Fantastico viaggio — DBI does Italia!

Have you ever wondered why a Gucci scarf costs so much? Do you know the difference between fashion and luxury? And how much gelato can you consume in a week?

 

These are just a few of the questions that a group of 22 full-time and part-time students answered during their spring break in Milan while on the four-day “Doing Business In (DBI) Italy” program with Stern’s partner school, SDA Bocconi School of Management.

 

In case you’re not aware, DBI Italy is one of Stern’s two specialization-specific DBIs. The other took place for the first time this year in Costa Rica to complement the Social Entrepreneurship specialization.

 

SDA Bocconi makes a perfect partner for Stern’s Luxury Marketing specialization due to its proximity to many of the headquarters of global luxury brands. What’s more, SDA Bocconi offers a Masters in Fashion and Design Business Management, and as a result has developed a wealth of academic research and industry contacts in the luxury marketing space.

 

Our week in Italy was a combination of classroom work, corporate visits and a retail field study, all of which were carried out with a view to learning what it’s actually like to do business in Italy.

 

Here are a few highlights from our trip:

 

Day 1: We started off the week with a day of in-class lectures. In the morning, a partner from Bain’s Global Luxury and Fashion practice discussed the various challenges that Bain is hired to solve for clients, along with introducing us to the “Alta-gamma,” a group of high-end Italian companies whose brands are famous on an international level.  

 

All of the companies in the group successfully interpret the competitive advantage of the “Italian System” in the world: a synthesis of excellent entrepreneurship and the idealistic, cultural, historical and natural heritage of Italy.  

 

In the afternoon, we covered the fashion industry business model through the “Dolce & Gabbana” case. From the challenges of the designer-centric nature of the fashion business to the management of licensing a brand to create capital, we learned just how tough it is to build a global fashion house.

 

Day 2: Today was the first of our two corporate visits. We headed to the beautiful lakeside town of Como to learn about the process of designing and printing silk at the Montero Silk factory.

 

Like many businesses in Italy, the Montero Silk factory has been family-run for generations, in this case four. The group agreed that seeing the screening process, which could include some 35 colors per scarf, gave new value to their average $400 price tag!  

 

After a late lunch, the latter part of the day was spent doing field research for the course’s main project. This involved each study group going out in Milan to “shop” at multiple locations where global brands — such as Gucci, Prada, Louis Vuitton, and Armani — are sold. (This assignment naturally resulted in a lot “active” studying on the part of several participants!)

 

While shopping we noted the differences between store formats (department store, multi-brand boutique, flagship), customer service experiences, product merchandising, store ambiances and locational factors.  

 

Later that evening we enjoyed the Milanese tradition of “Apertivo,” also known as the best all-you-can-eat buffet you’ll ever see.

 

Day 3: The day started with a fascinating lecture on businesses selling “hard luxury goods,” including watches, jewelry and yachts. Perhaps the most fascinating aspect of these businesses is the focus on craftsmanship — something that was clear when we learned about creation of a Patek Philipe watch.

 

The rest of the morning was spent at the Versace corporate headquarters, a building that Gianni Versace once called home, listening to the former head of communications for Prada speak about his role in repositioning Versace in the marketplace after ten years of tumultuous strategy following Versace’s death. The rest of the afternoon was spent finalizing and synthesizing our observations from the retail survey for final presentations.

 

Day 4: Final presentations took up the morning hours and it was evident from the variations in findings that the luxury brands we visited still have a lot to learn about creating a global retail experience. Our coursework ended with a discussion on branding and positioning in the luxury space through the lens of Ferrari, perhaps one of Italy’s most recognizable brands.

 

Our evening was reserved for a final dinner at a stunning historical building that has been preserved by one of the fashion world’s most successful PR/Strategy firms, Attilla. At dinner, Atilla’s president spoke to us about her experience doing PR for some of the largest names in the fashion industry, and where she sees the industry going.

 

We ended our week with a fantastic Italian meal by candlelight with our Bocconi hosts — a luxurious end to a fabulous week!

 

The week in Italy flew by, but we all agreed that we learned a ton from our experiences. Oh, and for the record, I believe the gelato consumption per head on this trip came in around three. Ciao!