Ch. 2 - Strategic Planning for Competitive Advantage

Chanel is one of the biggest and most successful fashion leaders. What is it takes to get to this position? Well, a lot of different components. Strategic planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities. Chanel sells products for thousands of dollars, all around the world. One of the most famous one is the “Chanel Classic Flap Bag”. It is a perfect example of market development, what means attracting new customers to existing products. New fabrics and a little changes of the classical bag designed, attracting new customers as well as additional sales among existing customers bringing in new buyers. Chanel has been a very well established company for about a century now, the business mission is "to be the ultimate house of luxury, defining style and creating desire, now and forever." Marketers must understand the current and potential environment in which the product or service will be marked.

Performing SWOT Analysis allows firms to identify their competitive advantage.

Strengths:

·      High Quality Products

·      The strong image if the brand

·      Karl Lagerfeld as the Chief Designer

·      Well-trained management

Weaknesses:

·      The high price of the products

·      Limited production on certain products

Opportunities:

·      Usage of technology, apps and also increase marketing in social media

·      Stores all around the world including North and South America, Europe, Asia, as well as Australia

·      Expending to the countries with economic growth like China and India

Threats:

·      Facing strong competitors like LV, Gucci, and Prada.

·      Counterfeit goods and illegal production of the double-C logo.

Chanel is famous for the classic and timeless designs, especially of bags. Unfortunately not everybody can afford to shop at Chanel, but that is also one of the reasons why people want those products. Because is not reachable for regular working class, is associated with luxury and money, this is why a lot of women love it. Competitive advantage is a set of unique features of a company and its products that are perceived by target market as significant and superior to those of the competition. The main competitions for Chanel in the market are long-standing fashion houses like Gucci, Hermès, Louis Vuitton, and Prada. For example one of Chanel’s marketing strategic methods is to sell the cloths, luxury accessories only in the store, but fragrances and cosmetics are available for online purchase. Chanel spends millions of dollars to put together ready to wear fashion shows, and haute couture, which takes place in different parts of the world. We can see Chanel adverts in all high fashion magazines, and TV commercials. Usually in those ads are used famous models or sometimes celebrities. Chanel has about five ads in Vogue alone, advertising different products. From make-up, ready to wear collections, footwear to handbags. Each consultant who works at Chanel boutique has had previous training in Paris to learn the history of the brand as well as the products. This way each consultant can easily help any customer. Chanel operates with 310 boutiques around the world. Usually the shops are located in wealthy neighborhoods, shopping districts, luxury malls or airports. All of the products are the highest quality, but also high prices. They do not offer any sales, because they have high standards. Luckily all the products are accompanied with great customer service in every location. Even after so many years of the company, those products are treated like an investments, the value did not drop down. Those Chanel Classic Flap Bags even used and vintage are still worth it a fortune. 

"Fashion is not something that exists in dresses only. Fashion is in the sky, in the street, fashion has to do with ideas, the way we live, what is happening". -Coco Chanel