Thursday, September 10, 2015

Ch. 2 - Strategic Planning for Competitive Advantage

Gildo Zegna


An important aspect of a successful company is understanding the brand inside and out. It is important to know what you are capable of delivering and what your customers expect from you. The Ermenegildo Zegna Company has been in the family for over 100 years and is still owned and operated by them. This makes Zegna special and different from the rest of the corporate-owned men’s tailored suiting companies out there. Important company decisions are not made by a corporate big shot whose only interest is to make money. Instead, Zegna’s CEO Gildo Zegna, and Chairman Paolo Zegna, understand what is in the best interest for the company and keep an intimate relationship with the brand. This gives them a competitive advantage over companies like Berluti, Loro Piana, Donna Karan, Dior and many others. 



Ermenegildo Zegna has suits and products for all kinds of men. They have business attire, which is the formal business suit you see on wall street. They design Tuxedos for black tie events. And they also have their newly famed contemporary line called Z Zegna. Z Zegna is targeted towards a younger market such as myself. The suits are cut much slimmer and more form fitting. It is also a lot more affordable then the cheapest Zegna suit you can find such as the Torino or Milano (These are alternate cuts of suits Zegna offers. Some are slimmer, some are bulkier.) 



SWOT Analysis:

Internal Strengths: As I have stated above, a huge strength and advantage is family ownership. They understand the true meaning and goal of their brand because it is physically theirs. They can make any decision they want, good or bad (Almost always good). As you walk through their stores, you can feel the passion gravitate down from the designer to you. There is love and intimacy in every garment they create. Another huge strength for Zegna is their fabric. Zegna started as a strict wool manufacturer in the early 20th century. They understand fabric more than any other brand in the market. As a matter of fact, they are so well known for the fabric that companies such as Tom Ford, Gucci, and Yves Saint Laurant use their fabric for men’s suits. And on top of their use of Zegna fabric, their suits are manufactured by Zegna factories. This is what makes Zegna the most powerful and largest Menswear brand in the world. They can see what their competition is designing before it even hits the runway because they practically control their competition.

Weaknesses: Having complete family ownership is indeed a strength, but it can also be a weakness. If somehow they fall into a large sum of debt and begin to lose necessary assets, there is no one there to bail them out. Brands that are owned by corporations can almost guarantee that is something goes wrong, it is not the end of the company. These corporations have partial ownership in them so they can always be there to help. Unfortunately, Zegna does not have that ability.

External Opportunities: Zegna’s distribution of fabrics opens up opportunities for large and small companies to buy supplies from them. When a small boutique uses Zegna fabric, there is a Zegna label on the inside. In a way they are getting paid to advertise their name and draw more customers to their own tailored suits.

Threats: Zegna, although the largest Menswear company in the world, is not ranked as having the best tailored suits. Their focus is equally split between the design and manufacturing of their in house suits, and fabric distribution and external manufacturing for other brands. I believe this is why other brands cause a threat when it comes to the best tailored suits. The Ermenegildo Zegna name is not a well known as names such as Armani or Hugo Boss. This does not mean these brands are superior. I still believe Zegna produces top of the line suits. They are just not a “label brand”. People buy Zegna suits for the quality, not the name. But trust me, Zegna compared to any other company is a no brainier. Ermenegildo Zegna wins it all.






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