Relationship between Stakeholders and Impact of External Environment on Luxury Brands

The relationship between
stakeholders and the impact of the
external environment on luxury
brands
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ABSTRACT
Stakeholders are the most significant player within the organization who can affect
company in positive or in negative manner. Stakeholder are the parties who have invested in the
company and these parties can affect the company or get affected by a company in any way. So
the present study is been based on topic of stakeholder and its relationship for luxury brands and
also the study looked at the consequences could brands can faced. Study has been conducted in
building and maintaining stakeholder relationship on luxury brands. In order to conduct the study
researcher has been explained and used different research methodologies for the research. Along
with that, researcher has been conducted secondary research in order to measure the research
outcomes and effectively meet out the research aims. Research has been defined about external
environment factors and their significance on business functions. Research tries to explained that
in present market situation luxury brands are facing challenges in the market due to economic or
external factors. In order to clarify this statement, research also conducted interview with 10
managers.
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Table of Contents
INTRODUCTION...........................................................................................................................4
LITERATURE REVIEW................................................................................................................6
Theme 1 Relation between external factor and luxury brands....................................................6
Theme 2: Challenges faced by managers in building and maintaining stakeholders relationship
on Gucci.......................................................................................................................................9
Theme 3: To examine the concept of relationship management with stakeholders..................10
Theme 4: To advice Gucci for water usage and fabrics to effectively deal with external factors
...................................................................................................................................................12
RESEARCH METHODOLOGY..................................................................................................13
RESULTS/FINDING....................................................................................................................17
ANALYSIS OF RESULTS...........................................................................................................29
CONCLUSION AND RECOMMENDATION............................................................................31
REFERENCES..............................................................................................................................35
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INTRODUCTION
Stakeholder relationship is defined as practice of forging mutually beneficial connection
with third party group and individual in common interest. Thus, stakeholder to the enterprise
defined as individuals, group and entities that are affected by the operational working of the
enterprise. Thus, external components has significant impact on perception and wants of
customers. It impacts the working of the enterprise in crucial manner. However, the customer
preferences, technical advancement and influence of legal authorities has wide impact on
enterprise (Sinha and Sheth, 2018). Henceforth, fair treatment and strong relationships with
core stakeholder is one of the key to enhance profitability and to achieve business success. It can
be termed out as structured approach that assists to identifying internal audit key stakeholder and
to implement the plan that carry out the business activities in effective and efficient manner.
Henceforth, stakeholder management system is defined as tailored software system that builds
stakeholder engagement within the enterprise. Additionally, this can be stated that the early
relationship characterized by trust, mutual understanding and corporation. Positive attitude
within the stakeholder group aids to have great impact in this modern fast changing business
environment. Effective communication is one of the key components that helps to build the good
understanding and trust between the stakeholder of the enterprise.
The present report is based on the business activities of Gucci, this is Italian luxury brand
of fashion and leather goods. This entity has 278 directly operated stores at the worldwide level.
This also wholesale its product with help of undertaking facilities as franchisees and upscale
department stores (Schaltegger and Burritt, 2017).
Henceforth, the report will outline the aims and objectives on the basis of given topic.
Additionally, research methodologies will be selected to adopt the proper method to conduct the
reliable study. Henceforth, the study will also gathered the analysis in order to determine the
stakeholder relationship management for luxury brand. Lastly, recommendation will be given so
that can aids to improve the stakeholder relationship management. Relationship with company
stakeholders are the most essential process to create a competitive advantage by being the best at
understanding, communicating delivering existing customer relationship. Customer relationship
management is better helpful to understand and keeping new customer approach also it will be
more energetic which influence the best sources and data of the company in more energetic way.
These relationship and good environment will help to cover the energetic system in the company
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and give positive outcomes to the study. Present study will summarize the importance of
stakeholder relationship management for luxury brand and identify impact of external
environment. Intermediaries like distributors wholesalers and retailers along with the high
preferable sources. However the business goals will surely make the best source and outcome
goals. The systematic oriented practices will surely make the best out goals which makes the
things more clearly upholding and goal oriented results. More information communication and
production technologies have helped marketers come loser to their customers. Firms operating in
diverse sectors ranging from packaged goods. Study will also significantly define the highest
business goals with the best effective targets. Lack of fast effective and interactive models of
customer contact, feedback and information. To maintained the good relation. Also it is required
to maintained the competitive market with high effective outcomes. Another important which is
required by the company to taking care of is growing importance of the service sector. The
service sector contributes to over two third of the GDP of most advanced economies. This
business task will definitely move the best outcomes to be the most effective out goals and
results.
Aim and objective
Aim – To analyse importance of stakeholders relationship management for luxury brand and
identify impact of external environment. A case study on Gucci.
Objectives
 To examine concept of relationship management with stakeholders
 To identify challenges faced by managers in building and managing stakeholder
relationship on Gucci.
 To analyse various external environment factors and their significance in business
 To determine relationship between external factors and luxury brand
 To advice Gucci for water usage and fabrics to effectively deal with external factors
 To recommend strategies to develop relationship with stakeholders
Research questions
 What are external factors and their significance in business?
 What is the relationship between external factors and luxury brand?
 What are ways that Gucci can use for water usage and fabrics to effectively deal with
external factors?
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Research hypothesis
 There is significant relationship between stakeholder and external factors
 There is significant relationship between brand image and competitive advantage
 Stakeholder strategies benefit organization to reduce negative impact
LITERATURE REVIEW
Theme 1 Relation between external factor and luxury brands
Gucci is one of the top brand of clothing shoes and accessories. Pestle analysis is the
external factor of Gucci .
Political factors:
According to Banerjee, 2017, political factor affect the Gucci , political factor major
impact on Gucci, government rules and regulation and policy directly affect the Gucci brand
sales and purchase political factor is one of the important factor of every organisation .political
factor means government interfere on the organisational. Government make the rules and
regulation for the product like tax fixing , import export rules etc. which affect the Gucci sales
and purchase and marketing. Gucci also face the negative effect because of laws related to export
import and increasing cost. political impact also beneficial for Gucci sales by introducing new
strategy and the government support.
Economical factor:
As said by (Kazadi, Lievens and Mahr, 2016 economical factor is one of the major part
of external factor . Economical factor affect the Gucci sales and productivity. Gucci face lots of
challenges in the market due to economic factor . Like skimmed price every customer wants
high security and insurance before purchase. Gucci also contribute in the global economic.
Gucci changed the living standard of the people .it will also increase the gross domestic
product .Gucci contributed a good and positive effect on the economic growth. Gucci will
provide the product to the customer at lower price . Gucci help in economical growth of the
country.
Social factors
Luxton, Reid and Mavondo, 2015, said that Gucci will provide the best quality and the
best luxury products on the demand of the customers. Like Gucci will provide best quality
product like fur coat and leather bags etc.
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Gucci will use best raw material for the productivity. Gucci made a positive impact on the
lifestyle of people.
Technological factors:
Kano and Verbeke, 2018, stated that technology is one of the most important part of the
Gucci . Technological factor provide the many type of technical strategy. Technology is
important for the improvement of the product .technology provide help in productivity. Gucci is
advertised for the advancement of technology. Many people are aware of the brands.
Technological factor provide many type of marketing technique it will helpful in increasing sells
and production and advertising etc.
legal factors:
legal factor Is one of the important part of external factor . Legal factor means laws and
rules and regulation made by government for the brands .legal factor also related to the licensing
of the brands of the product legal factor. Legal factor also consider the accuracy of the product.
product quality is also a legal factor .
Environmental factors:
As elucidated by Åsberg and Uggla, 2019, environmental factor is a also important
part of external factor . And pestle analysis. Gucci is the high class brand Gucci manufacture
crocodile bags and fur coat .Environment affect the manufacture of the some product .like
climate make some product useless. Example in case of textile , in countries where the winter
clothes much less of a market. Is Gucci should produce extremely large amount of waste. So this
will be affect on the environment. This is not fare and fare by the low. So Gucci will control
and manage their environmental habits. Because of pollution fines and quotas, which may place
financial strain on Gucci. As per the Wang and Foosiri, (2018) relationship between external
factors and luxury brands are quite very complex. Sometimes due to heavy competition and
substitute products the ratio of luxury brands will reduce. There are some characteristics of
luxury brands like Branded products having unique identity and feature which itself they attract
the attention of buyers. On the same side, luxury brands also maintaining the quality of products
which never done by the local brands. This is the only reason why people more prefer to have
branded products rather than having local products just because of quality issues. Pursuit of
defined quality is the motivation factor which can be preferred by the company out goals.
Consumers seek perfect willing to perceive more value from a luxury brand. All such factors
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might have give negative or positive impact on the relationship between stakeholder and
elements. Along with that, it will helps to makes the highest welfare activities and promote the
best service platform to be the most competitive firm in the following areas. According to Chae
and Ko, (2016) the major factor which influence one's purchasing habits and consumer
behaviour is the social class in which one finds him or herself. A Major influence one purchasing
habits and consumer behaviour is the social class which can be influenced the services of the
things. Apart from this, Social class is considered an external influence on consumer behaviour
because it is not a function of feeling or knowledge.
There are some more factors that might have been affect the luxury brands like
technological forces which keeps on pressurising the brands to develop something new and
innovative. Technological factors affecting clothing industry including availability of resources,
demand and production. For example, the scarcity of certain materials, such as leather may force
retail and wholesaler clothing companies to sell more quality products. So accordingly this is the
mandatory for luxury brands to cope up and maintained the high competition with the
competitors. In order to critique this according to Choi and Kim, (2016) political and legal
factors can also impact the relationship of luxury brands and customers. The industry has
repeatedly been affected by issues such as workers rights and child lobar laws. Union workers in
clothing industry may pickets their employee, especially if their wages or medical benefits are
less favourable than workers. Such factors affect the luxury brands and its policy making
process. The negative publicity might impact the sales and profit of the brand. So such
uncertainties has always involved in the whole process during the managing. Because some of
the things are clearly reduced the chances of development.
According to Soh, Rezaei and Gu, (2017) Economic factor is the another external factor
which might have impact the luxury brands like Gucci in certain ways. Economic is related to
the fact which makes unclear and unmanageable things which clearly not understandable.
Consequently, retailers may be stuck with large amounts of inventory. And they may have to sell
the clothing at substantially reduced prices. Due to high recession can affect the business goals
and makes the things unclear and motivating business task. Inflation may rise the product prices
and on the same side such situations also fails customer to purchase high costed prices from the
market. Apart from this, consequently retailers may be stuck with large amounts of inventory and
also have to sell the clothing at substantially reduced prices. Clothing manufactures and retailers
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