1.

Situation analysis

1.1 Product market

1.1.1 Market size, grow up or not

Before decade, Kering gradually withdrew from the general retail industry and
refocused on the luxury goods market. Ten years ago, the Kering Group clearly stated its
goal of “creating value by focusing on luxury” and it still looks right now.
To be fashion and luxury good company, Kering SA operated in two segments in 2015:
luxury and Sport & lifestyle. In Figure 2, Kering corporate possess multi-brands, how
the firm drives the small brands growth rapidly is worth discussing. Seen Figure 1 (share
price), Kering SA has been fall to the bottom in 2009, to weather the storm they steady
growth, however whether Kering develop new operation to improve firm’s performance,
they need new strategy to close the performance gap between itself and LVMH.

1.1.2 Market share for the major competitors, degree of competitions intense
In 1999, PPR and LVMH fought for a war against GUCCI. Later, Kering completed the
acquisition of GUCCI in 2001. Today’s GUCCI has ability to aimed its spear at Louis
Vitton.
In Table A2, We can see Western Europe and Asia region had major revenue in 2014,
compare with Table A4, LVMH’s revenues by Asia 35.2% and Europe 29.4% , the two
company are making effort to developed in same regions.
LVMH is the major competitor, look at table A2 and table A3, compare with two
company’s sales items, LVMH process more kinds of products also their major is from
fashion and leather goods. So Kering’s target customers and sales creativity become
more important.

1.1.3 (Whether there is a) new trend for the market, demand side or supply side
From the viewed of expansion, Table 1 shown acquisitions and divestments that Kering
expend their market coverage on sportwear in 2007, some of operated brand joint online
businesses star from 2012.
In 2014, Kering integrated approach to eyewear comprising an internal value chain for
product development, supply chain management, brand strategy, and sales and
marketing, they control more efficiently on Product development and delivery time.

1.2 Industry analysis

1.2.1 Industry structure, and its major drivers which will determine the profitability
Seen Table 2, Kering group’s luxury division except Gucci were present significant
growth, especially Saint Laurent was growth rapidly. According current strategy,
Kering comprises a combination of organic and external growth, focus on innovative
product, refining existing lines, strengthening distribution channels, expansion of
directly-operated store, implementation e-commerce strategy and enhancing sales
performance. According to these strategies, they provide some practical method. They
present a group-wide approach to sustainability competitive advantage by offering new
business development opportunities, and helping to reduce costs or evoked
environment friendly.

Kering’s businesses are achieved through HR strategy which set up shared talent pool
targets the top 200 managers of the group that achieved talent development and
deployment.

1.2.2 Key success factor

Kering’s current strategy making itself become global well-known company. Kering
has top manager group, while integrated approach to eyewear comprising an internal
value chain received good results. To building brand value and brand identity, it is
emphasized that not only popular but also more historical, and nurturing other luxury
brands under the Kering.