The Italian Fashion House Versace Consultancy Case Study

CONSULTANCY CASE STUDY

Rugma Pillai

B00338109

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Contents

Introduction and overview        2

Organizational performance management        2

Stakeholder analysis        2

Risk Management        3

Quality Management        3

Financial Performance        4

Customer Perspective        4

Implementation Issues        4

Recommendations for Improvement        5

Conclusion        5

References        6

Introduction and overview

The Italian fashion house Versace is one that everybody knows. It was founded in Milan, Italy in 1978 by Gianni Versace. They use materials like leather and silk mostly to design flashy, bold and iconic dresses that are elegant and sophisticated. Its brand logo is the head of Medusa which also appears on their apparels. Versace is a designer brand that is used widely by royals and celebrities, worn during red carpet events. But Versace offers options for a wide range of personal styles be it formal or informal, striking or casual this label has something for every style. Versace’s items are known to be luxurious, the premium high end pricing makes it affordability not accessible to all people. The products they offer and made by other designer firms who are continuously monitored by Versace. In 1997 Gianni Versace was assassinated in South Beach, Florida by a 27 year old Andrew Cunanan. He fired the gun twice and the exact reason for his motives have not been confirmed, even though there are many rumors and hypothesis. Two of his siblings sister Donatella Versace and brother Santo Versace then became creative director and chief executive officer respectively.

Organizational performance management

OPM is set of tools, methods, concepts, processes to manage the overall health and performance of an organization. It’s a broad term that governs and monitors a business by giving it a set of guidelines to follow through which includes strategies and operations built to increase efficiency of company and communicate it to parties concerned like stakeholders to let them know the status of the company. OPM has internal and external controls set to check target achievement and communicate goal achievement to stakeholders. At Versace in the starting stages Gianni as a designer was one of the few who had complete control over all management activities, as the company expanded to jewelry, home, Donatella joined it in 1993 with her own line of designer wear. When reading reviews of employees currently the management of house of Versace has loads of room for improvement the team, especially new employees aren’t given structured training, the managers are unclear of expectations or targets. Although there is room for improvement and it needs work Versace blooms at customer maintenance, they build high end clientele. In year 2015 they made organizational changes with a new management team and clear plans

Stakeholder analysis         

When the performance management of a company is analyzed the interested and concerned internal and external parties of the organization have to be examined. Any firm’s obligation is to meet its stakeholder’s demands as part of target achievement. The main stakeholders of the house of Versace are the family itself which makes them internal stakeholders as board of directors, managers and consists now of Santo Versace who owns 30%, Donatella Versace who owns 20%, daughter Allegra Versace who owns 50% and the American multinational financial services company Blackstone that will invest one fifty million euros who are investors classified as external stakeholders. Some other external stakeholders are their creators, suppliers or designer firms that create their products are widely spread all around the world like Europe, China, Turkey, US and many more who are present throughout the manufacturing of their collections for sustainable growth. Their partnerships include residential firms in China, Mind group, In India ABIL group which together constructed luxury residential projects as well. Customers are an integral part of the internal stakeholders and customer satisfaction and clientele maintenance is done by maintaining customer service standards and meeting their fashion demands by selling widely and engaging in their feedback and style requirements to keep trend demands up to par. Their employees are trained to maintain a culture of impeccable customer service.

Risk Management

Risk assessing and managing are two sides of the same coin and an integral part pf OPM. Risk is the probability of a failure or unsuccessful move resulted by the dynamic and inconclusive nature of the environment and in business failure to manage risks results in financial loss. Versace being a fashion company its risk mainly lies in the competition from other luxurious labels such as Gucci, Prada, and Louis Vuitton. Due to recent economic downfall that affects the buying power of individuals there has been a significant impact on their sales from the year 2009 till 2011 it finally saw profits in the year 2012. The managers use business tools to identify these risk, assess it, built strategies to overcome it and manage them this way. At Versace they give importance to its brand goodwill and maintained high end cliental to ensure a certain amount of sales will always be guaranteed.

Quality Management

Quality management is an important part of an organization as it’s responsible to keep the customers from coming back to the brand. A bad experience with a product makes you turn away and pick its substitute competitor. That’s the major reason to maintain quality as it in turn maintains customer’s continuous purchase making them directly proportional. Versace is not known for its low or cheap prices and there is a reason for that. They are famous for their designer clothes, stores and fashion shows portraying that season’s collection which resonates to the expensive products. Their high end pricing is due to the well-constructed items of couture that, the suppliers manufactured items are constantly monitored by professionals who have an eye for detail, only sustainable real leather, silk and denim are used for the clothes.