Case Study “hugo Boss” Questions & Answers

Case Study “Hugo Boss” Questions & Answers

1. Describe the situation of Hugo Boss in 2008 along the five Cs.

1. Customers: What is the company selling, what are the customer needs?

• Premium fashion products like casual & business fashion apparel, accessories, and fragrances
• Confidence

Customer Needs

Good products: Quality, design

Up to date products w.r.t recent trends in fashion industry or even trend setting products

Nice shopping experience (appealing shops, prime locations)

High Brand recognition

1. Company : Which strategic assets and core competencies help the company in satisfying customer needs?

1. Research & Development Centre and  Design Specialists

In fashion, the quality of new clothing is one of the key success factors. For developing new products, Hugo Boss has three development centers  one each in Germany, Italy & Switzerland.

It serves the customer’s need of trendy or trend setting products.

1. Reliable production structure

Production Centers :Hugo Boss has mass production site in Izmir (Turkey), Radom (Poland), Cleveland (USA), Morrovalle (Italy) and Metzingen (Germany)

Global purchasing network of over 1,000 suppliers.

Reliable production structure serves the customer’s need of product quality.

1. Well integrated Modern Logistic System

Well integrated Modern Logistic System serves the customer’s need of product quality and timely availability of latest design in the stores.

1. Well known premium international brand

Serving customer need of Recognition.

1. 6100 points of sale in 110 countries

Customer experience : Good or Bad

1. Strong & diversified brand profile

Serving customers specific needs

1. Competition: Who competes with the company in fulfilling the same customer needs?

Main Competitor in Casual and downscale market

Ralph Lauren

Tommy Hilfiger

Zara

Main Competitor in Premium & Luxury segment

Full range competitors

Burberry

Armani

Prada

Max Mara

Accessories focused competitors

Michael Kors

Hermes

1.    Collaborators

1. Suppliers: Close long term partnership; partnership often also encompass delivery of machines, joint development of manufacturing techniques and employee training.
2. Strong reliance on wholesalers for distribution: Wholesalers buy directly from BOSS and then either sell to independent retail stores (B2B) or through their own retail operations (B2C).

Integrated wholesalers have grown in relative importance as the industry consolidates and independents go out of business.

1. Franchise Owner (Asia) : They were not able to translate HUGO BOSS brand image or feel. Their stores were poorly managed, locations of the store often poorly chosen and  poor customer handling.

1.    Context: Which larger trends might affect the company?

   General Business Environment: Looming 2008 financial crisis is putting the industry in a precarious situation.

  - Customer tighten spending

 - Exposes deeper problem in retail structure : Further strengthen the bargaining power of wholesalers, thereby squeezing margins and reinforcing the trend toward special product requests, further diluting the BOSS brands.