The company was started in 1913 by Mario Prada and his brother Martino as a leathergoods shop - Fratelli Prada (English: Prada Brothers) - in Milan, Italy.[1][2] Initially, the shop sold leather goods and imported English steamer trunks and handbags. Mario Prada did not believe that women should have a role in business, and so he prevented female family members from entering into his company. Ironically, Mario's son harbored no interest in the business, so it was his daughter Luisa Prada who took the helm of Prada as his successor, and ran it for almost twenty years. Her own daughter, Miuccia Prada, joined the company in 1970, eventually taking over for her mother in 1978.

1. Karin Maandi
Mihkel Külaots
Stella Pinsel
2012

2. AGENDA
 Establishment
 Early years (1913-1989)
 Beginning of Prada-Bertelli reign (1978-1989)
 The Golden Age (1990-2006)
 The Present (2007-2011)
 Sneak peak into the future business

3. Early years (1913–1989)
establishment & search for a differential

4. Early years (1913–1989)
CAPABILITIES
CUSTOMER
• HOW? RELATIONSHIPS
• CLIENT Production
• SEGMENTS Importation (U.K)
• VALUE PROPOSITION Personal assistance
• “High quality luxurious products”
•
• Products:
• Trunks, bags, suitcases
•
• PARTNER
• VALUE PROPOSITION
NETWORK CUSTOMER
• COST STRUCTURE “High quality luxurious
CLIENT
• Production related costs, stores
HOW? SEGMENTS
• CUSTOMER products”
SEGMENTS
• Raw material and
RELATIONSHIPS Aristocracy and
• Personal assistance upper class
•
luxury items
CUSTOMER Products:
• SEGMENTS suppliers (Europe and US
• Aristocracy and upper class (Europe and US travelers mostly) Trunks, bags, suitcases
• (incl. I.P.I. Spa)
KEY RESOURCES
travelers mostly)
• Staff
• Material
• Know-how
•
• CAPABILITIES KEY RESOURCES DISTRIBUTION
•
• Production
Staff CHANNELS
• Importation (U.K) Material Stores in Milan (1)
•
• REVENUE
Know-how
• FLOW
• Sales of goods
• DISTRIBUTION CHANNELS
• Stores in Milan (1)
•
• PARTNER NETWORK
•
COST STRUCTURE REVENUE
• Production related
Raw material and luxury items suppliers FLOW
•
• costs, stores Sales of goods
•
•

5. Prada-Bertelli reign (1978-1989)
time for expansion

6. Prada-Bertelli reign(1978–1989) reign (1
CAPABILITIES
Production
– 1989) CUSTOMER
RELATIONSHIPS
R&D Personal assistance
New stores
VALUE PROPOSITION CUSTOMER
“High quality luxurious SEGMENTS
PARTNER products made of
NETWORK Upper class (Europe,
innovative materials” US and Japan)
Raw material and
luxury items Fashionistas
Products: leather goods, Models, mostly
suppliers footwear, accessories, women
backpack, women’s
clothing line
DISTRIBUTION
KEY RESOURCES
CHANNELS
Staff
Stores in Milan (2) +
Material
DOS in New York,
Know-how
Madrid, London, Paris,
Tokyo
COST STRUCTURE REVENUE
Production related costs, FLOWS
stores Sales of goods
Sales by 1980 - $450.000

7. The Golden Age (1990–2006)
growth, aspiration and acquisitions

8. The Golden Age (1990–2006) reign
CAPABILITIES CUSTOMER
Production, R&D RELATIONSHIPS
Personal assistance
Combining fashion & fine
arts, globalization, Innovative shopping
marketing, stock actions service
VALUE PROPOSITION
PARTNER “Smart, sophisticated, CUSTOMER
NETWORK luxurious high quality SEGMENTS
Raw material and products with innovative Upper middle class,
luxury items suppliers, shopping experience“ celebrities,
Luxottica, Azzedine Products: leather goods, fashionistas
Alaia, Puig Beauty & women’s clothing, footwear,
Fashion, architects accessories, backpack, Men&women
and designers Miu Miu, Car Shoe, Church’s
Sport line, men’s collection, DISTRIBUTION
KEY RESOURCES skin care, eyewear, fragrances CHANNELS
Staff Stores in Milan +
Material DOS in NY, Madrid,
Know-how London, Paris,
8 factories & 4 Tokyo, Japan, LA
manufactures
COST STRUCTURE REVENUE
Production related FLOWS
costs, DOS, marketing Sales of goods, stock actions
Sales by 1990 – $31.7 million

9. The Present (2007-2011)
technology flows in

11. The Present (2007–2011)
CAPABILITIES CUSTOMER
Production, R&D, RELATIONSHIPS
Combining fashion & fine
arts, globalization, Personal assistance
marketing, stock actions Innovative shopping
Combining fashion experience
&technology
VALUE PROPOSITION
PARTNER NETWORK “Smart, sophisticated, CUSTOMER
Raw material and luxury luxurious high quality products SEGMENTS
items suppliers, with innovative shopping Upper middle class,
Luxottica, Puig Beauty & experience“ celebrities,
Fashion, architects and fashionistas, men &
designers, Products: leather goods, women’s women
LG and men’s clothing, footwear,
accessories, backpack, sport line,
skin care products, eyewear,
KEY RESOURCES fragrances
DISTRIBUTION
Staff, material, mobile phones
CHANNELS
know-how 358 DOS , Franchise
11 factories & 4 (30)
manufactures E-store
COST STRUCTURE
REVENUE FLOWS
Production related costs,
Sales of goods, stock actions
DOS, marketing
Sales by 2010 - $2.7 BILLION

12. Business strategy SWOT analysis
STRENGHTS WEAKNESSES
- competitors have a stronger brand value and
- design/quality/heritage; product portfolio
are more aggressive
- dynamic capabilities
- too scattered business model
- controlled distribution and production
- few iconic products
- marketing strategy and skills
- high cost structure
- intra-industrial; inter-industrial alliances
THREATS
OPPORTUNITIES
- growing debts
- increase brand value through value adding (new
value proposition), innovation - loosing luxury brand value
- new strategic partner - competitors growth is faster
- concentration on certain products and brands - unsustainable partnerships
- gaining competitive edge over competitors - counterfeits and copying
Compiled by authors

13. FUTURE BUSINESS
SUGGESTIONS

14. Sell Car Shoe and Church’s
brands
Entering new markets:
Egypt, Peru, India
Increasing brand value (by
focusing on Prada’s
roots, cure values and
customers expectations)
By 2013 - 550 distribution
stores, franchises from 10%
to 13%, raising franchise
fee
NEW VALUE PROPOSITION

15. PRADA’S MAIN CUSTOMER
Upper middle class –
high society
Aged 35-60
Luxury products with
high quality
Personality and
exclusivity
Culture and art
Luxury traveling

16. “Exclusive Prada travel and lifestyle experience”
Fashion, luxury travel and cultural related
services and privileges all over the world!

17.  Strong global presence, premium network for high-spending clients
 Criteria: Annual purchase volume (existing client), income and assets
($3250; $121923) for a new client

18.  Deepend trust
 Stronger customer relations
 Prada’s clientele
– new value proposition for
 Increased awareness of
existing client
their brand and awareness in
New customers with high
Asia and Europe
incomes
Re-enforced brand image
 Increased brand value
Annual fee - $300 per client
Additional source of revenue

19. Potential future business model
CAPABILITIES CUSTOMER
Production, R&D, RELATIONSHIPS
globalization, marketing, Personal assistance,
stock actions innovative shopping
globalization experience,
Combining luxury with AMEX PRADA
fashion, travel and culture
PARTNER NETWORK VALUE PROPOSITION
Raw material and luxury „The Real Prada’s experience CUSTOMER
items suppliers, – high quality products, SEGMENTS
Luxottica, Puig Beauty & innovative shopping Upper middle
Fashion, experience and luxury travel class, High society
& lifestyle with AMEX Age: 35-60
AMEX PRADA“
Products: bags and other leather
KEY goods, women’s and men’s DISTRIBUTION
RESOURCES clothing, footwear, accessories, CHANNELS
Staff eyewear, fragrances DOS (539),
Material Benefits from AMEX PRADA E-store, Franchises
Know-how (11), Egypt, Peru,
Partners India
REVENUE
COST STRUCTURE
FLOWS
Production and
Sales of goods, stock
partnership related
actions, paybacks on
costs, DOS, marketing
partnership deals

20. Thank you for
your attention!