Gucci Firm Analysis

David Fishman October 20, 2008 MGMT 401 Gucci Business-Level and Corporate Strategy During the late 1990’s, Gucci portrayed the characteristics of a firm with a differentiated business-level strategy. Gucci provides value to their customers with high quality luxury goods which consist of unique product features in relation to their rival competitors. One example of Gucci’s distinct quality is the prestigious image of their brand name using the famous “GG” logo on their items. Gucci is a successful firm in the luxury goods industry with many resources and capabilities that differentiate them from other companies within the industry. The first resource is the management team of Gucci following the millions in losses during the early 1990’s. Two managers in particular are Dominco De Sole, head of Milan office, and Tom Ford who replaced Dawn Mello as creative director in 1994. The duo of Ford and Sole turned the company around from near-bankruptcy to a close rival with LVMH, the luxury goods powerhouse. The two of them possess an intangible resource to Gucci that is valuable, rare, inimitable, and non-substitutable. Ford and Sole are considered to be valuable to the firm because of their leadership and vision to make Gucci a global presence and rare because their management skills are unlike any other firm in the luxury goods industry. What makes the management team a sustainable capability is the difficulty for other firms to match their business strategy from financial decisions to marketing abilities. Another resource that Gucci has used to gain a competitive advantage is its glamorous fashion sense that captures consumers all over the world. This resource only has the valuable characteristic however its quality is very significant to the Gucci brand. It is not a sustainable advantage because competitors also use a brand logo to maintain a loyal customer base and the