Accounting, Financial Management, Capital Investment

Financial Management Case Study Individual Essay
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Institution
Date
Gucci Enterprise
Gucci Group is a leading fashion and luxury industry with attractive brands such as Gucci, Yves Saint Laurent, Alexander McQueen, Bottega Veneta, Sergio Rossi and Stella McCartney. The investment was established in 1921 by Guccio Gucci in Florence, Italy. The premise embraces corporate strategies and developments to develop multi-brands to create high value and ensure it has a competitive edge through its diversification as well as acquisition. The primary target of the Gucci Group is to reach its high-end customer segment especially on watches, shoes, and jewelry with unique stylistic identity. Gucci remains competitive in the market due to its luxury strategy and capital investment. The present essay henceforth discusses the various activities of Gucci Group that help it maintain its position and competitive advantage in the global market.
The aspect of advertisement strategy in investment is one that attracts many customers in the luxury goods industry. The timing of the advertisement strategy finds the market at its weakest expectation and suddenly switches the entire attention to a somewhat fashion-oriented approach. The fashion magazine approach ensures that consumers get an education about the luxury goods and presents the various designs thereof. The impact of the advertisement brings forth multiple returns in the business with increasing investment rates. The measurement of the returns equates to the reduction in the inventory risk and an increment in the production rates.
Secondly, production strategies adopted in a business influences typically its final output. Likewise, Luxury companies use three different strategies namely; in-house manufacturing outsourced production and licensing in transacting businesses. Hermes deploys the in-house approach and ends up with fewer products compared to Gucci Company because of much time spent in training the artisans’ leather workers. The production rate is also evidently low since a single craftsman takes the responsibility of the many steps involved in the handbag assembly. Gucci brilliantly outsources carefully through intelligent networking of small Italian firms hence ends up with a minimized fixed assets investment.
On a separate note, Gucci management prompts for financial assistance to the suppliers to help improve the delivery rate of the goods to its various outlets in the market. Additionally, the administration focused on a strategy that will invest in technological innovations such as sophisticated equipment for cutting leather. The impact of financ...