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Hermès – Strategy Insights Of Luxury Brand

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Hermès, a French fashion luxury goods manufacturer, has been ranked consistently as world’s most valuable luxury brand and one of the best global brands.  Hermès, which is also known as Hermès International or Hermès Paris, has maintained an iconic status in the luxury market with products ranging from leather goods, perfume and lifestyle accessories to watches.

In 2018, the Company’s net profit rose to 1.41 billion euros, a 16 % increase from 1.22 billion euros in 2017.  Fifty percent of the Company’s profits came from the brand’s leather goods and saddlery products. With competitors like LVMH and Richemont in the luxury business, Hermès still enjoys the top position in the market because of its exquisite craftsmanship and eye for detail through the entire manufacturing process. 

 

History

 

Founded in the year 1837 by Thierry Hermès, the Company’s initial purpose was to build saddles, bridles and other leather riding gear for European nobility.  After taking over the Company from his father, Charles-Émile moved the Company to 24 Rue Du Faubourg Saint-Honore in Paris in the 20th century. This remains the global headquarters of Hermès till date.

Through the generations, the Company slowly expanded from selling leather saddles to other products.  The Company started selling “Haut à Courroies” bags in 1900, which were used by riders to carry saddles in it.  The Company introduced its first leather handbag in 1922, a product which has played a significant role in increasing the popularity of Hermès in the global market. 

 

Strategy

Hermès has a unique strategy in place to ensure it retains its position on top in the market.  Hermès is very strict about the traditional way of manufacturing and rejects any form of mass production.  Every product produced by the Company is handmade by craftsmen who are trained for a period of two to three years.  According to the Company, every product is made from beginning to end by a single person to preserve the product quality and uniqueness.

Jean Louis Dumas, the chairman of Hermès from 1978 to 2006, told Vanity Fair, “We don’t have a policy of image; we have a policy of product.”  Hermès has always claimed, it values creativity more than anything and to this day, maintains a deep connection to its French identity.  Most of Hermès’ products are manufactured in France and 60 % of the Company’s workshops are located in different parts of the Country.

Another strategy the Company uses is giving a sense of exclusivity.  In order to do so, Hermès uses the “Limited Edition” strategy and releases only a handful of products at a time.  The Birkin bag, created by Hermès for Jane Birkin in 1982, remains the most popular product by the Company. One of the reasons behind this is the brand’s strategy to make the customer wait for a few months or a year after making an order.  The cost of each Birkin bag ranges from 7,000 USD to 300,000 USD. Every Birkin bag is made of crocodile skin and has exquisite handiwork by a single craftsman.

The brand continuously collaborates with other ultra luxury brands to maintain its reputation in the market.  Hermès has collaborated with luxury designers like John Lobb, Saint Louis as well as tech mogul Apple. Each collaboration brought the Company media attention and skyrocketed its brand value and sales.

 

Keeping it in the family

For the last 180 years, since the founding of Hermès, it has been run exclusively by the Hermès family.  Currently, the brand is managed by Axel Dumas (6th generation,) who is the sole manager of the Company. The Company maintains its independence and uniqueness by keeping the control within the family. 

 

Even though Hermès  is 180 years old, it still maintains an ultra luxury status because of its ability to evolve by maintaining a perfect balance between tradition and modernity.  With its clever strategy of exclusivity, controlled marketing and limited edition, Hermès is able to engage potential and wealthy clients, which ensures continuous profits and growth of the Company.

 

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Entrepreneur Stories

Panasonic Founding Story – Journey of Konosuke Matsushita

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Panasonic Founding Story,Journey of Konosuke Matsushita,Startup Stories,Real Life Inspirational Stories,History of Panasonic,Panasonic Success Story,Panasonic Founder Story,Konosuke Matsushita Story,Panasonic Latest News

From starting his journey with an electric light bulb idea to creating a multinational electronics corporation, the rags to riches story of Konosuke Matsushita is truly inspirational.  Known as the “God of Management,” the founder of Panasonic was involved in many other business ventures, which, together, gave him a net worth of $ 3 billion.

 

Matsushita had humble beginnings.  Being born to a gambling father, Konosuke Matsushita started working at the age of 9 to support his family.  Eventually, he started working for the Osaka Electric Light Company, where he climbed the ladder of success very quickly, without any prior school education.  This is the company where he came up with the design of an improved light socket, which was far superior than the bulbs available at the time. After getting rejected by an unenthusiastic boss, Matsushita took it upon himself to sell the light bulbs and started his own company.

 

At the age of 23, in 1918, he founded the Matsushita Electric Industrial Company and began making light bulbs in his garage, with the support of his wife and 3 assistants.  The business was unsuccessful in the early years, but the sales picked up with time. By 1922, his Company, which now had a new factory and 50 employees, started introducing new products every single month, which were far superior than the competitors’.  Matsushita’s business strategy was to launch products which were lower in price by 30 % and better in quality by 30 %. 

The battery powered bicycle lamp is considered one of Matsushita’s  best inventions. Candles and oil lamps were used as bicycle lamps in the 1920s and only lasted a few hours.  With a keen eye to identify markets with non serviceable goods, Matsushita quickly realised, developing efficient bicycle lamps would be profitable for the Company.  He created oval shaped lamps, which had light bulbs for illumination and ran on battery. 

 

In 1930, when the Company’s sales dropped, Matsushita truly proved his leadership and  management skills. He cut the production in half without laying off any employees. He said, “We’ll halve production not by laying off workers, but having them work only half days. We will continue to pay the same wages they are getting now, but there will be no holidays. All employees should do their best to sell inventory.”  According to Panasonic, this strategy worked and the company survived.

 

In 1935, the Company, bearing in mind its various businesses, was incorporated as Matsushita Electric Industrial Co., Ltd.  The Company suffered greatly during World War II as Japan lost the War, but was saved due to Matsushita’s amazing skills as a leader.  In the post War era, the Company came out with devices like washing machines, rice cookers, air conditioners and the product for which Panasonic is most famous—monochrome televisions (TVs.)  The Company also started expanding globally during the 1950s and introduced its first colored TV set in 1960.

 

After Konosuke Matsushita retired in 1961, his son in law, Masaharu Matsushita, became the president of the Company.  Post Konosuke Matsushita’s retirement, the Company was faced with the 1970s oil crisis, but managed to overcome it and only continued to expand its business.  Konosuke Matsushita passed away in 1989, but his legacy continues even today.

 

The 101 year old Matsushita Electric Industrial Co., Ltd., which changed its name to Panasonic Corporation in 2008, is now one of the top electronics companies in the world. 

 

Panasonic now has over 272,000 employees and at the completion of its 100th year (2018,) it reported an annual revenue of $ 72.32 billion.  The Company has been climbing the ladder of success continuously. This was all made possible because of Konosuke Matsushita’s determination to succeed and excellent management skills.

 

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Arianna Huffington Unknown Facts

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Arianna Huffington, the Greek-American author and founder of the Huffington Post, is regarded as one of the most powerful women in the world by Forbes.  With an estimated net worth of 50 million USD, this Cambridge alumni is a Pulitzer award winner and is known for creating one of the most popular news websites.  Keep reading to know some lesser known fact about this celebrated author and businesswoman.

 

Unknown facts about Arianna Huffington

 

1.. Arianna barely spoke any English when she moved to Cambridge University.  To overcome the language barrier, she took to debating and taught herself how to speak English.  Even with constant humiliation from people for her accent, she persevered and was elected to become the president of the debating society.

 

2.In 2007, Arianna got a wake up call about the importance of getting adequate sleep, when she collapsed due to exhaustion.  Calling sleep deprivation the new smoking, the successful business woman tries to sleep 8 hours a day, 95 % of the time.

 

3.At the age of 22, she wrote her first book The Female Woman, which argued against the women liberation movement of the time and advocated for equal rights and equal opportunity for distinctly female roles.

 

4.She was rejected 37 times while looking for a publisher for a book and ran out of money by the 25th rejection.  She took a loan and found a publisher for her book by the 38th attempt.

 

5.Before starting the Huffington Post, her first venture into the online world was Registration.com, which called for the resignation of the then President, Bill Clinton.

 

6.Arianna published a biography about Maria Callas, called Maria Callas: The Woman Behind The Legend.  This book was accused of plagiarism by Gerald Fitzerlad, Callas’ biographer and ended with a court settlement.

 

7.She voiced a character named Arianna in Seth MacFarlane’s animated series, The Cleveland Show

 

8.In an email interview, Huffington shared, India has a special place in her heart as she spent some time studying comparative religion at the Visva Bharati University in the Country.

From not being able to speak English, to creating one of the popular news websites and becoming one of the most powerful women in the world, Arianna Huffington has became an inspiration to all.

 

Comment below and let us know which of these facts about Arianna Huffington interested you the most.

 

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Bill Gates Unknown Facts

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The pioneer of Microsoft and the second richest man in the world, Bill Gates is certainly a name we all grew up hearing.  This man needs no introduction, but did you know these things about him? Keep reading to find out some unknown facts about Bill Gates.

 

Unknown facts about Bill Gates 

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1) The first program written by Bill Gates was in the BASIC programming language, which allowed users to play tic tac toe against the computer.

2) Though Gates dropped out of Harvard University in 1975, he still managed to get a degree.  The University gave him an honorary degree in 2007. Bill Gates also received honorary degrees from Cambridge University, Tsinghua University in China and Waseda University in Japan.

3) It may come as a shock, the man who mastered almost every programming language in the world, can speak only one human language—English.  He often says not learning another language is his biggest regret. 

4) Just like Mark Zuckerberg, Bill Gates is also colour blind.  In an interview in 2006, Gates revealed about his colour blindness to the world. 

5) Despite his busy schedule, Bill Gates is an avid reader and is known to read around 50 books a year, that is, at least 1 book per week. 

6) Bill Gates used to fly coach until he bought his own plane in 1997.  He often refers to his plane as the ‘big splurge.’

7) In 1994, Gates acquired the Codex Leicester, a collection of writings by Leonardo da Vinci, in an auction for $ 30 million.  This was one of his biggest splurges, before he bought the plane.

8) Gates is a sports enthusiast and is often seen playing bridge, golf and tennis in the very little free time he gets.

9)  Bill Gates has three children and though his net worth is more than $ 100 billion, his children will inherit only $ 10 million each.  Gates often says, “Leaving kids massive amounts of money is not a favor to them.”

10) Bill Gates shared a love-hate relationship with fellow tech genius Steve Jobs.  The duo shared a friendly relationship initially, when Microsoft wrote software for the Apple II computer.  However, graphical user interface (GUI) conflicts fractured their relationship. Steve Jobs was often seen taking digs at Gates publicly. 

 

Which of these facts about Bill Gates surprised you the most?  Comment below and let us know. 

 

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