Ch. 2 - Strategic Planning for Competitive Advantage

Chanel is a global leader in the fashion world. For Chanel to continue its success, it must have the knowledge of strategic planning for competitive advantage. Strategic planning is the managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities. Performing SWOT Analysis allows firms to identify their competitive advantage. 

SWOT Analysis of Chanel

SWOT Analysis is a useful strategic tool for analyzing the organization's strengths and weaknesses, and the opportunities and threats that the company faces. It helps the organization to focus on the strengths, improves the weaknesses, take advantage of the opportunities that the company discovered, and to eliminate the threats. Below is the SWOT analysis of Chanel:

Strengths
➟ The brand has strong equity and loyalty.

➟ Cult Designer  Karl Lagerfeld- the Chanel Chief Designer who is leading Chanel to another peak in its fashion development.

➟ Most clothing pieces and accessories made are used with high quality and classy materials and fabrics.
➟ Chanel S.A. operates more than 300 Chanel boutiques around the world.

Weaknesses
➟ For some price of Chanel is expensive for most working class.
➟ Limited online shopping availability, you can only purchase cosmetics and fragrances online.
➟ Chanel limited production on certain products after a period of time, especially in beauty supplies production.

Opportunities
➟ Increase marketing in social media in order to keep up to date.
➟ Expanding business in emerging market more rapidly.
➟ Expanding deeper in Asia like China and India where there is huge economic growth.

Threats
➟ Counterfeit goods and illegal use of its double-c logo.
➟ Facing strong competitors.
➟ Other cheaper and lower brands trying to copy Chanel timeless styles and selling at much affordable price.

Competitive Advantage 

Chanel's main competitors in the same market are long-standing fashion houses like Hermès, Louis Vuitton, and Prada. Chanel’s designs are different than others. It presents new products frequently but always maintains its classic themes. Chanel distributes the fragrances and beauty products separate from other product. Fragrances and beauty products are available in the Macy's and Bloomingdales and also on the Chanel's website. One of Chanel's marketing strategic methods is the products like clothing, luxury accessories are only sold in the store. Chanel online purchase is only available for the fragrances and cosmetics. Bruno Pavlovsky, president of Fashion, Chanel told the Business of Fashion, "It's a strategic choice. It's a choice to say: 'Guys, you can see whatever you want on the internet, but we want you to come to the boutique, because we feel that in the boutique we can give you the right understanding of the brand.' So, yes we could sell handbags on the internet. But my feeling is that it's not qualitative enough and it's not the kind of service that we want to give to our customers - at the moment."
 
Four Ps

The four Ps is one way, probably the best-known way, of defining the marketing mix. Marketing Mix is a unique blend of product, place, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. Here is the four Ps of Chanel S.A.:

Product ➥Specializes in fashion and clothing, fine jewelry, watches and accessories, perfumes and cosmetics. ➥Designs focus on fashion without  losing unique characteristic. ➥Elegance, simple, and refinement. ➥High product quality ➥Simple packing but beautiful.	Place ➥Operates more than 300 boutiques worldwide; 94 in Asia, 70 in Europe, 10 in the Middle East, 128 in North America, 2 in South America, and 6 in Oceania. ➥Online shopping of fragrances and beauty products are available within certain countries.
Promotion ➥Advertising through TV, internet, news, and magazines like Elle and Vogue. ➥Give out samples of fragrances and beauty products. ➥Held fashion shows fours time a year to introduce each season's newest looks.	Price ➥Average prices compared to other similar world top raking companies.