gucci Group
– The impact on the SME’s sub-contractors (the network)
I) PECULIARITIES OF THE ITALIAN
INDUSTRIAL SYSTEM (Onida 2004)
1) THE PREDOMINANCE OF SMALL FIRMS IN COMPARISON
WITH OTHER EUROPEAN COUNTRIES
• Recent data confirm the high number of firms in Italy
(entrepreneurial attitude)
• The predominance of micro-firms (less of 10 employees)
• The average dimension of the Italian manufacturing firms is lower
then in the other UE countries
• In the last decades the importance of micro-firms has reduced only
a little
⇓
The success of the “Made in Italy” during the 80’s and 90’s in the
international markets is mainly based on SME’s
Number of firms for 1.000 inhabitants
Number of firms in UE countries - Years 2001 e 2007 (a)
(for 1.000 inhabitants)
Countries 2001 2007
Chaka Republic 72,5 85,3
Portugal 48,5 81,7
ITALY 64,8 65,8
Sweden 51,3 61,3
Spain 54,8 60,4
Cyprus 52,8 56,7
Greece (b) …. 55,8
Hungary 53,8 54,6
Luxemburg 47,2 50,9
Slovenia 65,6 49,7
Lithuania 16,6 41,1
France 32,4 40,3
Belgium 36,9 40,0
Poland 37,1 38,9
Denmark 36,7 38,9
Estonia 21,6 35,9
Austria 26,0 34,6
Bulgaria 30,5 33,7
Holland 29,8 33,0
Leetonia 15,3 31,3
United Kingdom 25,2 27,4
Finland 35,4 23,5
Germany 20,0 22,1
Romania 13,6 22,0
Source: Eurostat, Structural Business Statistics Ireland 18,5 22,0
a) Malta: not available. Slovak 6,9 11,1
b) 2001 data not available. Ue27 36,2 41,4
2) THE ITALIAN INDUSTRIAL SPECIALIZATION IN MATURE
OR TRADITIONAL INDUSTRIES
• The Italian market share in the UE are strong in “light industries”
characterized by firms with small dimension (mechanics, textile,
clothing, furniture, shoe and food industry) (Tab. 1-2)
• The Italian industry is traditionally “export oriented”: in 2015 Italy
is the ninth country in the world in terms of export (2,7%)
• Italy is still the eight more industrialized country in the world in
terms of GNP (2014: IMF data). But in the last few years Italy is
loosing part of its competitive advantage in the international
markets in terms of market shares
⇓
Italy is now facing the concurrence of less industrialized countries.
It is interesting to describe how some Italian firms are defending and
sometimes even enlarging their market shares
Industry specialization
Tab. 1: The main actors of the Italian export (source Istat 2014, p.71)
Type of firm Number of firms Export (in value)
Small (less 50 employees) 99,4% 18,3%
Medium (50-250) 0,5% 28,6%
Large (+ 250) 0,1% 46,0%
ITALY'S COMPETITIVENESS ACCORDING TO THE TRADE PERFORMANCE INDEX UNCTAD/WTO
Year 2012
(billion dollars)
Position of Italy
in the Ranking of Value of
Sectors T rade Italy's Italy's Net T rade
Performance Export
Index
CLOTHING 1 16.5 2.2
LEATHER PRODUCTS 1 20.7 11.2
TEXTILES 1 12.2 4.5
NON-ELECTRONIC MACHINERY 2 84.8 53.0
BASIC MANUFACTURES 2 53.9 12.0
MISCELLANEOUS MANUFACTURING 2 39.0 11.5
ELECTRONIC COMPONENTS 3 23.2 2.7
PROCESSED FOOD 6 28.6 5.2
T OT AL 8 BEST SECT ORS 278.9 102.3
Source: compiled by Fondazione Edison on data from International Trade Centre, UNCTAD/WTO
The impact of the crisis in Italy:
2009-2015
Problems in the domestic market, but strong export capability
Years GNP Export
(Source Istat) (Source MISE)
2009 -5,0% -20,9%
2010 +1,7% +15,6%
2011 +0,4% +11,4%
2012 -2,4% +3,8%
2013 -1,9% -0,0%
2014 -0,4% +2,2%
2015 +0,8% +3,8%The importance of export for Italian national growth
3) THE INDUSTRIAL SPECIALIZATION INFLUENCES THE
TERRITORIAL DISLOCATION OF THE ITALIAN FIRMS
At geographical level the process of industrialization in Italy has not
been homogeneous: in emerges a “Leopard-skin” Italian
process of development with three main geographical areas
(Picture 1)
⇓
• North of Italy: large firms predominance, the “company-town” model
• South of Italy: the failed effects of the State action (“Intervento Straordinario
nel Mezzogiorno”) → the creation of “cathedrals in the desert” → they did not
create other industries around their activities, neither they generated a spin-off
effect of entrepreneurship
• “Third Italy” (Central and North-East of Italy): predominance of small firms
localized in industrial districts
→ Definition of industrial district: “social-territorial entities characterized by
the active presence in a concentrated area of a community of people and a
group of industrial firms” (Becattini 1989)
→ industry specialization and productive decentralization
→ external economies linked to the cultural heritage (A. Marshall)
→ in these regions there are more network organizationsPicture1 - manufacturing labor local systems in Italy (Istat 2015)
THE ROLE OF CLUSTERS
“Clusters are geographic concentrations of interconnected companies, specialized suppliers,
service providers, and associated institutions in a particular field that are present in a
nation or region. Clusters arise because they increase the productivity with which
companies can compete” (Porter 2001).
⇓
Instead of examining firms as isolated actors, the cluster-based analysis emphasizes the
linkages among companies and supporting institutions and the synergies related both to
cooperative and to competitive behaviors of belonging enterprises
⇓
Porter (2003) claims that clusters have the potential to affect competition in three ways:
• by increasing the productivity of the companies in the cluster (efficient access to specific
inputs, employees, services, information and public goods; facilitate coordination and
transactions among companies; good diffusion of best practices)
• by driving innovation in the field (enhanced ability to perceive opportunities; share of
knowledge creation processes; exploitation of local resources)
• by stimulating new businesses in the field (high visibility of business opportunity;
commercialization of new and complementary products; starting of new companies)
⇓
Their relevant importance of industrial district in Italy (Istat 2015) :
• 141 in all Italy (130 specialized in Made in Italy products: 92,2%)
• 25% of workers in manufacturing industries
• 26,3,5% of total export (year 2012)II) ENTREPRENEURSHIP AND ORGANIZATIONS
STRUCTURE: THE NETWORK APPROACH
- The predominance of external growth processes (alliances vs.
internal growth)
- Different entrepreneurial profiles: “general and serial
entrepreneur” (Mc Millan) vs. “limited and diffused” entrepreneurship
↓
1. Different definitions of “Network” in the managerial literature
• The totality of all the units connected by a certain type of
relationships (Aldrich and Whetten)
• An aggregate of relations existing among individuals (or “units”
or “members” or “nodes”) (Kaneko and Imai)
• Our point of view: an heterogeneous aggregate of firms, linked by
multi-faceted and cooperative relations, organized around a focal
firm and instrumental in achieving at least partially common
objectives (Lorenzoni, 1990)2. Main Characteristics of Network
- Advantages for leading firm: quality; innovation; more flexible production and
shorter production runs; not necessarily a dimensional growth
- External firms: a semiautonomous position (dependent for certain parameters);
independently owned and not exclusively dependent on the focal firm for
business
- Different links among the partners of the network:
- strong relationships: the focal firm can influence the external firms with a
“non-hierarchical power” (non conventional mechanism of coordination,
equity or non equity) using: trust among partners; reciprocity; mutual
adjustment; multiple line relationships (horizontal, vertical, lateral)
- weak relationships: among external firms (without intermediation of the
focal firm)
- The process of innovation in a network organization: interplay among different
partners (see Japanese literature); even small firms can innovate; some obstacles
for innovation in Italy (difficult access to funds and to information)3. Different types of networks (see Picture 3) • Different stages of evolution from informal relationships to planned networks. During this evolution it emerges: a higher level of systematic activities; changes in memberships; a more deliberate consciousness in the patterns of the inter-company relationships; • At the beginning: strong influence of the focal firm • Later: mutual relationships; less coordination functions and more strategic crossroad of the information flows
Picture 3: Different types of networks – a possible evolution
a) Simple and informal constellation
b) Planned and formal constellationIn brief, NETWORK ORGANIZATION: 1) ALLOW TO REACH SOME PECULIAR ADVANTAGES - Time savings - Quality improvements - Innovation - More flexible production - Reduction of costs (external growth) 2) IS CHARACTERIZED BY DIFFERENT RELATIONSHIPS AMONG THE PARTNERS - Equity - Non-equity 3) HAS A WIDE APPLICATION VERSATILITY - Research & Development - Marketing and distribution - Financial - Coupling different networks
III) THE COMPETITIVE ADVANTAGE OF ITALY
IN THE FASHION BUSINESS
(Porter 1990; Saviolo-Testa 2000)
• The importance of Italian clusters in the fashion industry: a national
system of value which allows to control different stages in the
whole filiera (see Picture 2)
• Creativity combined with functionality
• High quality in small scale production (craftsman)
• Flexibility (division of labor and specialization)
• Demand pull innovation (Italian clients are very exigent)
• Original market segmentation (houte couture, prèt à porter,
diffusion, bridge and mass)
⇓
The emergences of a new scenario for the Italian fashion business:
– Market changes and new factors affecting the “Made in Italy”
– Difficulties in the export capabilities of fashion industry
– Italian clusters are good incubators of new entrepreneurship but
they do not help the dimensional growth of the firmsPicture 2: The Fibres-textile-apparel filiére
Fibres R&D, raw materials supplying, fibers
Industry (natural and processing, fibers marketing
man-made)
Greige goods yarn Yarn spinning (spun yarns and filament
mills yarns)
Fabric construction: weaving, knitting,
embroidering, or processing solutions
Textile mills (e.g., films, foam) or directly fibers
(e.g., felt, nonwoven fabrics)
Equipment
producers/
suppliers
Finishing treatments: bleaching,
Converters shearing, brushing, embossing, dyeing,
glazing, crinkling, printing, etc.
Service
suppliers
(trend Supplier/buyer intermediation,
forecasters, Selling/buying
agents communication
fashion
press,
consultants,
etc.)
Cutting, trimming, spreading, bundling,
Apparel sewing, sticking, pressing, packing
manufacturers
Wholesalers
Time and space transformation,
communication, services
Retailers
End users Evaluating, purchasing, innovating,
communicatingFashion Market segmentation in term of price
• Houte couture
• Prèt-à-porter
• Diffusion
• Bridge
• Mass marketIV) THE GUCCI CASE STUDY
a) The Gucci case history
b) The communication
c) The Future: opportunities and risks
d) The organization: Gucci network strategy
(sub-contractors)a) Gucci: a brief case history
1921 founded by Guccio Gucci in Florence, the son of a leather craftsman with a cosmopolitan
culture. It was a small luggage and saddlery company where he sold exclusive leather goods
created and produced by the best craftsmen he could hire.
1938 Within a few years, the small Florence shop grew and attracted a wide clientele base. A branch
was opened in Rome
1947- Creation of the "bamboo handle handbag", which later became one of the company's icon
1953 products. Introduction of the sons in the business (second generation in the family business)
1953- Death of the founder. The 4 sons have the control of the company.
1969 Company growth and commercial internationalisation (stores in London, Paris, New York,
Palm Beach, Hong Kong). Linkages with Hollywood actress and other important testimonials
(Jackie O shoulder bag)
1982- In 1982 Gucci became a s.p.a.: the third generation has the control of the company; difficulties
1995 in managerial strategies. In 1989 the Anglo-Arab Investorcorp acquired the 50% of shares. In
1993 all the shares are acquired by Investorcorp
Begins a turnaround strategy managed by Domenico De Sole (Chief executive officer of Gucci
Group) and by Tom Ford (design and style manager): repositioning of the brand in the luxury
market; focalisation of the business in leather, accessories and apparel industry
1995- In 1995 Gucci Group was launched as became a publicly traded company, listing on the New
1998 York and Amsterdam stock exchanges. It issued further shares in 1996.
Decentralization of production in the local system (mainly in Tuscany): internal activities
specialised in design, marketing and logistics. High investment in communication. Direct
control of distribution and new openings (174 monobrand shops at the end of 2002).1998- The firm was named "European Company of the Year 1998" by the European Business Press
1999 Federation for its economic and financial performance, strategic vision as well as management
quality
In 1999 it launched a "strategic alliance" with the French group Pinault-Printemp-Redoute
(PPR). At the beginning. PPR owns 68% of the group
2000- Growth strategy (brand extension and takeovers at international level). Actually Gucci Group
2003 had whole or partial interests in 3 main business area and in the following companies or brands:
Fashion: Gucci (100% share of ownership, also watches 100%); Yves Saint Laurent (100%,
also perfume brand 100% and watches brand 100%); Sergio Rossi (70%); Bottega Veneta
(78.5%); Alexander McQueen (51%, also perfume brand 100%); Stella McCartney (50%, also
perfume brand 100%); Balenciaga (91%)
Perfume: Roger & Gallet; Boucheron (also jewellery and watches); Ermenegildo Zegna; Oscar
del la Renta; Van Cleef & Arpels; Fendi
Watches: Bedat & Co (85%)
Since the turnaround of the mid-1990s Gucci has continued to prosper (4.000 employees) and a
highly profitable business operation.
The Gucci brand is considered one of the most frequently mentioned brands (in 2003 n.53 in the
world in the Interbrand global ranking).
2004 PPR owns the total control of Gucci: a new CEO (Robert Polet) and 4 new young style
directors. New partnership with unions and retailers for reaching the Social Accountability SA
8000 and 14.000 (ethical label)2005- In 2005 Mark Lee is CEO Gucci Division
2007
Roger Polet is Chairman and CEO Gucci Group, the world’s third largest luxury group.
Coming from Unilever, bringing considerable global management experience and in-
depth knowledge of the development of consumer brands in a multicultural environment
In 2007 the Group’s business grew by 15% in terms of sales and by 40% in terms of
EBITA. Frida Giannini is Creative Director of Gucci Division
2008- The Group balance a well defined portfolio brands with 8 clearly identified brands: 3 are
2009 the engine of the growth (Gucci, Bottega Veneta, YSL), Boucheron offers
complementary expertise in few segments (jewellery, watches), 4 cutting-edge brands
with high potential for long-term growth (Balenciaga, Stella McCartney, Alexander Mc
Queen, Sergio Rossi)
Controlled development of an integrated distribution network: the Group directly
operates 560 stores in major markets throughout the world and wholesales products
through franchise stores, duty-free boutiques and leading department and specialty
stores
Strategic partnership with Soeind Group (Swiss group, luxury watches)
YSL Beauté is sold to l’Oreal (but remains a partnership); Bedat & Co is sold
In 2008 Gucci generates 2,206 million Euro in revenues (+4,2%) and 625 million Euro
in operating profits (-3,4%). The incidence of leather goods on total sales was the
55,3%, followed by shoes (15%) and clothing (14,3%).2009 In 2009 Patrizio di Marco is the new CEO Gucci Division: his main goal is to balance
the unique tradition and the historical exclusive values of the brand in perfect
equilibrium with fashion and trend soul
In 2009 Gucci generates 2.266 million Euro in revenues (+2,7%)
Gucci has more than 7.000 employees and other 7.000 work in the regional induced
activity. Gucci manufactures all products in Italy and licenses the production and
distribution of eyewear and perfumes. Through Gucci Group Watches, located in
Cortaillod (Switzerland), the company also assembled and distribute in all the world
Gucci brand timepieces, combining outstanding Swiss craftsmanship with modern
design aesthetics
2010 February 18th: Alexander Mc Queen died. Gucci Group confirmed its commitment to
continue with the brand and has provided all logistical, financial and human support to
the Alexander McQueen team. In March 2010 Sarah Burton has been appointed
Creative Director of the brand (supervision of the creative direction and development
of all collections)
In 2010 Gucci turnover was 2.666 million Euro (+17%) with a significant profit growth
(+22,9%). Gucci recorded further strong growth in emerging markets; Asia-Pacific is
becoming the main market area for the brand.
The Gucci brand’s retail network comprised 284 stores (92 in emerging countries).2011- Gucci main values: “exclusivity, quality, made in Italy, Italian craftsmanship, design
2012 leadership in the world of fashion”.
Strategic positioning: perfect balance of modernity and tradition, innovation and
craftsmanship, trendsetting and sophistication.
Craftsmanship and Made in Italy: strong linkages with the territory; 100% Made in Italy;
45.000 workers in all Italy; the project “artisan corner” in the shops; the project “made to
measure”
Support in the creation of 3 “Network contracts”: Gucci has sponsored the birth of 3
networks contracts to improve innovation, efficiency in the value chain, economy of
scale, facilitate credit access: 1) P.re.Gi. Network (7 firms, leather goods artisan; 11 mil.
Euro turnover); 2) Almax Network (8 firms, bags producer, 20 mil. Euro turnover, 300
employees); 3) F.a.i.r. network (9 firms, accessories and leather; 45 mil. Euro turnover,
200 employees)
Eco-friendly initiative for the environmental impact reduction of the firm activities
Innovation: Launch of the new collection in the kids market all made in Italy.
Opening of the Gucci Museum (Icon Store, Library and Gift Shop, Coffee and Restaurant)
Selective Retail strategy: 317 shops worldwide (they realized the 73% of the Gucci
turnover, the other 27% distributed in selected retail stores)
Economic Performance: In 2011 Gucci turnover was 3.140 million Euro (+17,7%) with a
profit growth at group level (+26,4%). In 2012 Gucci turnover was 3.639 million Euro.
The network of subcontractors: 750 direct supplier, 1500 subcontractor, 45.000 employees
The Luxury Group: change of the name of PPR Group in Kering2013- Economic Performance: In 2013 Gucci turnover was 3.561 million Euro (-2,1%)
2014 with a profit growth (Ebitda 35,8%). The composition of turnover for business
area is: 58% leather goods, 14% shoes, 11% clothing, 5% watches, 2% jewellery,
10% other products.
Investment in correlated business: in 2013 Gucci group acquire Richard Ginori an
historical porcelain firm based in Florence
Changes in Management Team: In 2014 Gucci turnover was 3,5 million Euro
(-1,8%). At the end of 2014 the Ceo P. De Marco and the Creative Director Frida
Giannini where both substitute: the new CEO is Marco Bizzarri (ex CEO Bottega
Veneta), the new creative director is Alessandro Michele (Leather goods director)
Strategic positioning: reduction of wholesale point of sales (indirect channels)
and increase of direct retail store. Pushing to the top of the luxury market the
Gucci positioning (upgrading); in Spring 2009 the turnover of the bags collection
was: 32% entry price, 48% medium segment; 18% high market; 2% top; in
Winter collection 2013-14 the figure are respectively 2%, 47%, 48%, 3%.
Craftsmanship and direct investment in the “Made in Tuscany”: continue the
strong linkages with the territory; 7.000 workers in the regional network. Key
words for manufacturing investments: efficiency, flexibility, specialization. In
2014 Gucci invested 21 million for a new manufacturing plant near Florence
Improving the “Network contracts”: from 3 networks contracts to 12 networks;
97 small and medium size firms are involved; 1.500 employees in the networks;
social responsibility and ethical code are compulsoryCraftman-ship:
past and present
with the project
“artisan corner”
inside the stores
New Management
and Creative
Director:
from Frida Giannini
to Alessandro
Michele
(focus on fashion and
creativity; more
attention to young
consumer)
!2015: the economic performance have been influenced by the devaluation of Euro currency. +3,7% turnover in the first quarter at present currency exchange (but is -7,9% if is constant currency exchange)
• Kering Group announced the resurgence in popularity for its Gucci brand. Gucci
sales rose 13% in the fourth quarter 2015. The return to growth was driven by:
– directly operated stores in mature and emerging markets.
– “the brand's new creative vision” which has been enthusiastically received by the
trade press and customers
• 2015 Kering Group Key figures
– Sales growth +15.4% to €11,6 billion ($12.8 billion) from the previous year.
– Number of directly operated stores: total 1,264 (Emerging Countries 491;
Western Europe 326; Japan 237; North America 210)
– Brands: Luxury Division (17: Gucci, Bottega Veneta, Saint Laurent, Alexander
McQueen, Balenciaga, Brioni, Christopher Kane, McQ, Stella McCartney,
Baucheron, Dodo, Girard-Perragaux, Jeanrichard, Pomellato, Qeelin, Ulisse
Nardin), Sports&Life Style (3: Puma, Volcom, Cobra)
• 2015 Gucci Key figures:
– Revenues € 3,898 million (+11,5%). Recurring operating income € 1,032 million.
– 525 directly operated stores (218 in emerging markets); 10,570 Employees.
– Revenue per category (leather goods 57%, Shoes 14%, ready to wear 11%,
watches 5%, Jewelry 2%, other 11%);
– Revenue per region (Western Europe 26%, North America 22%, Japan 10%, Asia
pacific 35%, other countries 7%)The new scenario in Asia.
• Basically the huge anti-corruption and anti-extravagance campaign led by
President Xi Jinping has transformed China's burgeoning luxury-goods sector
forever. Luxury goods have become less accessible to the growing Chinese
middle class and less acceptable for members of China's elite.
• Still, Bain & Company's 2014 China Luxury Market Study, which was
released at the beginning of last year, showed that China’s luxury goods
industry accounted for 29% of the global market. So being able to grow a
luxury brand in this environment is a big deal.
• "These results come amid a more complex economic and geopolitical
environment, accentuating the shifts taking place in our sector," François-
Henri Pinault, chairman and CEO of Kering, said in a statement. "We are
entering a new phase in our growth: We are perfectly positioned to leverage
the strength of our brands and maximise value creation over the long term”.
ê
• Gucci Sales growth 2016: € 4,378 Million (+7,7%)
• Kering Group sales growth 2016: € 12,385 (+6,9%)New products • Gucci has completed its transition to the geek-chic aesthetic introduced by Michele following his appointment in 2015 • introduction of the new styles in all categories (no-gender) New comunicaton strategies • https://www.gucci.com/it/it/st/stories • E-commerce + 86% Gucci sales 2017 • Gucci Sales growth 2017 (first semester): +43% • Recurring operating income 2017 (first semester): +70% (€ 907 Million) • Revenues 2017: € 2,83 million (First semester)
b) Different communication levers of the
world Gucci
a) The shops
b) The products
c) The advertising
d) The web site: http://www.gucci.com
e) Gucci museum: http://www.guccimuseo.com/en
f) Gucci and the Arts (exhibition, cinema, events)• The shops – direct control of distribution – internationalization of distribution – Flagship stores (in the photo Seul FS) • The new products: icon products (the new Bamboo bag) • The Gucci Digital Flagship Store • The Gucci Museum in Florence
c) THE FUTURE: OPPORTUNITIES AND RISKS • The Gucci case history is a good example of leading firm that was able to overcome family succession problems and to develop “a glocal strategy”. Its local network shows high capability to support the crisis. • The opportunities of globalization (new rich people in Asia) with new personalized products and services: – made to order handbags; – accessories personalized; – made to measure • Future challenges are approaching (in 2009 De Marco said: “at 1 billion Euro it’s easy to remain Made in Italy, at more than 2 billion it’s much more difficult!” (the opportunities of manufacturing “reshoring” with the devaluation of Euro currency)
d) THE INFLUENCE OF LEADING ACTORS ON THE SME’S SUB-CONTRACTORS (THE NETWORK) • Growth of the local network (see table 1): small and high qualified firms (luxury supplier) while firms specialized in mass markets are increasingly reducing • Higher selection of local supplier: acquisition of some supplier (see table 2) and opening the relationships outside the local system • Differentiation of supplier and of local network relationships (see picture 4): in the case of Gucci we can find around 9 partner supplier (co-development partnerships); 13 sub-contractor (integrated relationships); 30 simple supplier (market relationships) • Not simple “predator” strategy: in some case the relationships imply a transfer of knowledge above all in the partner supplier (see table 3). • Weakening the autonomy of SME’s: network hierarchization (less market knowledge, less projectual role) (see table 4).
Table 1: Changes in number of employees in the local unit in the
period 1991-2001 (in %) (Source: Istat)
Industries Tuscany Italy Prov. Arezzo
Textile - Clothing - 21,8 - 26,1 - 40,3
textile - 17,3 - 23,4 - 34,8
clothing - 29,1 - 28,8 - 42,4
Leather and shoes - 2,1 - 15,4 25,1
leather 22,2 - 22,3 146,0
shoes - 13,4 - 17,5 - 4,8
Other industries - 4,1 0,2 18,5
gold 16,4 5,6 25,6
Fashion Industry - 15,1 - 23,7 - 24,9
TOTAL 4,7 8,0 7,4Table 2: Acquisition of small-medium firms in the fashion industry in Florence by leading firms
Buyer Firm acquired (comune) Year of
acquisition
Celine (LVMH) Marcus (Impruneta – FI) 1994
Nd
Dior Mardi (Scandicci)
2000
Gruppo Dolci Gherardini (Scandicci)
Mariella Burani Braccialini (Pontassieve) 2000
2000
LVMH, Pucci (Firenze)
2001
LVMH Fendi (Bagno a Ripoli - FI)
2001
Gucci Conceria Caravel (Fucecchio)
2002
Gucci Calzaturificio Tiger (Monsummano Terme-PT)
Gucci Calzaturificio Creazioni Bartoli (Monsummano T.-PT) 2002
2002
Gucci Calzaturificio Paoletti (Pistoia)
2003
Gruppo Dolci Pelletteria Only Leather (Scandicci)
2003
Gruppo Dolci Nuova FGF- minuterie metalliche (S: Piero a Sieve)
Trussardi Pelletteria Zetati (Bagno a Ripoli) 2003
Gucci Conceria Blutonic (S. Miniato) (51%) 2004Picture 4: Network structure: relationships between SME and leading actors in Florence-Arezzo leather cluster IRPET Istituto Regionale Programmazione Economica Toscana
Table 3: leather/shoes firms in Florence and Arezzo which have increased the following
factors (%)
Total
a) Product portfolio 58
b) Plant dimension 51
c) Number of employees 46
d) Employees’ competences 76
e) Total revenues 71
f) Earnings margin 53
g) Number of supplier 32
h) Number of clients 19
Table 4: changes in leather/shoes firms due to cooperation with leading firms (%)
Type of change Total (%)
a) I have changed product 13
b) I do not use my own brand any more 24
c) No more design 17
d) I have introduced new technologies 50
e) I used new materials 36
f) Outsourcing of some phase of production 52Tab 5: Ranking of the first 20 Italian industrial districts (*) (*) Variable Considered: Number of firms; employee; export; value added; turnover
CONCLUSIONS • SME companies continue to play an important role in the international business, but the new competitive scenario obliged them to change their strategies and firm structures • Network organizations are only a small piece of the Italian puzzle, but they are important to understand the process of entrepreneurial development in certain area of the country • The Made in Italy continue to represents a source of value (some American distributors recognize the 17% of premium price to Italian products), but the new competitive scenario obliged the firm to change their strategies • At the moment the Italian fashion cluster are facing new competitive challenges that will probably change some of their original characters (it becomes strategic the role played by leading firms; increasing role played by advanced services) • More researches are needed to understand better the nature and the evolution of network organizations (key variables, stages of evolution, competition, etc.). Only the future will tell us if network organizations will continue to be important or will move into some new consolidated forms (medium or large firms, small transnational groups) • The Gucci case history is a good example of leading firm that was able to overcome family succession problems and to develop “a glocal strategy”. Its local network shows high capability to support the crisis, but future challenges are approaching
REFERENCES • Bacci L., a cura di, (2004), Distretti e imprese leader nei sistemi moda della Toscana, F. Angeli, Milan. • Fondazione Edison & Symbola (2009), Italia. Geografie del nuovo Made in Italy, may. • Istat (2012), Le esportazioni dei prodotti dei sistemi locali del lavoro, April, Rome. • Onida F., (2004), Se il piccolo non cresce. Piccole e medie imprese italiane in affanno, il Mulino, Bologna. • Porter M. (1990) The Competitive Advantage of Nation, New York, Free Press. • Porter M. (1998), On Competition, Boston, Harvard Business School Press. • http://www.gucci.com/uk
You can also read
