Managing Luxury Business (MK 260)

Managing Luxury Business

Prof. Ashok Som (som@essec.edu) and Prof. Prasanth Mishra (prashant@iimcal.ac.in)
Note: This course is an elective course and as the name suggests focuses only on the Luxury
Industry.

Objectives: The world of the luxury business is being transformed. The luxury industry primarily originates from
France and Italy but as the world is becoming ‘borderless’, luxury houses are being corporatized. The local luxury
houses are being transformed to global corporations as they start competing across the world and not only in their
home markets, Consolidation through mergers and acquisitions, distribution through global retail networks are the
only way to build multi-brand conglomerates to reach size, scale and efficiency and reach wealthy consumers across
the globe.

As the luxury houses become global firms (to begin with we define them as MNCs) they like any other firms
encompasses any problem or opportunity, in the areas of finance, production, marketing, information technology,
and human resource management. This course draws from both the external and internal environment, and macro
and micro economies of the firm focused on the business of luxury. Hence it is both interdisciplinary and
integrative.

Topics covered: The course will deal with the following issues (a) Introducing strategy tools and concepts
(b introducing the key players in the Luxury industry and their globalization strategies? Did role of the state play a
part in the evolution of the luxury industry? (d) organization of structures in the evolution of the luxury business? (e)
the role of culture in the creation and of the luxury business and its transformation during the democratization of the
luxury (e) as luxury companies move from family businesses to global corporations how do they ‘manage change’
in this process? (f) How does one manage Talent in the Luxury industry? (g) is the lure of emerging markets in the
Luxury industry is here to stay? (h) Asia’s involvement in the growth of the luxury business (i) sustainable Luxury
and CSR Strategy

Teaching methods: The approach taken to deal with these queries will be managerially oriented. We will use a
combination of theory and case studies to probe your contextual familiarity, analytical abilities and debating skills.
To be an effective manager in an international context you have to be aware of your own orientations, your values
while learning to listen sensitively to others. This methodology will attempt to maximize your learning experience.
In-class discussions and exchanges will be a critical part of the course. Maximum benefit (both learning-wise and
grade-wise) can only be assured by your attending class prepared, the quality of your presentations, ready to listen
to and debate with your class members.

3| Teaching methods

The approach taken to deal with these queries will be managerially oriented. We will use a combination of theory
and case studies to probe your contextual familiarity, analytical abilities and debating skills. To be an effective
manager in an international context you have to be aware of your own orientations, your values while learning to
listen sensitively to others. This methodology will attempt to maximize your learning experience.

In-class discussions and exchanges will be a critical part of the course. Maximum benefit (both learning-wise and
grade-wise) can only be assured by your attending class prepared, the quality of your presentations, ready to listen
to and debate with your class members.
 4| Evaluation and grading

COURSE REQUIREMENTS

• Class Participation & Attendance 25%

• Regular Group Work (5 member Group) 40%
• Individual Research Report 35%

Total 100%

5| Outline
 Session 1

Topic
Introduction to the Course:
Marketing Strategy Tools

Session 2-3 Session 4

Topic Topic
MNCs, Globalization, Role of the State, Country of Origin Globalization and Luxury Business: The Actors
Case: The ’Invisible Hand’, De Beers, and
Case: Coach: To be or not to be Luxury?
Emerging Markets
Background Reading:
Technical Note (A): Overview of the Global
Luxury Industry

Session 5-6 Session 7-8

Topic Topic
Managing Multi-Brand Conglomerate Organizing International Operations and Expansion
Case: Rolex
Case: LVMH

Session 9 Session 10

Topic Topic
The People Factor Luxury & CSR

Case: In-Class Case Case: Estee Lauder

Background Reading: Technical Note (B):

Luxury Industry in Emerging Markets
(India & China)

Session 11 Session 12

Topic Topic
The Luxury Consumer Luxury Brand Management
Case: BMW
Case: Neiman Marcus

Session 13 Session 14

Topic Topic
Structure of the Luxury Organization Service in the Luxury Industry
 Case: Gucci Case: Plaza Athenee

Session 15 Session 16

Topic Topic
Luxury Retail Distribution Pricing of Luxury Products

Case: Armani Case: Chateau Margaux

Session 17 Session 18

Topic
Emerging Market and India
Topic
Designing and Managing CRM Case: HiDesign
Case: Harra Entertainment
Background Reading: Technical Note (C):
Issues of Luxury Industry in Emerging
Markets

Session 19-20

Topic
Research Project
- 25 pages maximum (with exhibits, bibliography, 11
point font, 1.5 spacing)
- Report with examples, graphs, charts and frameworks
(used in class)
- Secondary sources such as website, annual report, work
experience, business press, database – Factiva;
Datamonitor etc
- The Report should integrate the readings, concepts and
the understandings from the course.
- Deadline for submission: 12:00 Midnight the day before
the 18th Session

6| Bibliography

Session 1
Competition and Business Strategy in Historical Perspective (HBR Note # 9-798-010)

Reference Books(s)
Michel Chevalier & Gerald. Mazzalovo. (2013). Luxury Brand Management: A World of Privilege . Wiley.
Jean-Noel Kapferer, Vincent Bastian. (2013). The Luxury Strategy: Break the Rules of Marketing to Build
Luxury Brands. Kogan Page.
Michael Boroian & Alix De Poix (2009). India by Design: The Pursuit of Luxury and Fashion. Wiley.
Ashok Som (2009): International Management. McGrawHill, UK.