Supply Chain Management strategies in the luxury industry
Cecilia Castelli Politecnico di Milano cecilia.castelli@polimi.it

Cecilia Castelli

1 Introduction The industry of luxury goods is expected to become in 2006 a $170 billion business worldwide (Egon Zhender International, April 2006), and in the recent years sales were growing 6% per year (Kwak and Yoffie, 2001). Despite the adverse economic cycle, luxury goods firms experience increasing demand: this is due in part to the increasing social relevance of owning luxury goods, in part to the strong commitment of the luxury companies in branding and communication (Castaldo and Boni, 1999). But does the success of such companies lay in communication activities only? It would be interesting to understand if – and to what extent- the choices of the appropriate operations and supply chain strategy influence the success in the luxury niche. The topic of Supply Chain Management, due to the major economic trends of the last decade (globalization of markets, outsourcing of activities, demand for growing number of innovative and customized products in small volumes, with high quality and high service level, in an unpredictable way), emerged as a promising research field and was largely studied; however the models that have been proposed don’t seem to describe properly the strategies to adopt in the luxury goods industry. A specific research project is ongoing at Politecnico di Milano, aiming at studying Supply Chain strategies in terms of goals (critical success factors - CSF), key performance indicators (KPI), intraand inter-firm practices, and risk and benefit sharing mechanisms that are actually adopted in the field, on the base of large empirical studies in the luxury goods segment and at developing a Supply Chain strategy model that can be specific for this particular industrial niche. 2 Research background 2.1