Reflecting on Chanel’s Diversification Strategy

In today’s lecture and seminar we discussed the importance of a fashion brand’s diversification strategy.  As an example, we looked at Chanel: a somewhat untouchable brand.  Chanel taps into lesbian chic and appears strong, powerful and elite; the brand gives off an essence of forbiddance, a vast majority of consumer’s believe Chanel is something they shouldn’t be allowed to have.  Chanel is not solely a fashion brand, it has released watches, sportswear (including a Chanel surfboard – how cool?!) and jewelry.  Chanel is the only fashion brand in the world that you cannot buy online – something Karl Lagerfeld feels strongly about in order t.  I found this extremely interesting as in today’s “money rich; time poor” society, many consumers prefer to shop online.  However, I understand that this sets Chanel apart from other high-end fashion brands and enables the house to remain exclusive.  Chanel creates all of its beauty, sportswear and jewelry products in house, however it needs licensing deals to ensure all products are up to the standard the brand needs to sustain.  On the other hand, the downsides of licensing out your brand could include: low quality production and manufacture due to the companies wanting to cut corners because of profit margins, low quality packaging, inappropriate distribution/retailers, inappropriate PR and lack of creative control.  An example of this is when Burberry moved a large amount of its manufacturing to Asia, which consequently cheapened the brand over their lack of control.  Chanel understands that it is essential to avoid ‘cheapening’ the brand at all costs, and if we’re honest – Mr Lagerfeld is extremely good at it! 



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