Ellie Saab Case Study Essay

Published: 2018-08-10 04:47:57
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University of California, Santa Barbara
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Ellie Saab Introduction

The Ellie Saab case study looks at the sample company that has made some progress with regards to strategic management and high growth. The company, in recent years, has engaged a growth strategy from the Ready-to-Wear product line that has improved company growth to an immense average of 26%. As a result, the company has enjoyed increasing market share with decreasing operating costs – the dream of every sustainable enterprise. Nonetheless, some challenges have been faced. This paper looks at the bases of this company and addresses specific questions to show the synthesis of the article. 

Ellie Saab is a company that is largely in the apparel business. The core business is providing apparel that is both appealing and competitively priced with other couture apparel designers, such as Dior, Chanel and Valentino. Therefore, the core business of Ellie Saab is to provide outstanding quality services for the crème of apparel in the industry. ES has since become a world-renown apparel provider among the world’s elite. 

ES can be compared within the environment in which it operates through conducting a SWOT analysis. Having been established for some time now, the company has experienced sufficient market competition to establish a strong brand name. Nonetheless, there are certain factors that need to be considered within the industry that the company operates in. the following table summarizes the strengths, weaknesses, opportunities and threats. 

Strengths

Weaknesses

1.      Strong management

2.      An outstanding and established brand

3.      Product innovation

4.      Customer loyalty

5.      Product uniqueness

1.      Weak cost structure

2.      The lack of online presence

3.      A lack of diversity

Opportunities

Threats

1.      Acquisitions and mergers strategies

2.      Online marketing strategies

3.      Innovation

4.      New markets in developing countries

1.      Taste changes

2.      Bad economies

3.      Matured markets

Stage of Product Development

When considering the ES brand, certain factors come into consideration especially with regards to the evolution of company products. Having reached the point in the company’s product portfolio where growth is no longer the greatest thing, but the need for sustainable growth from then on, we can safely say that the company is in maturity stage. Here, the company management is devising ways of maintaining the market share that they have obtained from their niche product. At the maturity stage, there is a relatively stable or minor increase in growth since the company has enjoyed longstanding growth from the product. Additionally, competition in the market at this point I relatively steep as competitors bring their own alternatives to the market (Stark, 2015). The result is that the company experiences relative stability in growth and sales, reaching a plateau of peak performance.    

The company has evolved over time. It began with the vision of providing specific quality apparel to the super-wealthy individuals. Specifically, ES would avoid the affluent middle class by ensuring that the pricing differentiation would lock this group out. The result was that the company would gain market recognition as one of the brands that are rare and not easily accessible to large amounts of people. The company has maintained this view in recent years to continue providing exclusive wear to the wealthy market. 

ES Entry Strategies 

The company makes use of the flagship stores as the main entry strategy into new markets. ES, for example, moved into Dubai by setting up a flagship store in the famous Dubai Mall. The latest apparel and shoes were available at the flagship store, and was open to both local and international shoppers at this location. With regards to aligning to the company’s objectives, the flagship stores as an entry strategy is in line. This strategy allows the company to explore high profile areas where its products will be recognized as high-end by the users. The locations in Paris, Beirut and London, for example, show ES preference for high end cities and streets. The new outlet in Dubai is located on one of the most posh streets in the country – further stating the company’s commitment to accessing the high-end market of each new location it explores. 

Exploring New Markets

With the company moving in different parts of the world, high-end shoppers are no longer the only target market that ES should be looking at. Moreover, there are economic reasons behind the company’s approach to multiple market segments. Economic situations that are unfavorable in nature would render the company unable to operate. Therefore, it becomes necessary to target the emerging middle class, who are quite affluent as well. This could be done through creating middle-high end products for this target population. Moreover, the market has already gone into maturation with the current products. To raise the company again to additional growth, it would be profitable to look into emerging market and exploit excessive income among affluent middle class individuals. 

While the company’s objectives is largely surrounding the provision of quality services that are not easily accessible to the larger public, it would be unnecessary to explore markets that would open the company to wide distributorship of its products. The company intends to remain exclusive to a certain economic class. As a result, opening the doors for every person to access ES clothes would be an unwise move as the company would quickly lose value. 

Recommendations

ES has enjoyed steady growth over the last few years following the launch of the ready-to-wear range of products. Product innovation in this area, including the innovation of products that would include the affluent middle class, would be beneficial to the company. Engaging this move would encourage the stimulated growth of products that the company has to offer. Additionally, the company would enjoy growing market share in worldwide markets as the affluent middle class continues to grow. This section of the population will ensure that growth for company expansion can be assured. 

On the other hand, it becomes necessary that the company considers other entry methods within a country aside from investing in prime property in high-cost regions. At this juncture, the company could explore the online platform for the worldwide distribution of its products (Lindgardt, Reeves, Stalk Jr, & Deimler, 2013). Notably, the physical location may be limited in serving even the existing super-wealthy populations of the world. Nonetheless, an online presence assures the company of having a worldwide market. Considering the brand of the company this move would improve overall sales and boost growth.  

References

Lindgardt, Z., Reeves, M., Stalk Jr, G., & Deimler, M. (2013). Business Model Innovation: When the game gets tough, change the game. Own the future: 50 ways to win from The Boston Consulting Group, 291-298.

Stark, J. (2015). Product lifecycle management. In J. Stark, Product Lifecycle Management (pp. 1-29). London: Springer International Publishing. 

sheldon

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