Case background analysis:

With the rising demand and need for expansion of the current setup, managers need to
implement strategies to stay ahead in business. Elie Saab and his manager have formulated a
sound expansion strategy for the upcoming 5 years. The strategy should reduce the threat of
the dilution of the brand because of expansion into the other fields and focus on the selection
of partners and new markets for doing business.

It can also be seen that the trends of the fashion market are changing, women are moving
from formal dressing to a more casual approach which is also an issue for the brand. On the
other hand the case also describes that with the changes in the economy the number of high
net worth individuals who are the main target segment of the company are increasing which
is opening avenues for the company to expand the business.

The Company: History

The fashion brand of Elie Saab which masters the creation of wedding dresses, RTW clothes
and accessories has their main office located in the Lebanon city of Beirut. The company has
also expanded and opened its boutiques in Paris and London with a total number of location
amounting to 60.

The founder of the company Mr. Elie Saab was born in the Lebanese city of Beirut where he
stated working at an early age of 10. With a keen interest in designing he started making
clothes with the curtain and table cloths at home. It is in this city only that he started his first
workshop when he was about 18.

The initial display of his collection of dresses took place in his own city for he got much
appreciation and renown. Around the year 1981 Elie moved to the world fashion capital of
France to study Fashion and then returned to his hometown. The first international orders he
received were from France and Switzerland. In 1997 the Elie Saab brand became a part of the
Italian National Fashion House and it was the first non Italian brand to have received this
honour. The first place the brand showcased their clothes outside their country was Rome and
then a year later in Milan.

The ultimate international popularity the brand gained was when Hollywood actress Halle
Barrie wore Ellie Saab for the red carpet at The Oscar and her look was awarded the best
Oscar look in the past 75 years. In may 2003 Elie Saab was invited to become a member of
the Syndicate of Haute Couture where it showcased its collected in the fashion week and
gained a lot of media coverage for the same.

The company had started expanding its based around the world with the first strategic
alliance being with Dubai hotel chain to design and produce signature designer hotels. In
2008 the company also started its standalone stone in London and also expanded its product
line by introducing Elie Saab perfumes which also symbolised the features of the brand.
During 2010 to showcase the luxury of the brand the company entered into a contact to
design the interiors and art of living for a Yatch for the Abu Dhabi Yatch show. Further
expansions of the company included opening of a store in Dubai to meet the local demand as
well as the demand of the foreign tourist. This was also a strategic move as we can see that
there was a grown in the number of high net worth individuals in this region.

Marketing and Operations of the company

Currently the company employed 150 full time employees. The functioning of the company
was divided into 2 parts- The Creative and the Business. The creative part was managed by
Elie Saab himself while the business operations were undertaken by Cavalcanti.

The product line of ES included:

Ready to wear
Haute Couture
Wedding dresses

Distribution strategy of the company mainly included the company stores, retailers and
partner stores, where as the most important aspect of the marketing activity was good after
sales service. If someone bought a haute couture gown they could get it fixed and altered for
a lifetime. The unpaid marketing benefit that the company got was from celebrity
endorsements and media coverage at various events where the celebrities wore these gowns.
To build the public relations of the company they had 3 communication offices.

The brand was also into social welfare of women and children and also helped new designers
with their training programs. The dresses that were showcased at the events were not sold but
they were archived and pictures were used to develop marketing material. The ready to wear
products ranged from 1200$ to 22000$ and the haute collection that only a select few could
afford was priced from 30000$ to 1000000$. The haute collection was priced so high keeping
in mind the type of customers they were targeting.

Analysis

As far as the strengths of the business are concerned, first is that Elie Saab is a member of the
chamber of syndicate la couture and also has direct ownership of its stores except in Dubai.
The direct ownership will benefit Elie Saab in terms of learning more about the local market
which will help it analyse the local fashion trends enabling them to serve the customers
better. Elie Saab being himself involved with the haute couture customers gives them a sense
of satisfaction and increases personal touch.

Talking about the weakness of the brand could be that they have entered into a lot of products
when they were trying to expand their business which could lead to the dilution of the image
of being haute. The sales of the company in USA, Russia and Asia are still low. They should
keep in mind that the opportunity for them lies in those market where the number is high net
worth individuals is high or increasing. They have also not mentioned of any activities of
expansion being done by the brand of the internet front. The main threat for the brand comes
from the fact that the preferences of the consumers are changing. Even the high profile
women are opting for casual clothing instead of very formal clothes. If the company enters
into more casual clothing their brand identity might get lost.

Recommendations:

There is a very good scope for Elie Saab to open stores in Asia concentration on Hong Kong
and China as these are the places where the number of HNWIs is increasing. Increasing the
presence of the brand globally will also be beneficial for the brand. If the company wants to
diversify then they could enter mens clothing, eyewear and swimsuits. They should develop
strategic business units for their different lines so that they are able to enhance their
operations capabilities keeping in mind the luxury, creativity, exclusivity and premium status.