Parenting Advantage in Luxury Retailing.pdf

The Nature of Parenting Advantage in Luxury Fashion Retailing – Retailing  – The Case of Gucci Group NV

According Jackson and Haid, luxury brands have a heightened status that affords an opportunity for their owners to charge premium prices. Luxury brands possess intangible value that extends beyond the product’s function, in the contrary, the customer or owner a high class status. P hau and Prendergast proposed four central features of a luxury brand as perceived exclusivity; well recognized brand awareness and strong sales and customer patronage. Meanwhile, Beverland provides a model of a luxury branding which branding which identifies and unites six component dimensions.

Culture

Value Driven Emergence

Marketing

Luxury Brand Hostory

Endorsements

Product Integrity

Parenting Advantages

The relationship between parent company and its subsidiaries is more than how subsidiaries give benefit to the parent. Moreover, experts have been research how parent companies contribute to the achievements of subsidiary competitive advantages. The fundamental role of the parent is to create vale for the subsidiary, due to influence the decisions and strategies of its business, while standing between these business and those who provide capital for their use. Parenting advantages necessary depends upon the strategic fit t hat matches the core skill, expertise and resource of the parent company with the improvement requirement of the subsidiary company. Realization of parenting advantage necessitates a consideration of the skills available to the parent company that may be of strategic use to the subsidiary as well as the mechanism which facilitated the transfer of this from t he parent to subsidiary. The approaches of value creation ftom parent to subsidiary are :

1. Stand alone influence – the parent company influence the strategies ad performance of each business in the parent’s ownership by viewing each as a stand-alone profit centre in its own right. 2. Linkage influence – the parent company seeks to create value by enhacing the linkage that exist between the business units that it owns 3. Functional and service influences – the parent’s corporate staff function and service which create vale by providing functional leadership and cost-efficient services for bussineses . 4. Corporate Development activities – the parent change the number of business in its portfolio by buying, creating, and selling new business. Therefore, the parent can create ( and destroyed) which maybe subsquenstly created through any o ngoing parental influent The letter propose that the framework of parent company characteristics and vale creation method requires that management rethink the appropriateness of those corporate structures that evolved accidently. Suggested that the four value creation opportunities can be difficult to utilize in practice due to their strong dependence upon situational characteristics.

Parent Company Charateristic The parent mental maps

The parenting structures, system and process

Function, central service and resource

People and skills

Decentralization contracts

Description The rules and models that parent management use in order to interprete and sintesize information. This serve as a blue pint for management decision- making and explain parent of behavior. This are the mechanism through which the parent creates value. This dimention include budgeting and planning, capital approval system and decision making procedures. The corporate staff and department and cental asset that support subsidiary management in the value creation process. Parent may create competitive advantage as a result f expertise and skills of key individuals wth vision whi serve to inspire in the organization. The jurisdiction distinction between the parent and the subsidiary company in relation to decision making power and budgeting authority.