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Prada SWOT & PESTLE Analysis

ID : 52597153| Feb 2020| 15 pages

COMPANY PROFILE -Prada

Business Sector :Luxury fashion and apparel

Operating Geography :Italy, Europe, Global

About Prada :

Prada is an Italian luxury apparel and accessories company founded by Mario Prada in 1913. The company has 13,618 employees, 637 DOS (Directly Operated Stores) and operates in 70 countries as of 30thJune 2019. The Group believes in a new approach of doing business that lays emphasis on values like freedom of creative expression, valorization of people’s work, preservation of know-how and reinterpretation of the existent. The group DNA consists of the following principles: innovative tradition, subverting the rules, uniqueness of talent, spirit of excellence, sustainable paths and beyond boundaries. The company specializes in leather goods for men and women, travel accessories, footwear, eyewear, ready-to-wear, perfumes, and other fashion accessories.
The Prada Group owns and manages some of the most prestigious luxury brands in the world Viz., Prada, Miu Miu, Marchesi 1824, Church's, and Car Shoe. The Group works invariably to magnify their value by increasing its distinctness, recognition, and appeal. The Prada Group’s brands are its core essential asset. Prada's original business model works on combining the craftsmanship with industrial manufacturing processes. This unique integration is key to the success of the Group and its brands, as it enables the Prada Group to transform its innovative fashion ideas to viable commercial products. On other hand the business model does not compromise with flexibility, technicality, quality and production cost.
Prada's brand valuation as of 2019 is nearly $4.78 billion making it the world's 9th most valuable luxury fashion brands. It also ranks No. 100 on the overall list of best global brands in 2019 irrespective of the industries. Thus, the USP or Unique Selling Proposition of Prada certainly lies in being one of the world's top luxury fashion brands.
Prada's vision and mission are driven by the following motto of Miuccia Prada and Patrizio Bertelli, “Careful observation of and curiosity about the world, society, and culture are at the core of Prada’s creativity and modernity. This pursuit has pushed Prada beyond the physical limitations of boutiques and showrooms, provoked an interaction with different and seemingly distant worlds, and introduced a new way to create a natural, almost fashionless fashion.”

Prada Revenue :


3,142 million Euros – FY ending 31st March 2018 (y-o-y growth 2.8%)
3,056 million Euros – FY ending 31st March 2018

Competitive Analysis of Prada

SWOT
PESTLE
The luxury fashion and apparel industry are one of the fastest-growing industries. The companies operating in this segment have been successful due to their ability to respond to the latest cultural trends and suffice the wavering demands of customers. Also, globalization, consolidation, and diversification are the key trends that largely dominate the global luxury goods market. Being one of the most coveted and an internationally-recognized brand in the fashion and luxury goods industry, Prada enjoys all the perquisites of the industry. The SWOT report dwells upon all the pertinent internal strategic factors of Prada that contribute to the trajectory growth of the company. The SWOT Analysis of Prada Company 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 Prada's internal weaknesses and external threats that can cripple its growth.
The Prada Group is well known for its innovation, transformation, and independence. Prada is not only a major player from the industry but claims to be an experimental workshop of ideas. Prada's impeccable internal strengths like strong brand legacy, substantial global presence, renowned for quality and unique designs, business diversification, exceptional marketing strategies, etc. make the company one of the most organized luxury fashion houses globally.
Prada encounters stress from its internal weakness like comparatively lower R&D investments, overstocking leading to unnecessary business costs, high employee turnover rate, etc.
Digitalization is a great opportunity for fashion brands as its platform helps to reach larger audiences. As mentioned earlier, consolidation and diversification are the most dominating trends of the luxury fashion industry. Hence, collaboration with distinct business sectors and tie-ups with fashion houses is another source of opportunity for Prada. The luxury fashion and apparel industry are highly competitive; consequently, Prada faces stringent competition threats from luxury brands, local retailers, and new e-commerce entrants. The company also encounters threats from external factors like economic downturns lowering the demand for luxury goods, wavering fashion trends, cheaper and easily available substitutes, counterfeit brands, and fake Prada products affecting its reputation.
The SWOT analysis for Prada is presented below in a SWOT Matrix followed by detailed analysis:
Strengths
Weaknesses
1. Portfolio of strong brands
2. Strong distribution network of directly operated stores (DOS)
3. Positive sales growth in most geographies
4. Successful new product launches and high growth across categories
5. High investment in technology
1. Poor performance in the Chinese market compared to rivals
Opportunities
Threats
1. Growing luxury product market in India.
2. Increasingly knowledgeable consumers and rising disposable income driving luxury market growth in Middle East
3. Technology roll to boost e-commerce, operational efficiency and digital customer experience
1. Luxury goods market is vulnerable to international business and economic risks
2. Changing trends and shifts in consumer tastes
3. Malpractices by Prada’s manufacturing vendors could tarnish brand image
4. Financial risks could negatively affect the strong financial structure of Prada
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Detailed SWOT Analysis of Prada

 

Strength

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Weakness

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Opportunity

1. Growing luxury product market in India: India is considered to be the second largest luxury market after China. It will be an important market for international luxury brands looking for new avenues of growth. The growth of the market is driven by changes in FDI policy, Make in India focus, rise in income of the middle class and strong manufacturing industry. The FDI policy change that allows 100% FDI in single brand retail has received appreciation from international fashion brands. India’s ‘Ease of Business’ ranking has also improved. Prada has already made inroads in the Indian market by selling its products in India through e-commerce firms like Snapdeal and Flipkart.

2. Increasingly knowledgeable consumers and rising disposable income driving luxury market growth in Middle East: The luxury goods market in the Middle East is expected to grow at CAGR of 8.1% during 2017-2025 to reach a value of USD 22.4 billion by 2025. Middle East consumers are the tenth highest spenders on luxury goods, according to Goldstein Research. The Gulf Cooperation Council countries – Saudi Arabia, Kuwait, UAE, Qatar, Oman and Bahrain see rising demand for luxury products despite economic slowdown. 70% of Middle East consumers have increased their luxury goods spending, compared to 53% in Europe, Japan and USA. Luxury goods companies are increasing their presence in the region by extension of their distribution network and opening new stores. A major growth driver of the Middle East luxury goods market is the growth in knowledgeable and inquisitive consumer population in the region, as well as rising disposable income, especially in UAE and Saudi Arabia. Prada is in expansion mode in the region, having announced in May 2018 that they would open a new flagship store in Dubai. This comes 6 years after the opening of its current flagship store in Dubai.

3. Technology roll to boost e-commerce, operational efficiency and digital customer experience: Technology has a great potential to boost a company’s performance in today’s world. Prada is in the midst of a massive tech roll out will drive its growth and open up new opportunities in the coming years. In 2018, a new website for Miu Miu was launched in Europe. In 2019, the focus is on launching e-commerce platforms for Prada’s brands. The in-store app Clientsphere has been upgraded. A new merchandise planning tool is being rolled out to improve effectiveness and efficiency. The company is working on developing a seamless remote customer experience and has launched new concierge functions in 5 regional hubs. Prada is also integrating CRM with AI. The company has set up a data science team and implemented cross-channel marketing automation process for generating campaigns based on analysis of customer behavior. Digital communication initiatives like Prada Linea Rossa, Prada Delivery Man and Miu Miu Iconic Wardrobe are launched. Prada has also launched new digital channels through Twitter Japan, Kakao Talk and Spotify.

Threat

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Major Brands :

  • Prada
  • Miu Miu
  • Church’s
  • Car Shoe
  • Marchesi 1824
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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
• The SWOT and PESTEL analysis report of the Prada Group draws upon the intricate internal and external factors influencing Prada's brand, its operations, business model, market strategy, and growth trajectory.
• The SWOT analysis is a structure, utilized to evaluate Prada's competitive stance by recognizing its internal strategic factors like strengths and weaknesses, external strategic factors like opportunities and threats.
• 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.
• The analysis report covers compelling initiatives that were taken by Prada, to stay ahead of its competitors and adversaries and attain a competitive edge in the industry.
• The PESTLE analysis of the luxury fashion and apparel Industry helps to distinguish the factors that compel and restrain the retail market.
• 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 Prada's business model, marketing, and growth strategy.
• Abstract information on Prada's business diversification, deriving its key business segments and highlighting its major competitors.
• A comprehensive company analysis to obtain perspicacity into company information, company profile, business model, business plans, and marketing strategy.
• Critique of Prada's share price, mergers, and acquisitions, strategic partnerships, and alliances, that the Prada Group endorsed, and the business objectives or synergies that were achieved with them.
• Analysis of Prada’s USP or unique selling proposition, mission statement, and vision statement. With a peek into the Prada's key performance indicators, core values, success factors, value proposition, and core competencies.
• Review on Prada's business model, extending to the analysis of key business segments and business case study.
References used in Prada Analysis Report

1. Prada Annual Report 2018 - https://www.pradagroup.com/en/investors/investor-relations/results-presentations.html

2. Prada Annual Report 2017 - https://www.pradagroup.com/etc/designs/pradagroup-balance/docs/prada-annual-report-2017.pdf

3. Prada SPA Presentation 2018 - https://www.pradagroup.com/content/dam/pradagroup/documents/Financial-Report---presentation/FY_18_Prada%20Spa_presentation.pdf

4. Prada company profile - https://in.reuters.com/finance/stocks/company-profile/1913.HK

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

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Prada SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & PESTLE.com (2020). Prada SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/prada/ [Accessed 14 Jul, 2020].

In-text: (SWOT & PESTLE.com, 2020)

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Prada SWOT and PESTLE analysis has been conducted by Nipunn V and reviewed by senior analysts from Barakaat Consulting.

Copyright of Prada SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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Prada SWOT & PESTLE Analysis
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