SWOT Analysis of Gucci | Gucci SWOT analysis 2022

This article talks covers the SWOT analysis of Gucci

Gucci is the name that has been dominating the market of luxury brands. The company that was founded in 1921 by Guccio Gucci, has its headquarters in Florence, Tuscany, Italy. It is one of the brands that show total retail sales were up to 87% of the company’s total revenue. The brand is owned by the French group Kering.

The brand is renowned for its leather goods, fashion, watches, and jewellery. For the last 5 years, the company has been dominating the market, because of its contemporary approach to luxury fashion. The company operates in around 500 stores that are active in 35 markets. Other than this, the company has a limited number of franchises and special offline and online stores for all types of customers.

Let’s have a look at the SWOT analysis of Gucci, a leading luxury company in the world.

SWOT Analysis of Gucci

Internal Strategic Aspects

Internal strategic elements are made up of two parts: the company’s strengths and shortcomings. These characteristics aid the company in determining where it lags behind the competition and where it needs to improve.

Strengths of Gucci 2022

In the first section of SWOT analysis of Gucci we will talk about what are the Strengths of Gucci.

  •  One of the main strenghts of Gucci is the increment in the brand value. In the year 2020, its value was around 17.63 billion U.S. dollars, which is higher than that in 2019, which was around 10.19 billion U.S. dollars.
  • Second in the list of strengths of Gucci is its product portfolio. It deals in various areas from clothing to accessories, and from men to kids.
  •  Gucci’s supply chain, logistics, and information systems have all been improved to make them more nimble, responsive, and capable of absorbing increased demand in the long run. The Group provides knowledge to the brands and uses its collective strength to exert influence.
  •  It has a wide retail network, which makes it the 4th valuable brand in the world with a value of about 27.2 billion U.S. dollars. The main revenue is generated from. The leather products offered by the company.
  •  Another biggest strength of the brand is its partnership with the innovative companies in the market which includes Alibaba Group, and many more.
  •  One of the strengths of the brand is the fashion week organized by the brand, known as Guccifest. This allows them to do whatever they want to without restricting to the limited slot.
  •  The brand has around 500 stores in several countries which include Japan, the U.S., the U.K., and many more.
  •  The brand also participates in various initiatives like CRS. Out of these one was with UNICEF.
  •  The next strength of the company is its highly skilled labor.

 The brand is highly active on social media platforms that increase its brand value.  With the strong presence of social media, the brand has millions of followers.

Weakness of Gucci 2022

  •  The fall in the revenue of the brand was seen in the year 2020 to €7,440.6 million. In the first half the 19. 5% fall of sales was seen in the directly operated stores.
  •  Many consumers of the brand are disappointed with the quality of the products offered by the company. This is leading to the slow growth of the company.
  •  The accusation faced by brands on sweaters with a turtleneck resembling blackface has also led to the fall in the demand for the brand products. The people appealed to boycott the product offered by the brand.
  •  The brand has to invest a huge amount in safeguarding its reputation in the market.
  •  It needs to keep an eye on the up-gradation of the products. This is something which is constantly required.

External Strategic Aspects

Let’s take a look at the external elements now that you’ve seen how internal issues affect the organisation both positively and negatively. The company’s external strategic features in the market are divided into two categories: opportunities and threats.

Opportunities of Gucci 2022

  •   The worldwide luxury market is worth USD 1.4 trillion, with Chinese customers accounting for 33% of the total. Companies that sell luxury goods must today maintain consistency, excellence, and exclusivity in their products and retail locations all over the world. Brands like Gucci, on the other hand, now have the chance to provide Chinese consumers with unique shopping experiences that they cannot acquire at home.
  •  As more people shop online, fashion businesses must adapt their business models to keep up. Gucci may also use AR and VR technology to allow customers to virtually “try on” things from the comfort of their own homes. So,  digital fashion can be a good opportunity for the brand to grow.
  •   The performance and long-term viability of materials are crucial elements in deciding whether or not to use them. In the biofabrication scenario, the combination of bioprinting with nano-bio materials opens up unforeseen possibilities. Gucci can use exclusive fermentation-based technology to create products that aren’t harmful to the environment or animals. Sustainability is a way of life that only works when society, the environment, and good business practices are all working together.

Threats of Gucci 2022

  •  The serious threat to the brand is the emergency of competition. This is from the lower-priced premium brands which are offering similar quality products at lower prices.
  •  The brand should take care of the fractions between the developed economies and emerging markets. As this might affect the growth and sales of the company.

This concludes the article on the SWOT analysis of Gucci.

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