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Giorgio Armani SWOT & PESTLE Analysis

ID : 52611953| Sep 2020| 15 pages

COMPANY PROFILE -Giorgio Armani

Business Sector :Fashion Apparel and Accessories

Operating Geography :Italy, Europe, Global

About Giorgio Armani :

Giorgio Armani founded the Milan based fashion house in 1974. Born and brought up in Piacenza, Italy, he is the only chairman as well as the sole shareholder of this vast empire. Armani has a unique, opulent design which the elite class of the society finds very appealing. As of 2019, the signature label has expanded into 31 countries with about 250 brand stores and 7309 employees. It has several labels under its umbrella, like the AJ Armani Jeans, Emporio Armani, Giorgio Armani, Armani Exchange, which design, manufacture and sell products like wallets, jewelry, watches, clothes, etc. It aspires to create products that transcend fashion and aspire for perfection to its customers. As of 2019, the company is valued at $6.72 billion and was ranked by Forbes at 97th position in the World’s most powerful brands list.
The founder Giorgio Armani is a fashion legend and acclaimed as the most successful designer of Italian origin. He has been credited for innovations like a pioneering red carpet, first to broadcast his collection live on the Internet and the first designer to ban models with a body mass index (BMI) under 18. After receiving a lifetime achievement award by Britain and an outstanding achievement award by The Fashion Awards in 2019, Giorgio Armani, along with Marco Bizzarri(President and CEO of Gucci) and Federico Marchetti(president and CEO of Yoox Net-a-porter Group), bagged The GQ Best Dressed Men award in 2020. The founder made a remarkable donation this year of about $2.2 million to hospitals in Milan, Rome, Bergamo, Piacenza and other Italian institutions coordinating the country’s response to the Coronavirus outbreak.
Giorgio Armani SpA's mission reads “to continually create clothes and accessories that aspire to a kind of perfection that transcends fashion.” Armani’s USP or unique selling proposition lies in being the world’s leading fashion house with over four decades in the industry and controlled by one man who is its pounder and sole shareholder.

Giorgio Armani Revenue :


2.15 billion euros – FY ending 31st Dec 2019 (y-o-y growth of 2.3%)
2.10 billion euros – FY ending 31st Dec 2018 (Y-O-Y growth of (negative)-8%)
2.3 billion euros – FY ending 31st Dec 2017

Competitive Analysis of Giorgio Armani

SWOT
PESTLE
Giorgio Armani, is a symbol of luxury, high class, and quality goods. This Italian fashion house originated by designing, manufacturing and marketing quality and expensive clothes for both men and women. Eventually, the company extended its product line to shoes, eyewear, watches, perfumes, handbags and other luxury items. Besides, in collaboration with Emaar properties, Giorgio Armani runs a chain of luxury hotels and resorts in significant cities. The company also operates bars, nightclubs, and a range of cafes all across the world. Apparently, the three key trends of global luxury industry viz., Globalization, consolidation, and diversification largely dominate Giorgio Armani's business model, market strategy and growth trajectory.
The SWOT report dwells upon all the pertinent internal strategic factors of Giorgio Armani that contribute to the fullness of the company. The SWOT Analysis of Giorgio Armani manifests the company's current major strengths and opportunities from its external environment that can be consolidated to further strengthen the company. The report also bestows intelligence on Armani's internal weaknesses and external threats that can cripple its growth.
Apart from business diversification, internal strategic factors like the reputation of the founder (Giorgio Armani), brand value, unique and personalized design facility, hand-stitched clothing, innovative marketing tactics, well-renowned celebrities endorsing the brand, acquisitions and mergers, etc., are core strengths of the company. However, certain weaknesses like PETA controversy of using animal fur in clothing, limited global presence in comparison to that of rival brands, counterfeit products, etc., can hinder the growth of the company.
Expanding the target audience, penetrating into newer markets, development of creative and innovative designs, global expansion, alliances and tie-ups with reputed organizations, designs for the new normal in the wake of the COVID-19 pandemic etc. are potential external factors that create enormous growth opportunities for Giorgio Armani, some of which have been discussed in detail in the SWOT analysis report.
Present in a highly fragmented segment of the luxury fashion industry, Giorgio Armani encounters stringent competition threat from players like Christian Dior, Dolce & Gabbana, Burberry, Prada, Calvin Klein, etc.
The SWOT analysis for Giorgio Armani is presented below in a SWOT Matrix followed by detailed analysis:
Strengths
Weaknesses
1. Strong brand name
2. Categorization based on sub-brands
3. Active social responsibility
4. Diversified portfolio
5. Partnerships with strong brands like Loreal, Luxottica and Fossil
1. Lack of strong digital presence
2. Dicey financial structure
3. Limited target audience and narrow global presence
4. Brand streamlining and restructuring efforts
Opportunities
Threats
1. Shifting market trends
2. Rental, Resale and refurbished market
3. Advent of Smart materials
4. Increasing global income
1. Brand duplication
2. Ease of new entrants and competition
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Detailed SWOT Analysis of Giorgio Armani

 

Strength

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Weakness

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Opportunity

1. Shifting market trends: The fashion market is witnessing massive shifts in terms of geographical locations. Asian market is growing at an exponential rate and looks highly promising in terms of the fashion segment. According to a McKinsey report published in 2018, China will overtake the US in 2019 as the most significant fashion market. India is another fragmented market with a vast potential for the fashion industry. Mature manufacturing segment, growth in disposable income, increased internet penetration seem to be the driving factors for this growth. By 2022, India is expected to have about 690 million smartphone users, which can be leveraged to the advantage. Europe will also see active spending patterns from the growing middle and upper middle-class sectors of its economy. Armani has already set up its presence in Southeast Asia with its first store in Jakarta recently. Expanding more into the parts of Greater China will provide a lucrative business for the company.

2. Rental, Resale and refurbished market: The recent years are seeing a tremendous shift in consumer behavior, mostly propelled by Millenials. Millennials, also called the youth, are the primary consumers of the fashion industry. What they seek in the present days is ‘variety.’ Research has revealed that the frequency of purchase of clothing has increased to 1.6x than compared to 2004. But, it was also observed that the consumers now use them only for about half the life span as they previously used. Prices of clothing are on the rise year on year. So for the consumers, to have a balanced expenditure, they are looking for options like refurbished, second-hand retail or rental clothing. RealReal, a company valued at around $450million, sells slightly used luxury goods at a rate of up to 10% of the original price. Established brands like Stella McCartney have also entered the market by getting into a partnership with RealReal to sell their clothes on a pre-owned or rental basis to the consumers. This allows them to widen consumer awareness thereby expanding store reach. Many consulting firms have already predicted that the majority of the new companies in the fashion industry will be shifting towards this business model. Armani should also find the right business model to enter into this, before it's too late.

3. Advent of Smart Materials: The United Nations has released SDGs (Sustainable Development Goals) in association with the Paris Climate Agreement for luxury goods. With this, the forecasted impact of the sustainability in luxury products is going to play a key role in the next ten years. For the same, venturing into smart materials will play a vital role going forward. Products like polymers that are biodegradable can be used for the same. Apart from providing the functional benefit that the usual apparels provide, it also provides additional benefits like energy efficiency and budget or economical pricing. Added to this, it is also easier to scale this material. Due to the shift in technology trends, customer expectations are also likely to change in the next 10 years in terms of what functional benefit can be for apparel. Materials like carbon fibre offer functional benefits like controlling the temperature and USB charging. Added to these benefits, they are also economical, safe and offer several health benefits.

The remaining section of “Opportunity” is available only in the 'Complete Report' on purchase.

Threat

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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?

1. The SWOT and PESTEL analysis report of the Giorgio Armani interprets the intricate micro and macro factors shaping the company's brand, its operations, business model, market strategy, and growth trajectory.
2. The SWOT analysis is a structure, utilized to benchmark Giorgio Armani's business and performance by recognizing its internal strategic factors like strengths and weaknesses, external strategic factors like opportunities and threats.
3. The report confers intelligence on the external analysis, comprising the opportunities - low-hanging fruits that can be harvested to achieve further growth and expansion and some pertinent threats that threaten to hinder the growth of the company
4. The analysis report covers compelling initiatives that were taken by Giorgio Armani, to stay ahead of its competitors and adversaries and attain a competitive edge in the luxury fashion industry.
5. The PESTLE analysis of the luxury fashion Industry highlights the current trends and factors that compel and restrain the entire industry and largely Giorgio Armani.
6. The PESTLE/ PESTEL/ STEEPL Analysis for in-depth analysis of all external factors specifically, political, economic, social, technological, legal, and environmental, highlighting their consequence on Giorgio Armani's business model, marketing, and growth strategy
7. Abstract information on Giorgio Armani's business diversification, deriving its key business segments and highlighting its major competitors
8. A comprehensive company analysis to obtain perspicacity into company information, company profile, business model, business plans, and marketing strategy
9. Critique of Giorgio Armani's share price, mergers, and acquisitions, strategic partnerships, and alliances, that Giorgio Armani endorsed, and the business objectives or synergies that were achieved with them
10. Analysis of Giorgio Armani’s USP or unique selling proposition, mission statement, and vision statement. With a peek into the Giorgio Armani's key performance indicators, core values, success factors, value proposition, and core competencies.
11. Review on Giorgio Armani's business model, extending to the analysis of key business segments and business case study
References used in Giorgio Armani Analysis Report

1. Giorgio Armani Annual Report 2018 - https://www.pradagroup.com/content/dam/pradagroup/documents/Shareholderinformation/2019/inglese/e-Annual%20Report%202018.pdf

2. Armani forecasts two more years of falling sales, profits - https://www.reuters.com/article/us-armani-results/armani-forecasts-two-more-years-of-falling-sales-profits-idUSKBN1KN2FK

3. Turnover of the Italian luxury fashion company Giorgio Armani from 2011 to 2018 - statista.com/statistics/694400/turnover-of-italian-fashion-company-giorgio-armani/

4. Giorgio Armani company profile - https://www.referenceforbusiness.com/history2/36/Giorgio-Armani-S-p-A.html

The detailed complete set of references are available on request in the 'Complete report' on purchase.

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Giorgio Armani SWOT and PESTLE analysis has been conducted by B.Sai Srujan and reviewed by senior analysts from Barakaat Consulting.

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Giorgio Armani SWOT & PESTLE Analysis
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