Introduction to Business
Student Name – Min Ye Htet
NCC Education ID – P00197041
Centre Name – KBTC University
Date of Submission – 4.11.2022
Contents
Task- 1…………………………………………………………………………………………...2
Task- 2…………………………………………………………………………………………...5
Task- 3…………………………………………………………………………………………...8
Task- 4………………………………………………………………………………………….10
Task- 5………………………………………………………………………………………….13
References…………………………………………………………………………………….16
Appendix……………………………………………………………………………………….18
1|Page
Task- 1
250 words
10 marks
Describe your product. Describe the characteristics of the business
that will manufacture and sell your product e.g. type of business and
organisational structure, justifying your choices.
2|Page
Founded by Mr. Yves Saint Laurent in 1961, Yves Saint Laurent alias YSL is one of the few
acclaimed fashion houses (brands) of the late 20th Century and known for its reputation as the
reviver of haute couture - a French word which means tailoring for a specific individual client
(Kering, 2022).
In present-day, the brand is operating as a multinational company under Kering group (a parent
company of YSL), specialized in manufacturing and service sector with over 260 outlets while
offering both couture and ready to wear luxury clothing, fragrances and cosmetics (MBA Skool
Team, 2020). Whilst providing consumers’ products, the company’s main aim is to create
unparallel style of clothing which is contemplated as eternal by its founder.
YSL is notably a public limited company as the shares are tradeable at stock exchange.
Operating as a public limited company has allowed YSL to expand its market internationally in
fashion industry and gain more market shares. In the previous year, the company is ranked in
396th place for its market share in the fashion industry (ysl.com, 2020).
Organizational Chart of YSL
Fig (1.1), Source- the official board (YSL executive, 2022)
YSL operates in seven departments by utilizing hierarchical structure. The former structure has
allowed YSL to operate efficiently in all three continents where the operation takes place.
3|Page
However, a communication barrier can arise if an important message is to be reported to CEO by
lower-level employees. Furthermore, YSL utilizes line and staff relationship which enables the
company to ensure that the employees’ rights are protected (Harry, 2020).
To conclude, YSL has a meticulous history behind it which has built up over decades which is
why it is appropriate to research about the company.
Number of words- 270
4|Page
Task- 2 400 words 20 marks
Based on your environmental analysis, outline how you will respond to
each opportunity and problem in the market to give your product the
best chance of success against the competition. Justify your choices.
5|Page
The environmental analysis of Yves Saint Laurent will be compared with the perspective PEST
analysis.
Political
Despite the subsidies not being provided by the government, the tax policies for YSL are
considerably liberal. Not only Favorable tax policies help YSL’s authorities to expand smoothly
but also increase competition in the luxury clothing market for YSL. However, due to the over
expansion, the company had encountered loss in profits for four consecutive years from 20082010.
Economical
Although YSL has expanded thoroughly in three continents; North America, South America and
Europe, it is yet to integrate in the Asian market. Considering that India is estimated to develop
the luxury market and Malaysia and Indonesia are slowly emerging for economic growth, YSL
could possibly gain more market shares if the company is to be expanded in the former continent
before the competitors did (Studd, 2020).
Social
YSL’s target market mainly consists of Generation X born middle aged women (approximately
25-35) who have received high level of education during their youth - more specifically people
with high income over £ 65,000 (Studd, 2020). However, unlike the brands such as Ralph Lauren
or Gucci, YSL is still not considering to promote its clothing for youngsters.
Technological
People are utilizing internet to shop for the products they want. Thus, the luxury brands are
competitively promoting their products by digital marketing. However, YSL is yet to properly utilize
digital marketing as the company was in recovering stage for the past few years due to the
resignation of the former creative director.
Environmental analysis and YSL
Despite the drawbacks it has, YSL has never failed to amaze its customers and potential
customers. In the recent year, YSL launched a lip stick printer where any of the selected colors
that one chose will be printed out from the printer. This is such an innovative move with the
combination of technology for YSL and a smart way to gain public awareness.
Competitiveness of YSL in market
6|Page
Market structure is classifying the companies depending on the nature and degree of competition
in the pertaining industry after researching which industry does the company belongs in (Higher
Rock Education and Learning, 2020). YSL operates in monopolistic competition market structure
as the brand is part of luxury clothing market where a few brands have a huge impact and
influence on the industry. YSL has an upper hand upon other newly established businesses for
being one of the companies in dominating in the market. However, as the technology has arisen,
it may become a huge threat for YSL if the new businesses can produce the same quality but at
a lower price and more efficiently.
Number of words- 426
7|Page
Task- 3 400 words 20 marks
Propose a means of producing your product. Outline how you would
ensure its quality on a day by day basis and over time. Justify your
choices.
8|Page
Despite being headquartered in its home country, YSL’s products are not manufactured at
France. Instead, the production of the company takes place in Florence of Italy where all the highend luxury goods of YSL are made (MADEFIND, 2021). The former products include from bags,
clothing, and shoes to cosmetics and fragrances. Furthermore, YSL is now trying to step in the
new market with its jewelries.
Production process
The company always assure that their products consist of scrutinized raw materials which meet
the standards of the head company, Kering and environmental standards. YSL mainly works with
Milan-based raw material supplier to get supply for leather, cotton, silk, cashmere and viscose
which are notably the main raw materials of YSL (SAINT LAURENT , 2020). Production process
of YSL starts with raw materials which will then converted into a final output product either by
tailors or machineries.
Method of production
Depending on the circumstance, YSL relies on two methods of production. For ready to wear or
ready to use products, batch production is utilized where the different designs of same products
are made batch by batch in a daily basis. However, job production is being used to create a
customizable clothing and tailored products. Using a former method has helped YSL to improve
relations with its customers since the products meet the exact requirements by the customers.
Despite the improvement in customer relation, it is undeniable that cost will be raised due to a
high salary being given to the expert and skilled tailors and designers.
Quality control of YSL
YSL is one of the few luxury brands which has strict employees’ rights while ensuring the labor
force receive fair treatment and always improving labor standards all over the supply chain
process. This factor alone motivates the employees to do their work efficiently with hardly any
error in the production process. Nevertheless, the factory managers of YSL are always monitoring
how the production is done and open to make significant changes depending on how the process
can affect on the output products while eliminating the unnecessary waste as much as possible
(YSL content writers, 2022). This is when Kaizen turns out to be the most appropriate method for
production of YSL as the production managers are constantly trying to improve the waste
management. By utilizing Kaizen, the company can benefit from getting rid of overstoring the raw
materials like leather and thus, the storage cost will be reduced.
Number of words- 405
9|Page
Task- 4 600 words 25 marks
Imagine that a business capable of manufacturing and selling your
product already exists. However, you will have to make significant
changes to the business to deliver the product. You will introduce a
new production process, discontinue the production of 1 or 2 existing
products that aren’t making a profit but which the company has
manufactured for a long time, make 10% of your workforce redundant,
and restructure the organisation to ensure you can sell your new
product in new markets.
Outline a strategy for communicating and introducing these changes
to minimise disruption in the business and handle any staff issues
arising out of the planned changes. Justify your choices.
10 | P a g e
Some of the products manufactured from our company isn’t making profit. This is due to the
products have been in the market for quite a long time that they are in the decline stage of the
product life cycle after passing through all the stages of life cycle. (George Lawton and Mary K.
Pratt, 2021).
Change management is a structured approach for dealing with the transition of a company’s
aims and objectives, processes or technologies. The main objective of change is to provide new
product in new market. Thus, the changes in production process have to be in accordance with
the company’s objective.
Porter’s Analysis for New Products
Bargaining power of the suppliers
Among all the suppliers of YSL, the Milan-based supplier is the only supplier with the most
bargaining power due to offering the integral inputs and raw materials including Cotton and
leathers, indicating that the supplier has the ability to control its price and quality as it likes. If YSL
doesn’t have a good relationship with the former supplier, it will hugely affect the production of
new products.
Buyer power
Being a luxury brand, which operates in a very competitive market, YSL’s consumers possess
a huge buyer power considering the loyal customers of YSL are people with high income. Thus,
if YSL doesn’t satisfy the wants of those customers, they can easily change to competitors.
Considering that YSL has already surprised the public with its lipstick printer, the company can
come up with something which is as innovative so that more customers will arrive to YSL and
thus, able to increase its profit by a huge margin.
Competitive rivalry
As mentioned above, YSL operates in a very competitive market with its main competitors being
Versace, Alexander McQueen and Gucci which have a huge influence on the clothing market and
higher market share than YSL (Studd, 2020).. If YSL is to produce the new products, the creative
team has to think thoroughly about how the new product is better than those of the competitors’
brands.
Threats of substitution
YSL doesn’t have any threat on clothing for substitute products since clothing is seen as a basic
need for living. However, there surely is a threat for substitute products on its hand bag due to
the availability of bag packs and wallets. If YSL is to launch their new products, the unique selling
11 | P a g e
price of the products should be enhanced to highlight how the product is more compatible than
other substitute products.
Threats of new entrants
Luxury brand market is mainly based on monopolistic competition market structure where only
a few brands have a huge impact on the market and YSL is one of those brands. Thus, although
it is easy for new entrants to break through the market, it is hard for them to gain as many market
shares as YSL.
After ensuring the changes for producing new products, the following steps process will be done
to communicate the changes.
Highly appropriate methods of communication changes
The changes will be communicated to the employees through the departmental managers by
having face to face meeting. Furthermore, e-mails will be sent to the employees about the detailed
information on how the employees will have to deal with changes.
Potential impact on proposed changes
Employees have to go on the training for understanding changes and if they can adapt and
pursue the new management, they will either receive promotion or rise in salary. If they are not
satisfied with their job, they are free to get redundancy.
Despite willing to come up with new product line, none of the internal people can certainly proof
that this clothing line up will be successful. This is where the research and development team
have to be assisted on researching the potential market for the new products and how the
company can enter this market.
Number of words- 641
12 | P a g e
Task- 5 600 words 25 marks
Write a marketing plan for your product with particular reference to
your SWOT analysis and your understanding of the target market.
Outline your marketing goals e.g. sell X units per month to Y
customers, via Z channels. Decide your marketing mix and outline your
tactics. Justify your choices.
13 | P a g e
SWOT analysis of YSL
YSL’s main strength is its timeless and iconic edgy and rock and roll style which can keep up
with any trends while giving a presence of luxury at the same time. However, due to the brand
completely relying on its “YSL” logo, purchasing a product with Saint Laurent logo can be
confusing for the customers despite Saint Laurent is coexisting under YSL. Thus, the marketing
team of YSL could promote further using the name Saint Laurent whether on the social media
platforms or on the billboards. At the same time, as the cheaper rip off products of YSL are
available on high streets, it can become a huge threat for YSL if the former products started to
gain more awareness than the original brand (Bhasin, 2019).
Understanding the target market of YSL
YSL is no stranger to producing high-end luxury clothing which is worth over thousands of
dollars. Thus, it is apparent that the company search for its market in upper and upper-middle
class people. Although, the company has never stated who their official target audiences are,
YSL notably emphasized on producing clothes for the older affluent customers with ages of 35
and above. However, after the employment of the new creative director, Anthony, the company
has started to renovate more for its the ready-to-wear collections with leather appeals to a more
youthful market.
For the target place of market, the majority of the consumer base is from middle east.
Furthermore, as the Asian market is remarkably expanding for YSL, a drastic increase of
consumer base was emerged in China which brings in 24.3% of revenue in 2012. Despite its
emerging market in East Asia, the brand is yet to be expanded in Southeast Asia (Studd, 2020).
The new marketing plan for YSL is to expand its market in Asia via promoting the brand name
“Saint Laurent”. This marketing plan is created in alliance to the SWOT analysis of the company.
Considering that “Saint Laurent” is often seen as confusing by the existing customers, the
products which are exporting to the Asia market will be mainly promoted under the name of “Saint
Laurent”.
4Ps of YSL’s new marketing plan
Price
The pricing policy of Yves Saint Laurent notably leans towards premium pricing policy which
only the luxury brands utilize for a niche market of exclusive customers. This pricing policy is
similar to cost-plus pricing where a significant value is added over covering production and
14 | P a g e
operation cost. Despite maintaining its high-pricing policy, there is not significant effect in revenue
and sales and thus, this will still be utilized in the new marketing plan (Valades, 2022).
Place
This is where the changes will be pronounced. While taking advantage of good relationship with
Chinese minister, the new pertaining factory will take place in China due to the lower labor and
production cost. Among the 4 types of distribution channels, YSL will start to utilize the level 2 of
distribution channel where a medium of the company’s retailer will be set between the factory and
customers as the retail shops will be opened in Thailand, India and Indonesia where there is the
highest demand for YSL’s products (Katen Borrington and Peter Simpson, 2018).
Product
Opposed to its signature edgy clothes, the new products will be blended with a touch of
traditional Asian clothing designs like kimonos, hanbok and hanfu (Laharee, 2022). This will
induce the older affluent customers from the pertaining countries to buy Saint Laurent products
as they cherish their value of traditional clothing.
Promotion
YSL will be advertising their new products using billboards near the luxury clothing stores since
this is where the wealthy people come shop at. Moreover, YSL will be engaging with its new social
media pages of YSL Asia by giving sponsorship to the fans’ favorite celebrities and advertised
through the pages.
Number of words- 637
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References
Bhasin,
H.,
2019.
Available
SWOT
at:
Analysis
of
Yves
Saint
Laurent.
[Online]
https://www.marketing91.com/swot-analysis-of-yves-saint-laurent/
[Accessed 27 October 2022].
George
Lawton
Available
and
at:
Mary
K.
Pratt,
2021.
Change
management.
[Online]
https://www.techtarget.com/searchcio/definition/change-management
[Accessed 26 October 2022].
Harry, 2020. Organizational Culture of Yves Saint Laurent Strategic Leadership of Creative
Directors.
[Online]
Available
at:
https://www.google.com/search?q=meticulous&client=firefox-b-
d&sxsrf=ALiCzsZwV_sjM4JIftM8qWeHTiTgvh4hbQ%3A1665835988042&ei=1KNKYSTAvOh3LUP9YuoQA&oq=meticul&gs_lcp=Cgdnd3Mtd2l6EAEYATIFCAAQkQIyBQgAEJECM
gQIABBDMgQIABBDMgUIABCABDIFCAAQgAQyBQgAEIAEMgUIABCABDIF
[Accessed 15 October 2022].
Higher
Rock
Available
Education
at:
and
Learning,
2020.
Market
Structure.
[Online]
https://www.higherrockeducation.org/glossary-of-terms/market-structure
[Accessed 18 October 2022].
Katen Borrington and Peter Simpson, 2018. Cambridge IGCSE and O Level Business Studies.
5th edition ed. London: Hodder Education.
Kering,
2022.
Houses
History.
[Online]
Available at: https://www.kering.com/en/houses/couture-and-leather-goods/saint-laurent/history/
[Accessed 15 October 2022].
MADEFIND,
2021.
Where
Available
is
YSL
Made?
at:
(Solved
&
Explained).
[Online]
https://madefind.com/where-is-ysl-made/
[Accessed 23 October 2022].
MBA Skool Team, 2020. Yves Saint Laurent SWOT Analysis, Competitors & USP. [Online]
Available
at:
https://www.mbaskool.com/brandguide/lifestyle-and-retail/3793-yves-saint-
laurent.html
[Accessed 17 October 2022].
SAINT
Available
LAURENT
at:
[Accessed 23 October 2022].
16 | P a g e
,
2020.
Sustainability.
[Online]
https://www.ysl.com/en-us/sustainability-raw-materials
Studd, C., 2020. YVES SAINT LAURENT PARIS, s.l.: s.n.
Valades,
B.,
2022.
Available
What
at:
is
Yves
Saint
Laurent’s
marketing
strategy?.
[Online]
https://blucactus.blue/what-is-yves-saint-laurents-marketing-strategy/
[Accessed 29 10 2022].
YSL
Available
content
at:
writers,
2022.
yslbeautyus.
[Online]
https://www.yslbeautyus.com/our-commitments/inside-our-products/quality-at-
heart.html
[Accessed 24 October 2022].
ysl.com,
Available
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at:
[Accessed 15 October 2022].
17 | P a g e
YSL
market
share.
[Online]
https://www.similarweb.com/website/ysl.com/#ranking
Appendix
Pre-Task
SWOT analysis of Yves Saint Laurent (YSL)
Strength
Fashion and vogue
-
Known to being capable of designing classic and iconic products
-
Unique and edgy luxury fashion
Presence and popularity
-
More than 70 stores across 10 countries in 3 continents
History and brand image
-
the reviver of Couture which had started to fade in the late 60s
-
Afterwards, the brand has built its own image in luxury clothing market by developing
footwear, handbags and perfume related products.
-
Known to be “eternal” when it comes to fashion
Product variety
-
Offers a wide variety of products including footwear, handbags and other accessories
to either gender
Weaknesses
Logo and brand identity
-
Hard to identify the products if the YSL logo is not used on the products; the brand
identity can still go further (Bhasin, 2019)
Change management
-
After firing the former creative director, YSL is struggling to associate with their
new design signature; boring, minimalistic and repetitive designs so far.
-
Problems are still occurring and still undergoing a transition stage
Opportunities
-
Can still further expand in Asia market where the luxury goods are sprawling.
-
Reviving the YSL vintage collection which consists of timeless classics and
depth in design than its rival brands.
-
18 | P a g e
Undertaking more CSR activities (MBA Skool Team, 2020)
-
Promoting “Saint Laurent” more on social media platforms since the majority of
people only know the brand as YSL but not Saint Laurent.
Threats
-
Availability of knock off brands
-
Changing customer needs; Due to offering premium luxury products, the brand
caters to a small number of customers. Thus, if the economic upheaval was hit in either
European and American markets where they gain over 80% of revenue from, the brand
would no longer survive in the market.
-
Being a high-end luxury brand, the competition in the former market is intense.
Additionally, the brand also encounters immerse competition with its parent
company Gucci which the brand has more trademark and image.
Pestle analysis of Yves Saint Laurent
Political
Stability of government
-
Solid political base and government corporations support the strength and
development of YSL’s operation management
-
Government stability allows the brand to develop both locally and internationally.
-
Easier bartering between the countries for YSL leadership due to political stability and
development
-
Attracts investors to invest more in large businesses like Yves Saint Laurent- leading
to growth and expansion in the underlying structure plus, company’s image globally
Tax and subsidies
-
Favorable tax policies help YSL to expand smoothly
-
Due to the provision of subsidies from the government, the creative team of YSL could
control the costs on operating day-to-day activities.
-
Lower tax rates and the provision of subsidies increase competition for businesses like
YSL in luxury clothing market.
Economic
Inflation
-
Modern inflation rate is essential for the companies like YSL to bloom
-
Helps the brand develop and operate positively to increase the confidence of
customers’ spending
-
A higher inflation rate means lower disposable income. This may lead to lower
consumer spending which then lead the consumers to not spend on expensive luxury
products like YSL and thus, lower sales for YSL.
19 | P a g e
-
A lower inflation rate means higher disposable income. This may led to higher
consumer spending which then could lead the majority of the consumers to spend on
expensive luxury products like YSL, and thus, increase in sales for YSL.
Interest rates
-
A modest interest rate will help businesses like YSL to consider to take loans from the
banks
-
The former loan would be used for growth and development purposes of the brand.
-
Lower interest rates encourage the confidence of consumer to take loans, This may
lead to higher consumers’ spending on luxury products like YSL and thus, increase
the sales.
-
Higher interest rate discourages the confidence of consumers to take loans. This may
lead to lower consumers’ spending on luxury products like YSL and thus, cause a fall
in sales.
Purchasing power (Consumer spending)
-
Higher consumer spending means higher purchasing power of the consumers which
may lead to an increasing of overall consumption of products including YSL’s, and
thus, increase sales.
-
The former spending trends are not only influenced by product quality and marketing
but also microeconomics sectors such as unemployment trends and macroeconomics
sectors such as inflation and interest rates.
Unemployment
-
Higher unemployment in an economy will lead to lower overall disposable income
which inversely could effect the performance of big companies like YSL.
-
Lower income means lower consumers’ spending and thus, leads to overall decrease
of spendings on luxury products like YSL.
Social
Demographics
-
Higher population of younger people is favorable for the company since it will lead to
larger consumer population.
-
Younger population will as well be promising with more educated and skilled labor and
thus, companies like YSL will able to be more selective on the talent of the youth.
-
The brand ambassadors are also important as they will encourage the younger
consumers to become loyal customers.
Income
20 | P a g e
-
Existence of people with higher income is extremely important for luxury brands like
YSL as they are the ones consuming the products of the former brands.
Education
-
Improvement in education means more expert, talented and well-educated people to
select as the employees of YSL.
-
It also means that the former educated people will also be more aware of their
spending and consumption patterns which means they will be focusing more on the
quality and the uniqueness of the products they are consuming which is exactly the
main advantage of YSL products.
Technological
Underlying of technology
-
A High rate of technological advancement motivates YSL creative team to innovate in
order to increase efficiency of the production.
-
Also means that higher progressive competition in the branded market.
-
Due to the advancement, research and development section of YSL becomes more
efficient and accurate when collecting data secondarily.
-
Additionally, fuse the attraction of foreign investors which than leads to further
development and growth of the company.
Use of social media
-
With a majority of young and middle using social media, the former medium is being
used together the necessary information and data.
-
Also used for employment purposes
Legal
Health and safety laws
-
YSL creative team is strict when it comes to health and security of its employees
considering how the authorities of the company make sure to check the application of
safety nets, drill and precautionary measures at the pertaining workplace
-
The former health and safety laws not only include physical welfare but also mental
well-being of the employees working for the company.
Employment laws
-
Disciplines and regulations of the government demand YSL creative team to establish
the legal contract between the potential employees and the employers.
-
The former contract ensures a healthy relationship not only between the employees
and the employers but also with the pertaining workplace.
21 | P a g e
-
The strategic leadership of creative directors utilizes employment laws and instruct its
new employees during the recruitment process as well.
-
The Human resource department of YSL also conventionally conducts introduction
training to its recently employed employees in order to let them engage with
employment laws as well as other legal formalities.
Anti-discrimination laws
-
YSL is well diverse when it comes to racial diversity of employees, considering a
notable number of immigrants and how it operates internationally in three continents.
-
The company pursue the anti-discrimination law along all process of recruitment to
promotion of the employees.
-
The recruitment of the employees doesn’t rely on one’s race or gender.
-
The creative directors of the company also ensure that the company is free to
discrimination and not toxicity in organizational culture.
Environmental
Recycling
-
Consumers are now more aware of environmental problems including pollutions and
thus, demanding for the company to utilize the recycled products in the chain process
to be disposed off.
-
Alike any other competitors in the luxury clothing market, YSL is introducing more of
the recycled product line to match the consumers’ demand and for the environmental
welfare.
Reducing (Waste management)
-
High regulations of waste management
-
Despite following the minimum regulations authorized by government, the company
should be engaging more with itself pertaining to waste management authorities and
institutions to be able to sustain checks and avoid any unnecessary waste for the
future
-
However, viewing from the perspective of environmental sustainability, YSL already
has a proper designated process of coping waste and disposing waste in an
environmentally congenial manner.
Green consumption
-
Consumers from all over the world are increasingly preferring green products which
are environmentally friendly and sustainable ways.
-
The rival companies of YSL are also leaping towards producing more of the green
products as an appeal to the consumers
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YSL has recently also been engaging with CSR activities.
-
The company has also introduced a new green product line and the creative team of
the company is planning to increases its weightage for its role in environmental
sustainability.
-
YSL contracts with suppliers and distributors who are pursuing the disciplines and laws
regarding to environmental sustainability in its backward integrated chain.
Renewable energy investments
-
YSL and its related members in the industry are progressively making use of solar
energy, and hydroplanes in both operation process and production process to reduce
carbon footprint.
-
The company also owns a company to control hydro plant by a small scale to help in
the manufacturing process.
Porter’s five forces
Threats of new entrants
-
Operating in the industry influenced by the companies with historical brand image, it
is surely not easy for the newly established companies to enter the market.
-
However, to ensure that the brand will never be able to surpassed by the newly
introduced companies, YSL creative team should consider investing more capitals,
enhancing more of the unique or signature of the brand and promoting effectively via
various channels.
Threats of substitutes
-
Being a high-end luxury brand, there surely are many similar or substitute products
made at a cheaper price in the market.
-
Due to the former factor, YSL isn’t completely gaining the profit at fullest since the
potential customers thought the substitute products are more worthy to buy.
-
TO avoid this problem, YSL could use more of an advanced technology to make their
products so that it will become difficult for the substitute products’ manufacturers to
simple (copy) the products.
-
However, this factor is not a big deal since YSL has a strong brand image itself and
the loyal customers will continue buying the products of YSL regardless.
Competitive rivalry
-
YSL operates in an extremely competitive industry where all the brands and
companies are cutting throats to maintain power in their pertaining industry
-
Gucci and Louis Vuitton being their biggest competitor, YSL’s creative team has to
work its fingers to the bone to be able to keep up with the competitors
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-
However, as the same case to substitutes, YSL’s loyal customers will still continue
buying the products of YSL despite the competition.
-
YSL’s competitiveness is based on the diversity of products, development within each
economic sectors and the barriers of the market.
Bargaining power of suppliers
-
Suppliers of YSL gain a significant power by demanding high price for the materials
supplied to the company while adjusting the quality and the quantity of the product or
services to the extent on how they want to provide to its customers.
Bargaining power of a supplier for YSL powerful if;
-
It is considered to be more concentrated by the company than the industry it is
providing to
-
It doesn’t rely on the pertaining industry to gain profit
-
The creative team of YSL have to suffer from higher cost for changing to other
suppliers
-
The suppliers provide far different products from the other suppliers
-
There are no close substitutes available for the products being supplied by the other
suppliers
Bargaining power of customers
-
The customers of YSL have strong bargaining power which can heavily influence
company’s profitability and sales.
-
In most cases, consumers demand for lower price and higher quality of the products.
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However, as for the luxury brands like YSL, price doesn’t seem to be an important
factor. At this point, consumers are more focused on the innovations, the unique selling
point (USP) of the products and the ability of the companies to keep up with the trend.
Bargaining power of YSL’s consumers is strong when;
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The lack of innovation of the company hugely influences the quantity sold of YSL’s
products
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The lack of competitiveness to other rivalry companies influences the sales of YSL’s
products
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The close substitutes of the products are available
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The cost of switching to other brands is reasonably low.
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