As indicated earlier, business models are brand-specific because every luxury brand has features that make it unique and different from others. This means that the process of developing a business model for luxury brands and companies in other sectors ought to be flexible in order to accommodate company-specific features and market changes. As a result, the process of crafting a business strategy model for the luxury industry shown in this chapter is not a strict and inflexible magical tool but is aimed at providing a general direction. The identified features in the business model presented are aspects of the luxury goods industry that affect the majority of luxury brands to varying degrees. The business modelling exercise can be applied by both old and new luxury brands.
The recommended procedure for business modelling is as follows:
Evaluate and understand the current situation of the brand and the company.
Identify and define existing and/or potential problems the company is facing or could face. This is summed up as the Strategic Challenge. Formulate a set of alternative business strategies that could solve the strategic challenge and analyse them. This will lead to the recognition of one of the strategies as a viable alternative.
Create a Plan for the implementation of the recommended strategy(ies). This involves checking internal competences and resources. Identify performance measurement indicators to check the progress of the implemented business strategies.
Each of the six identified steps will now be tackled. A unique graphical shape will represent each step.
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