حل واجب lb160

Faculty of Business Studies

LB160: Professional Communication Skills for Business Studies

First Semester 2013-2014

PART 1 (10 points)

In about 300 – 400 words, write an essay analyzing the below case study using the SWOT framework.

PART II (10 points)

Diversification is a corporate strategy to increase sales volume from new products and new markets. GIORGIO ARMANI is already one of the most diversified brands in fashion. Choose a diversified brand other than Giorgio Armani and discuss the reasons that have driven the brand to diversify its products and the effects that this strategy has had on the brand.

At least 2 outside resources are to be used. The resources are to be submitted to the tutor. The criteria on pp. 50-53 of B2S2 should be observed while locating source material.

Breaking into new markets

Should luxury goods firms go into the hotel business?

GIORGIO ARMANI is already one of the most diversified brands in fashion. As well as haute couture and everyday clothes, Mr. Armani and his firm create scent, cosmetics, spectacles, watches and accessories. Customers can purchase Armani furniture, flowers, chocolate, sweets, jam and even marmalade. There are Armani cafés and restaurants in Paris, New York, London and other cities. An Armani night club recently opened in Milan. Now Giorgio is branching out still further. On February 22^nd his firm announced a $1 billion hotel venture with Dubai’s Emaar properties, the Middle East’s largest property developers. Mr. Armani will be in charge of the design for ten new hotels and four luxury resorts, to be built in the next six to eight years.

Armani’s is the boldest move so far by a luxury goods company into the hotel business. But it is by no means the first. In September 2000, a hotel designed by Donatella Versace opened on Australia’s Gold Coast. In February 2001, Bulgari, an Italian jeweler, confirmed a joint venture with Ritz-Carlton to build six or seven hotels and one or two resorts. Salvatore Ferragamo, an Italian shoemaker, has designed four hotels in Florence.

But in the first half of last year, both the fashion and travel industries were doing badly as travel and luxury follow the same economic cycle. So does it make sense for designers of luxury goods to go into the travel business? Armani and Bulgari would say yes. Mr. Armani considers hotels a logical extension of his aim of promoting his brand in all walks of life. (So can Armani toilet paper be far behind?) Rita Clifton, Chairman of the consultancy Interbrand, says that this strategy can work. A strong product, strong images and a strong experience, such as staying at a fashion designer’s hotel, can combine to make a super-strong brand, claims Ms. Clifton. To fit the firm’s luxurious image, Bulgari says that its hotels must be as upmarket as it is possible to be. Because small is considered more exclusive, Armani and Bulagri plan to launch mostly smallish five-star hotels. Armani’s Dubai hotel will be an exception, however, with 250 rooms. Bulgari’s Milan hotel will have no more than 60 rooms.

Losing control of their brand is the biggest risk for luxury firms expanding abroad or venturing into a new line of business. Over the years, Pierre Cardin, Yves St Laurent and Christian Dior have each lost their goods by giving out licenses all over the world to firms that did not deliver the appropriate quality. Calvin Klein’s current problems are related to the company’s loss of control of the distribution of its products in many countries.

But designers’ hotels can generate positive publicity. Even if Bulgari’s hotels turn out not to make any money, the venture could be seen as an expensive yet effective advertising campaign.

Mr. Armani’s hotel plans are more ambitious and the danger of brand dilution much greater. Armani says that the management company for its hotel venture will have its head office in Milan rather than Dubai and that Mr. Armani will be fully in charge of design. So far Mr. Armani has managed to control his brand tightly despite being involved in many different businesses. Hotels, however, are a bigger challenge than flowers and marmalade. 

Taken from: Trappe, T. & Tullis, G. (2005). Intelligent Business. England: Longman.

__________________________________________________________________________________

PART II (10 points)

Diversification is a corporate strategy to increase sales volume from new products and new markets. GIORGIO ARMANI is already one of the most diversified brands in fashion. Choose a diversified brand other than Giorgio Armani and discuss the reasons that have driven the brand to diversify its products and the effects that this strategy has had on the brand.

At least 2 outside resources are to be used. The resources are to be submitted to the tutor. The criteria on pp. 50-53 of B2S2 should be observed while locating source material.

Purpose:  To write a well-structured essay.

Learning Outcomes: (B2S3 pp.69, B2S2 pp.41, & B2S4 pp.98):

·         to analyse an essay title to be clear about its requirement

·         to develop an argument that is relevant to the essay title

·         to select and manage essay source material

·         to paraphrase and use business studies language

·         Review features of essay writing.

Comments: The student needs to select a specific brand that has diverse products, discuss the causes behind this strategy, and the effects that diversification has had on the brand. Paraphrasing, summarizing, and citing the sources used are essential since using the words of others or including their work without acknowledgment is considered plagiarism. The Harvard referencing system, as presented on pp. 167-171 of B2S6, should be respected regarding the in-text referencing as well as the reference list.