CASE Does the Devil Really Wear Prada? such as Church\'s Group and Car Probably

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CASE Does the Devil Really Wear Prada? such as Church's Group and Car Probably not. but the Italian Prada Group, clearly one of businesses the hop luaury businesses in the world, is designing. pro- tering into icensing and jont vernture agreamenean ducing, and distnbuting lxury handbags, eather goods, an eyewear (such footwear, ready-to-wear apparel, accessories, eyewear, manufacturer PUIG Beauty & Fashion Group. Wh countries through 618 directly operated stores and se- stores. It even launched a new phone by LG of So and fragrances all over the world 6 it operates in 70 quisitions, Prada expanded its product ines and ected, high-end mulb-brand In 2010, Prada was basicaly a European and opered stores and xury depart- erating neary half of its revenues from Europe, ment stores Prada is a closely held firm in which the Prada family-led percent from Italy. However, the importance of Asia s by Muccia Prada, president and head designer, and her hus panding. By 2012, European revenues were 22.7 pers 2 percent from Italy, but Asia-Pacitic s band, CEO Patriznio Bertell-holds 80 percent of the shares, cluding 16 with talian bank Intesa Sanpaolo land Prada would be in Asia they had to decide how t realicod that the future of kxury consumption tions, the Prada brand still counted for nearly 80 to the company's global revenues. The Asia-Pacific holding the rest. When Ber- Japan) rose to 35.6 of total revenues. In spite of ts percert e e they were going ind ther eparsion Due to a string of debt-financed acqu the highest growth rate of al geographic areas in which shors in the eartly 2000s, Prada ran into liquidity problems was operating, benetrting from organic growth rathe and had to tum to Intesa for funding. Inbesa purchased the aoquisitions. Prada opened 17 new stores in the regin The ups g eve cess in bus sumer is th 5 percent interest in the company in 2006 for 100 milion, did a lot of work upgrading existing stores which put a valuation on Prada of 2 bilion at the time. They had considered an IPO in 2001 and 2008, but the collapse Why China? in global stock markets both times forced them to pull back. However, 2011 seemed lke a good time. Issuing stock to out- The kuxury goods market, of which Prada is a member side investors would bring in new money, but it would also hard to deline. It is typicaly composed of goods that force Prada to deal with nonfamily shareholders and the finan- cual discipine of the market. Also, they had to figure out where high-priced, high-quality, and high-status. Some of pany, Ms the oth er largest luxury goods firms in the world are French-based to issue the IPO and how much of the company they should LVMH, Christian Dior (whch holds 42 percent of sel. Should st on the Mían Stock Exchange, as they PPR (which includes Gucci and Yves Saint Laurent, LVM 60 desig nere being advised by nearly everyone in italy? Or should they Richemont (which includes Cartier, Chloé, and Altred Dunh become the firs italian company to list in Hong Kong, where and has a JV with Polo Ralph Lauren). Of course, there they could be closer to the future growth markets in China? also luxury goods firms in many industries, such as fast and gnovath aregores automobiles, watches and jewelry, and drinks. It however, that Asia, especially China, is rapidly becoming the future of the luxury goods industry China Who Is Prada? Prada began in 1913 when Mario Prada opened a luxury n addition to having the largest population in the word quickly built a strong reputation in luxury goods due to its ing at a faster rate than any of the advanced countries and high-quality materials. By 1919, Prada had become an offi becoming the target of the luxury goods markets. The country make store n the Galeria Vittorio Emanuele design novati in Milan. Prada s now the wrld's second-largest economy and grow ord cial supplier to the Italian Royal Family fashion throughout Europe. and a benchmark for is expected to be the largest luxury market in the world b 2020, catering to both men and women. Until recently, the At the end of the 1970s, Mario's great-granddaughter, market in China was driven by men, but women are becomin Muccia Prada, entered into a partnership with Patrizio increasingly important. Maserati SpA and Bulgari SpA Bertel, a Tuscan businessman who was involved in high been successful in China because they have positioned them quality leather goods. Initially, Bertelli's company, LP. selves as the ultimate male status symbols. Much of the luxury SpA, had an exclusive license to produce and distribute goods purchases were by men for women, but now women ions and i Ind leather goods using the Prada name, but in 2003 I.PI. SpA are starting to assert themselves as consumers. In 200, and Prada merged into Prada SpA. (SpA-Società per An- example, 30 percent up zioni-is the same as "corporation" in the United States or from 7 percent in 2005. In the broader luxury market sales. pic n the 1980s and early 2000s, Prada began to expand compared with 45 percent in 2008. Also, the average temale women accounted for over halt of the $15 billion in saes luxury consumer spent 22 percent more in 2010 than in 200 of Maseratis sales were to women, as Mu Mul, acquiring new

Explanation / Answer

China has been facing constant corruption and corruption has been involved in IT organisational as well as government culture. By the Chinese government new crackdown against the corruption and sponsorship consumption menu of the luxurious brands like dior and Prada.
As China has Limited the overall spending limit over the luxurious gold and have monitoring authority over the over spenders. There's a specific authority always have an eye on the rich people of China who is spend million and billion on luxurious goods.
Prada has also faced decrease in sales as the overall customers of Prada belong to the elite class category and they are avoiding dubai luxurious quotes as governments are keeping a watch on them. Prada has successfully implemented itself into the China in last few years. My having a constant customer in China and also being a large provider the luxurious good inside the Chinese industry has affected the Prada overall image as well as safe after the crackdown of the Chinese government.

Prada should implement new strategies to deal inside the China. By providing section ised and cheaper luxurious products then the usual prices are offering some sort of exchange program as well as taking specific steps according to the mark it would be very beneficial for dealing inside China for Prada . As most of the customers are moving out from the country to buy the luxurious goods and come back to their homes after buying luxurious goods from the international markets, Prada should focus on the nearby market where the implications of the Chinese government are not available most of the Prada customers belong to the elite class and they can go after different places to buy the specific product we need.

Prada can also introduce new programs buy collaborating with different companies which are pre existing and have knowledge about the dealing structure. By merging with other companies and providing a joint venture inside the Chinese industry Prada can easily increase its business after the Chinese government crackdown. While having a proper building structure as well as background check for the customers Who need extreme amount of luxury goods can be very beneficial for Prada to produce an evidence of fairness to watch the Chinese government until fairly inside the Chinese culture.

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