the business of luxury

so as many of you know, i’m applying for business school right now.  post-mba, i’d like to do brand management/marketing or strategy for a luxury goods company like lvmh, ppr, or coach.  of course this can all change once i start taking classes and recruiting.  i’m pretty sure that’s what i’d like to do functionally, but i’m also interested in hospitality, entertainment/media, and management consulting.

there isn’t much information out there for this career path since it’s pretty new to mba recruitment so i hope my post will be helpful for others.

ok, first of all…what programs should you consider?  european or american?  this issue’s pretty debatable and i’m not even sure if i made the right choice myself.  most luxury goods companies are headquartered in europe so it makes sense to think of european programs.  and unlike most american programs, there are plenty of schools that offer some sort of luxury specialization.  while american schools tend to be more prestigious and more highly ranked, you have to think of what will be best for your career…especially when you’re not going into traditional mba industries.  i personally chose to apply to american programs but if i hadn’t missed the january intake deadline, i would’ve also applied to insead.  i also thought about london business school.

top european schools with luxury programs (in no particular order):

  • sda bocconi – luxury business management track (partnered with bulgari)
  • hec paris – luxury strategies certificate (sponsored by ppr)
  • essec – international luxury brand management (lvmh chair)

these programs are pretty tempting since they have sponsorships/partnerships with some big names.  and while lbs and insead don’t have luxury specializations, you should also consider them because they are among the top mba programs in the world and especially in europe.  there are also programs with similar specializations from less prestigious schools.

if you’re looking at programs in the us (in no particular order):

  • harvard business school
  • stanford graduate school of business
  • upenn wharton
  • columbia gsb
  • nyu stern – luxury marketing

as you can see, stern’s the only top us school with a dedicated luxury specialization.  most of these other programs are on the list because companies looking for top talent will look at these prestigious schools and columbia/stern have the nyc accessibility and they have strong clubs in the area.  even the ny post has acknowledged hbs’ role in the fashion world.

i didn’t apply to any european programs because i didn’t want to pigeonhole myself; right now i’m pursuing luxury goods but what if i change my mind at school?  i didn’t want to be stuck.  this isn’t really a problem with lbs and insead because they’re some of the world’s best, but the other schools–even though they’re among europe’s top–they’re not the same level as the american programs.  i also want to work in the us so it makes sense for me to apply to an american program.  i really liked insead’s program but it’s a one-year program, which i feel is too short but i would’ve applied anyways if i hadn’t missed the deadline.

now, why am i choosing luxury goods amid an economic recession?  i think it’s something i’d really enjoy while supporting a comfortable lifestyle.  i’ve always liked fashion and i kind of work in the luxury industry already.  and to echo the same reasoning from this businessweek article: “the ultra-wealthy will always buy luxury goods, regardless of the fluctuations in the economy.”  actually, a lot of the major players have been doing extremely well during these tough times…mostly spurred on by growth in asia/china.  and to quote an ie professor who teaches on the subject, “in addition, new business opportunities are arising as a result of 3 important changes–the grown of chinese consumption, the development of technology, and changes in sonsumers’ values.  people are always attracted to industries that are growing.”

i realize it’ll be tough since these companies don’t really recruit on campus; i’ll have to do a lot of my own networking and job hunting outside of what the career resources my school can offer.  it may be especially difficult to start post-mba, so alternative tracks can be to do management consulting or working at a more mba-friendly company (l’oreal, p&g, nike, amazon, target) and transitioning later at a more senior level.

another harsh reality check is that the glamorous life doesn’t equal money.  retail is among the lowest paid careers for an mba (with banking/pe and management consulting at the top).  and because these are such sexy, popular companies, they don’t have to pay a lot…people will work there anyways–and they know this.  listen to essec’s academic director’s advice: “he’s also encouraging them to broaden their searches beyond luxury brands such as hermes and chanel and use their skills to land jobs at more mainstream companies with strong brand identities.  ‘you will have more power in a normal brand and maybe these people are willing to pay you a little more.  there are a million mbas lining up to work at vuitton lvmhor chanel, but if you think about going to the pumas or nikes of the world, then the sky’s the limit.'”

also be aware that luxury companies are asking for special profiles that they can’t even find in top business schools: “luxury goods require special managerial competences because they aren’t chosen for their functionality, but for their symbolic value.  […]  it’s important to understand the different competitive rules of the various luxury business […] and to decide whether you need to use general or specialist managerial tools.  plus you need to be international, open-minded, flexible, and a team-worker.  […]  this sector…needs people that are able to manage teams that integrate these two very difference profiles, the analytical and the creative one.”  if you take a look at the candidates lvmh is looking for in their futura initative, you can see this is true.  this sentiment is further cemented by the university of monaco’s associate dean, “there’s something a little magic about a luxury brand.  you have to be initiated and understand how it works.  it’s a lot more specialized and complex than it looks.

this discussion thread on find mba may also prove helpful.

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the china comic & animation museum (ccam)

i saw renderings of and was pretty excited for the china comic and animation museum (ccam) but i didn’t realize that china is hoping to overtake the u.s.  in animation.  whoa whoa, china…a little ambitious trying to transform hangzhou into the animation capital of the world.

the best animation studios and histories are from the u.s., but even still, let’s not forget japan and korea.  a lot of animation is currently outsourced but none of these studios are getting acclaim for the work they’re producing, because well…it’s not really theirs to own.  if they want to be true animation masters, that means more than the technical animation–it means they have to be master storytellers, because that’s the real key (i.e. pixar, disney in the “golden age”).  most entertainment globally is still coming from hollywood/the u.s., i’m not sure how china plans on breaking this–even bollywood hasn’t done it and it’s been doing it for a lot longer.

but in any case, the museum designed by mvrdv still looks amazing and i hope to visit some day…especially since i’ve never really been to china.

mvrdv designed the buildings to look like 3d speech/thought bubbles…cute right?

for more information on the museum and how spending $130 million may not be the best way to stimulate china’s economy, read fast company design‘s piece on the subject.

rajat gupta vs. haruka nishimatsu

another day, another white collar criminal charge.

so there’s been much criticism the past few years on the role of greed and lack of ethics in business in causing the financial crisis.  and today, yet another distinguished harvard business school alumnus has cast scrutiny on the mba world.  rajat gupta, one of hbs’ most distinguished alumni and a major adviser to 5 top business schools, was charged with insider trading by the securities & exchange commission.  the former director of goldman sachs and procter & gamble is accused of leaking information to a friend who illegally gained $18 million.

gupta has an impressive resume and is considered to be one of the most successful indian-born businessmen of his generation.  at only the age of 45, he became the first non-westerner to hold a top leadership position at consulting powerhouse mckinsey & co.–managing director.  not only has he been instrumental in the founding of the indian school of business, he has served on advisory boards for harvard, northwestern’s kellogg school of management, mit’s sloan school, and university of pennsylvania wharton’s lauder institute of management & international studies.

this news comes less than a month after another hbs alum, samir barai, was charged with insider trading.

but there are also business leaders who have ethics and morality.  there’s haruka nishimatsu, ceo of japan airlines.  when jal hit hard times in 2009 and laid off its staff and was forced to cut pay, he also cut his own.  not only did he eliminate his perks, but the ceo of the 10th largest airline in the world isn’t making millions.  in fact, as low as $90,000–less than some of his pilots.

“if management is distant, up in the clouds, people just wait for orders,” nishimatsu told cbs news through a translator. “I want my people to think for themselves.”  nishimatsu says a ceo doesn’t motivate by how many millions he makes, but by convincing employees you’re all together in the same boat.

some other examples of good management executed by nishimatsu:

  • knocked down his office walls so anyone can walk in
  • buys his suits from a discount store (because a boss who wears an armani suit puts himself at arms’ length from his people)
  • dines in the company cafeteria for lunch
  • takes the city bus to work

jal filed for bankruptcy january 2009.

how apple broke the pr rules–and got away with it

i saw an interesting post today from the harvard business review called “how apple broke the pr rules–and got away it” by joshua gans.  he basically discusses how apple broke 5 “key” pr rules after the fiasco of the iphone 4 release.  when it was released, apple was faced with a crisis over dropped signal strength if the device was held a certain way.  by breaking these crisis communication rules, apple actually benefited and saved its brand and reputation.

i won’t post the entire article, if you’re interested in learning more, just check it out at hbr. but i will list the 5 rules broken by apple:

  1. apologize & take full responsibility
  2. don’t create expectations with a media event
  3. announce the giveaway first
  4. avoid specific comparisons with competitors
  5. don’t air your industry’s dark secrets

reading this made me wonder how toyota would have fared if it had responded the way apple did after the recalls.