Escada - Business Strategy

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Fashion Business Strategy Assignment
Unit Leader: Anna Watson
MA Strategic Fashion Marketing
Assem Ospanova – OSP10309007
DEC 2010

Fashion Business Strategy Assignment
Choose a fashion company, which is currently underperforming. Using the frameworks, models or concepts discussed in class, analyse why the company is struggling and suggest a strategy for the company that will help overcome its current difficulties. Consider the current and future implications of the macro and microenvironment.

Paper structure
Escada case analysis
* Opportunities and Threats through PESTEL analysis
* Strength and Weaknesses through RBV
Strategic choices
* Strategic clock
* Ansoff

Escada Group is a fashion company operating on the international luxury good market. It comprises two brand lines Escada and Escada Sport. The product offer consists of women’s apparel and accessories such as bags, shoes and small leather goods targeted to a high-end segment. Escada line is characterized by sensuality and modern elegance, meanwhile Escada Sport represents urban chic and young femininity. Both are synonymous of colours, distinctive details and refined quality. Escada Group has licensed products for eyewear, fragrances and kidswear (, 2010). The market presence covers more than 80 countries with around 1.260 points of sales. The products are sold in the company-owned stores, franchised stores as well as in selected multi-brand department stores. After declaring insolvency in August 2009 Escada Group was acquired by Mittal Family Trusts in November of the same year. Escada’s collapse follows years of management switches, design flops and a contracting luxury market that hastened the decline of the brand known for its bright colors and elegant evening robes. Today the company suffers from lack of brand identity among its core target (Mintel, 2008). The products are poorly received by customers. In addition Escada entered to many marginal markets damaging its image of exclusivity. The cause might is reconductable to a weak management in the company’s internal organization and to the lack of strategic and coherent coordination, which affected the corporate strategy and the general vision and determined the consequent instability on the financial side. A restructuring program is absolutely needed in order to consolidate the whole image of the brand and to build a sustainable strategic platform for the future.

This paper is aimed to analyze Escada’s strategic position in Germany, its core market, giving the current underperforming situation and to suggest a recovering solution in terms of strategic recommendations for long term perspective. The research will be based on information collected about the German luxury market and company itself through different resources. The analysis will take into consideration macro and microenvironment in which Escada operates according to different theoretical frameworks such as PESTEL, Porter’s competitive forces and the SWOT analysis. Once assessed the current strategic position of the German fashion house a set of strategic recommendations will be introduced to guide the company in achieving the competitive advantage over its competitors. This paper is structured in four parts: the first part inlcudes the theoretical frameworks that will be taken into consideration. The second part consists on the analysis of Escada’s underperforming areas and its strategic position according to the key theories discussed. The third part evaluates the different strategic recommendations that Escada can underpin in order to overcome the weak performance situation. And the last part is containing the conclusion of the paper.

To re-establish the relationship with its customers the recommendation is to focus on the core business and core markets. The image should be gained through ready to wear collection...
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