chapter 9 271the luxury fashion business strategy modelthey are, what factors influence their buying decisions, what their expec-
tations are and what their future evolution is likely to be.- An exhaustive analysis of the competitive market, i.e. identifying the
company’s competitors, where the company stands relative to the competi-
tors, what the strategies of the competitors are and what changes are likely
to affect the competitive environment. - An evaluation of the connected facets of the company such as its manu-
facturers and suppliers, alliances, partners, associations, trade relations and
investors. The factors connected with these groups that will likely affect
the business should be identified.
The final assessment aspect of the current situation involves the external
environment, whose features include the following:
- A comprehensive analysis of the socio-cultural environment and how it
currently affects or is likely to affect the business. This involves tracking
societal trends and evolutionary factors such as the influence of culture,
globalization, advanced technology and international travel on the global
consumer society. - An evaluation of the economies of the markets where the company oper-
ates and how the economic performance affects consumer responses to
the company’s products. The key connecting issues here would be related
to the average disposable income of consumers, the gross domestic prod-
uct (GDP) of the economy, the rate of inflation and deflation and the level
of consumer credit, borrowing and expenditure. These features often
affect the buoyancy and spending attitudes of consumers towards luxury
goods. - A thorough analysis of the political and legislative climates of the markets
where the business operates. This includes the stability of the governmen-
tal structure and their influence on consumers and retail activities, through
legislation regarding commerce. This factor affects consumer confidence
and attitude towards luxury goods. - An exhaustive analysis of the technological factors, which are likely to
affect the company and its business. This includes advanced technology
systems of commerce and new communications media such as the internet
and digital television.
The identification of the environmental features above ought to be followed
by a re-evaluation exercise, which often spots further distinctive elements
that affect the business significantly. These are the elements that will be repre-
sented on the business strategy model.
Since the business strategy model is represented graphically, a shape has
been chosen for each feature of the level of the current situation analysis.