Recently, I attended a conference in New York in which the former CEO of Armani came to talk about luxury brand management and marketing. This led me to the Forbes Magazine article: “Inside Hermes: Luxury’s Secret Empire”.

In this Article, the soon to be CEO of Hermes, Axel Dumas, was introduced. Forbes also talked about the interesting business model Hermes has, and some potential qualities that have driven Hermes to success.

One point in the article I found interesting was that Hermes was officially independent of LVMH (Moet Hennessy Louis Vuitton), the largest luxury empire in the world. In the past, LVMH has been buying shares off of Hermes in the attempt to acquire the brand. This led to a public “war” of Hermes trying to stay independent, while LVMH trying to bring in the brand into its empire. As a result, LVMH has decided not to take over the company. As Hermes is the fastest growing luxury brand in the market, successfully staying independent reiterates Hermes’ growing power.

Another point I found extremely interesting was that Hermes has no marketing department. As a person who is interested in working in the marketing department of a luxury brand, this was very surprising to learn. Forbes put Axel Dumas not just as the CEO, but the Head of Marketing. It stated that the whole company was one big marketing department. This further taught me that when you’re trying to sell luxury goods, or any good that seeks to satisfy a customer’s need rather than a want, marketing is all the more important.

The original article can be seen here.

Late July this year, McDonald’s Shanghai meat plant was found distributing expired meat to chain stores all over China. There were accusations that such distribution was done on purpose, all to maximize profits. To solve this problem, McDonald’s stated that it would implement surveillance cameras in the meat production plants, while replacing many of its suppliers in China.

I chose this issue because I lived in Beijing, China when this happened. I witnessed how McDonald’s dealt with its ethics crisis. For more than two weeks, McDonald’s only offered hash browns, fries, and soft drinks. Witnessing this made me think about the impacts of unethical operations.

First, stopping the sales of important items on the chain’s menu must have severely damaged revenue. Considering long term effects as well, McDonald’s is going to face severe consequences because its brand loyalty will drop, and will lead to increased competition.

On top of this, the Chinese market prefers KFC over McDonald’s, so this incident will make it even harder for McDonald’s to gain market share. Personally, I wouldn’t want to have McDonald’s back in Beijing ever again. Brand image is critical, especially in such highly competitive industry!

http://www.marketwatch.com/story/mcdonalds-overhauls-food-safety-strategy-in-china-2014-09-02?siteid=rss