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Van Cleef & Arpels Brand’s Strategic Analysis Research Paper

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Updated: Jan 19th, 2021

Innovation and design

Strengths

The company produces jewelry and diamonds for the retail sector, and its tagline is ‘timeless beauty’ while its unique selling proposal is to offer innovation in product, creativity in designs, and distribution channels. The company enjoys its heritage as the first jewelry house on Place Vendome and a pioneer in high jewelry.

Weakness

Frequent redesigns of collections should not be in place. Brands need to sustain a stable image. It has to avoid responding to consumers every time. The company does not have to acquire or build a jewelry brand as it already has one that can benefit from increased marketing and brand positioning.

Branding

Strengths

Its rich history of using rubies and Safire for its pieces has lasted four decades, and it continues to serve as the main appeal of the brand. The rich history and designs present the platform for setting the price of the products as a luxury. Nothing is communicated about pricing in any marketing or product description for the company.

Opportunity

The company has a common owner with Cartier and can borrow on the multichannel strategies of the latter to improve its awareness for luxury jewelry in its target markets.

Threats

Overall, global luxury sales are falling and rebounding only marginally because there is an increase in the number of companies abusing the luxury tag and presenting affordable luxury products (Gapper, 2015).

Corporate Strategy

Strengths

Richemont acquired the brand in 1999, and the new owner has a significant interest in luxury brands and companies that offer Van Cleef & Arpels sufficient knowledge and experience in executing luxury-based marketing strategies for increased sales or valuation (Som & Blanckaert, 2015). Jewelry is becoming the fastest seller in luxury brands, placing Van Cleef and Arpels in a good position to cash on the trend.

Threats

The grounds for increasing prices are reduced as the demand slows and the price of raw materials increases, which will likely have a negative impact on overall revenues of the company. A new owner may not understand the company well due to insufficient brand awareness.

Website/E-commerce

Strengths

Rather than sell online on its website, the company is using the site to engage its consumers with courses on jewelry and watchmaking. It is also offering links to download its iPad applications (Van Cleef and Arpels, 2015). It has also used the website to communicate its brand values for its heritage, creation, and inspiration.

Weakness

The website does not provide significant affluence feel. In addition, the website and e-commerce strategy may become too simple to sustain a luxury feel on consumers. Website design can be improved to communicate brand values.

SCM

Strengths

The company keeps its suppliers secretive to protect designs and other assets. Therefore, the company has a chance to have programs with suppliers to fight counterfeits to protect customers against non-customers.

Threats

Secretive dealings can hurt accountability and lead to dilution of the brand through counterfeits. Company must recognize the looming threat of counterfeits created by the secretive dealing with suppliers. They destroy brand value by increasing alleged product access. Customers also get them cheaply and fail to see it as luxury.

Sustainability

Weakness

The company does not have elaborate sustainability strategy for its brand amid competition. In addition, its limited expansion strategy can hurt long term sales. It must careful evaluate its position for every move it takes.

Opportunity

For its timepieces, the company has the potential of communicating to values that are enshrined in artistic pursuits, especially about the history of its Poetic Complications collection. The company already has excellent collection of products offers long-term revenue guarantees.

Internationalization

Strengths

Gradual expansion strategy helps prevents pitfalls in the expansion. It is important for brands to make it difficult for clients to buy. A slow expansion ensures that is true.

Weakness

The company relies mostly on high-income societies and targeting of events like bridal parties as occasions for gift giving. However, it has also been subjected to the economic up and downs of the most promising markets for its goods, including China. The company has been concentrating on volume sales as it seeks to appease its shareholders, which made it too invested in the Chinese market (Gapper, 2015). This goes contrary to the anti-laws of marketing.

Opportunity

An increase in boutique stores in many countries with an affluent middle-class population. They will help to increase the imagined price of luxury. This price should always be higher than actual price.

Threats

It remains vulnerable to changes in economic conditions such as taxation or recessions. This does not go well for the company that otherwise has an overall weak market share globally. The parent company, Richemont has been negatively affected by the scrapping of franc’s peg to the euro that has resulted in a massive reduction in valuation which, may affect the company’s ability to execute its corporate strategy such as refinancing to build operations capital for marketing and revamping of its boutique stores around the world (Martin & Armstrong, 2015).

Ethics

Strengths

The company has presented its functionalities of watches in incredible ways, such that users get a poetic value from the watches as much as they remain ever fascinated by the design (Jasper, 2014).

Weakness

Luxury brands that are very pricey like Van Cleef are likely to evoke distaste and hatred that makes would be consumers guilty of purchasing the brand (Gapper, 2015).

Opportunity

Having a rich history and being the most complicated to date, in addition to handcrafting and association with top couture designers of the world is a brand attribute worth emulating for sustainability.

Threat

Growing wealth inequity is raising brand ethical challenges in societies around the world. Luxury brands are prone to ethical accusations by consumers who see them and their consumers as the source of problems of economic and social inequality. The brand should be working hard to sustain this position through good public relations.

References

Gapper, J. (2015). Luxury goods face a global reckoning. Financial Times. Web.

Jasper, K. (2014). Hodinkee. Web.

Martin, B., & Armstrong, A. (2015). The Telegraph. Web.

Som, A., & Blanckaert, C. (2015). The road to luxury: the evolution, markets and strategies of luxury brand management. Singapore: John Wiley & Sons.

Van Cleef and Arpels. (2015). Diamond Breeze. Web.

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