sector analysis; the case of fashion, luxury and creative industries

average turnover

turnover means the revenue/sales, the average turnover over time is used for monthly, quarterly or yearly averages

average turnover formula

total turnover for period/number of periods

average monthly turnover formula

annual turnover / 12

average size

business size depends on what metrics youre using, but most common are employees, revenue and assets

average number of employees formula

(employees at start + employees at end) /2

average revenue size by sales formula

total revenue/number of periods

average asset size formula

(opening assets + closing assets) /2

gross profit margin formula

(revenue - COGS) / (revenue) x 100

net profit margin formula

(net profit revenue / revenue ) x 100

revenue per employee formula

total revenue / average employees

operating margin formula

(operating profit / revenue) x 100

revenue growth rate formula

(current period revenue - previous period revenue ) / (previous period revenue) x 100

liquidity KPIs (current ratio) formula

current assets/current liabilities

business model

a system with 3 different pillars; a systematic analysis, a more diverse set of KPIs and a capacity to describe a wider range of companies

key 3 elements of a business model

• performance (turnover, growth, profitability, engagement)

• value creation (offer, brand, positioning, what makes your product valuable)

• value vapture (organization, resources, channels)

• organising yourself in the way where the money people use to buy your product goes into your pocket and not someone elses

understanding the sources of value creation

• identity, offer, services

• segmentation, customer niche

• sources of income

analysis of back office stratergies

• key skills

• internalization vs outsourcing

• cost structure

the articulation between strategy and business model

• reinforce and maintain value creation → offer desirability, relevance of positioning/segmentation, adaptation to zeitgeist

• capture value → in house development vs outsourcing, customer knowledge, internal/external growth, HR development

key business models

• even though some companies belong to differnt sectors they can beat the market or be beat by the market

• huge variety of business models; luxury and creative brands, premium and affordable luxury brands, mass market retailers, e-commerce

• a vertical dimension of pricing from luxury to mass market

• a spread of performances that is as important within categories and between categories

key characteristics of luxury and creative brand models

• average price >500%

• a strong identity and esthetic proposition

• uniqueness of models created each season

• a seperation between the roles of artistic director and CEO

• a strong international presecne

• they are driven by creativity; the real opposition exists between this segment and all other brands

• they are companies that are exclusive, they have a very defined brand territory