Case study: Bulgari a Diversification Strategy

Résumé du document

First, we have to distinguish two different types of competitors. The luxury brands, whose core activities are jewelry, watches and other personal goods, and invest in hotels don't have the same objectives as brands for which hotels represent the principal activity. If we consider Bulgari, hotels roughly correspond to only 1.5% of its revenues. Concerning others brands like Versace or Armani, it doesn't exceed
5% of the revenues. Therefore, again, we can't put in the same package those two
types of brands.

Even if a new one is in construction and is supposed to open in Dubai within the next two years, the brand has only opened one hotel for the moment located on the Gold Coast in Australia. It has been opened in September 2000 and is told to be the world's first fashion-branded hotel (this is what is written on the official website). The brand has decided to make a joint venture with Sunland Group, which is an Australian development headquarters. The Palazzo Versace Gold Coast is proposing 200 bedrooms and suites.

Extraits

[...] Saturated locations 3. The risk to do not have a clear positioning due to a too much diversification OPPORTUNITIES 1. Renovation of the oldest Palace in the World (such as Ritz), which enables new competitors to enter in the luxury hospitality market Only few competitors in the luxury branded hotel business 3. Luxury hospitality business has grown by in Luxury branded hotels are located in the same places 5. Hotels can perfectly spread the idea of lifestyle brand THREATS 1. [...]

[...] The prices are also in relation with what is usually proposed in this sector. Indeed, all the luxury branded hotels proposed at least at one period in the year a room for a minimum of 550 Euros. We can also highlight from this first analysis that all these luxury brands have realized a joint venture with a specialist of those establishment (like Marriott Hotel International for example) and the different responsibilities are clearly defined between those who are in charge of the global appearance and the specialists, who are responsible for the services. [...]

[...] Bulgari is famous for using a lot of gemstones such as sapphires, diamonds and rubies. Furthermore, the way to work with colored precious stones enables people to recognize the product as a Bulgari item. Extravagant, logo The presence of the logo is really important because the only logo is the name of the brand but not a shape or an image as other luxury brands. The fact that the logo is written in every products, in a conspicuous way, is the main thing permitting the identification of the brand and giving a social distinction and identity to the owners. [...]

[...] Financial Times Bulgari SpA: Net rises 50% on strong sales of higher-margin products. (2004, Nov 15). Wall Street Journal Doulton, M. (2010, Mar 19). Bulgari bids farewell to mickey mouse. Financial Times. [...]

[...] If we consider Bulgari, hotels roughly correspond to only of its revenues. Concerning others brands like Versace or Armani, it doesn't exceed of the revenues. Therefore, again, we can't put in the same package those two types of brands. Versace Even if a new one is in construction and is supposed to open in Dubai within the next two years, the brand has only opened one hotel for the moment located on the Gold Coast in Australia. It has been opened in September 2000 and is told to be the world's first fashion-branded hotel (this is what is written on the official website). [...]