Date of Award

2012

Degree Name

Business Administration

College

College of Business

Type of Degree

M.B.A.

Document Type

Capstone

First Advisor

Elizabeth Reusch

Abstract

Hermes International Company is the second strongest brand in luxury industry. They have spent more than 100 years to make Hermes name as famous as today. With 3,000 million euro in average revenue, Hermes has a very strong financial position and potential growth compare to other competitors. Their products are always well-designed, high quality, and fashionable. They do not make good products but extremely good ones. Hermes’ target customers are wealthy people who have high level of income and are interested in luxury items. With more than 300 stores all over the world, Hermes is working on their ways to expand their distribution network and make their products available more in different markets.

Besides the threats of strong competitors such as Gucci or Louis Vuitton, Hermes International has to deal with replica products which are selling with a huge amount in black market. These duplicate products have negative effect to Hermes not only in sales revenue but also in brand image. For now, all luxury brands are still looking for the solution for this problem.

With a great system of management, Hermes has achieved a lot of success. Patrick Thomas’s leadership helped Hermes expand a lot in Asian countries and will expand more in the near future. He also decided to have their own crocodile farm which reduces cost of raw materials and threat from suppliers. Due to using massive amount of crocodile’s skin, Hermes also has unsolved problem with animal protection organizations. This unethical production will also harm to Hermes’s image and create negative reaction from some parts of consumers.

Subject(s)

Marketing.

Industrial management.

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