Gucci Competitive Advantage

Bizzarri’s and Michele’s work was directed, not only to developed countries by regaining sales, but also to foreign exploitable markets, such as China. This consisted of a defense strategy by adaptation in the relatively new market, where fit with new market conditions was strictly necessary. In the last thirty years China and its trade have grown exponentially, making it one of the most powerful nations in the world. Currently it is the first exporter in the world, and second in terms of imports. Why did Gucci focus on the Chinese market? Gucci could leverage its first mover advantage, being one of the first luxury brands to start operations in China (1996), only after Rolex and Louis Vuitton (Booker, 2015). Since then, the Italian brand prospered

Gucci’s success story is valuable under many aspects, but first it is important to discuss about Gucci’s type of competitive advantage. Gucci’s competitive advantage lies in its unusual high quality, unique products, worldwide brand awareness and customer loyalty. For this reason, Gucci has a differentiation advantage, where customers’ willingness to pay is higher, paired with higher costs, compared to a reference offer. This differentiation advantage exists because Gucci’s offerings face higher costs to create a higher willingness to pay, given by a higher perceived uniqueness of the product. Gucci is successful in executing its differentiation advantage because it understands its core customer, knows what these customers value the most, improves product core features and over time adds or removes features according to changing tastes and preferences. To achieve and maintain this competitive advantage Gucci relies on several resources which can be subdivided in tangibles and

Its resources add value to the customer and thereby neutralize threats in the long-run by creating brand attachment. Gucci’s management and design are unique, providing high quality and fresh products. Its production and distribution processes are fundamental in the marketing and development of the brand. Finally, Gucci currently has a push approach on the consumer by directly engaging the buyer in the experience through all