Presentation on theme: "The economic value of creativity The business model of the italian fashion clusters Hermes lab srl"— Presentation transcript:
The economic value of creativity The business model of the italian fashion clusters Hermes lab srl http://www.hermeslab.it E-mail: Segreteria@hermeslab.com Marco Ricchetti, CEO, Hermes lab, Italy Bangkok, december 29, 2003
The economic value of creativity: outline of the presentation Brief summary of the Italian fashion industry The Fashion business Fashion clusters, advantages and new challenges
The italian fashion industry in figures Turnover (mln Euro s ) Share in World exports (%) Employment Trade balance (mln Euro s ) Textiles, clothing, leather goods, footwear 2002 2003 (fcst) 71,097 925, 000 +19,146 9.8% 70,031 +16,781
Fashion industry vs. TC industry (1) fashion industry What we mean when we use the term fashion industry change Fashion is, by definition, change. ethereal spirit of the time Success in fashion comes with the ability to grasp and recreate in clothes and accessories the ethereal spirit of the time and voluble desires of customers. design dimension new products Fashion adds an important design dimension to textiles or leather artifacts, which is capable of providing a continual and varied flow of new products
Fashion industry vs. TC industry (2) The factories manufacture clothes, but consumers buy emotions, hope and dreams
Fashion vs Luxury (1) can A fashionable good can be a luxury good, not necessarily but not necessarily is so. Very often it is not ! APPAREL MARKET BY PRICE-SEGMENT MODERATE BUDGET LUXURY BRIDGE+BETTER The high-end luxury market, accounts for a very small share of the market
Fashion vs Luxury (2) Italy holds a strong position in luxury (designers), bridge and better segments And, most of all, where fashion and variety matter.
Fashion and Risk Variety Variety and predictability the low predictability of factors that make a new product best sellerworst-seller a best seller or a worst-seller risk far greater generates a risk far greater in fashion than in other industries Medium to high high very high RISK Increasing uncertainty and risk
The fashion pipeline BUREAU DE STYLE FIBERS MANUFACTURERS FASHION TREND FORECASTS YARNMAKERS RETAILERSGARMENTMAKERS FABRICMAKERS CONSUMERS DESIGNERSSPECIALIZEDPRESS ADVERTISING CULTURAL INDUSTRY OPINION MAKERS PROTOTYPES PROTOTYPES, SAMPLES, TRADE FAIRS RUNAWAY SHOWS SALES POINTS PROTOTYPES, SAMPLES, TRADE FAIRS FLOWS INFORMATIONGOODS PROTOTYPES, SAMPLES, TRADE FAIRS A reduction of risk can be acheived trough a complex interaction of goods and information flows. Key competences are: Strong ralationships along the pipeline Combined with flexibility Mastering of innovation routines
The advantage of clusters Strong ties Within a cluster the whole pipeline is often reproduced, sometimes it extends to the manufacturers of specialized machinery. The close relationship between users and providers of machinery and intermediates is decisive in the introduction of new products, and new processes.
The advantage of clusters Know-How The concentration of professional skills applied to all phases of the pipeline is powerful and marked by a great variety of operators. Knowledge and information circulate easier inside than outside the cluster.
The advantage of clusters Innovation machine Merging of advanced technical and organizational solutions with the craft traditions build a remarkable platform for creativity and innovation (rapid development of prototypes, short run series, great array of variants).
The advantage of clusters Entrepeneurial competence The small to medium size of the companies does not prevent the world to be considered by entrepeneurs as their reference market. Company structures are lean and flexible. Family ownership is very common, providing quick decision making, long-term planning and commitment.
A critical weakness of clusters Industrial cluster heavily focus on manufacturing know-how while in fashion industry specialized services (design, communication, cultural industry etc….) Are of crucial importance Actually, main fashion clusters developed around two urban centres that played the role of services providers: MILANO and FIRENZE
A map of italian fashion clusters Most of fashion clusters in Northern Italy Are within a radius o 200Km around Milano Most of fashion clusters in Central Italy Are within a radius o 150Km around Firenze
Challenges for the future The fashion business in the 80 In the past, fashion clusters built their succes focusing on manufacturing buying on the market the necessary specialized services (including retailing). Communication Retailing Design Manufacturing Culture Society Consumption The core competence of fashion clusters
Challenges for the future Design Manufacturing Communication Retailing Multi-competencecompany Culture Society Consumption The fashion business in the new decade Will the cluster companies be able to expand their core competence ? Competition in fashion goods urges companies to approach the market in an integrated way. Manufacturing Know- How becomes less important. Brand image, communication, control of distribution channels are the challenges for success.
End of presentation Hermes lab srl http:// www.hermeslab.it E-mail: Segreteria@hermeslab.com Bangkok, december 29, 2003 Marco Ricchetti, CEO, Hermes lab, Italy