LUXURY brands are brilliant at marketing themselves, so perhaps it was only a matter of time before one put its name on an MBA. But the news that Italian luxury goods firm Bulgari has teamed up with Bocconi business school in Milan may raise a few well-plucked eyebrows. In the next cohort of MBA students, up to 20 – out of a class of about 100 – will be able to choose the luxury business “track” as they are calling it, meaning that while others decide to specialise in finance or marketing, they will spend three months taking their classes at Bulgari HQ in Rome and will have a two-month in-company project at one of the company’s global offices.
It makes perfect sense for luxury goods businesses to get involved with business schools. While many Western businesses have suffered since the downturn, luxury businesses, with their growing market in Asia, have proved resilient. The brands too know that they can no longer rely on domestic markets, but need serious business nous if they want to expand into these newly wealthy regions. This phenomenon cannot have escaped the attention of potential MBA’s either; while once they might have looked for a future in finance or consultancy, these days sunglasses or handbags cannot be considered a frivolous career choice.
Professor Valter Lazzari, director of the full-time MBA at Bocconi, says that with Italy’s reputation in the luxury goods sector it is natural that a school might want to focus on it, and like all industries, the luxury sector has peculiarities. “If you price a candy bar, the higher you price it the worse it is for the consumer, but in the luxury industry the opposite, it gives more value for the consumer.” He says that the Bulgari experience could also interest those who want to work in any area of retail, not just the highest end.
Students are already showing an interest too, and not only those who are obsessed with la bella figura. “The luxury industry is very very attractive in certain parts of the world, especially in Asia. It was less cyclical than you might have expected during the downturn. We have a couple of Chinese students who have applied to the MBA who didn’t know that the luxury business track would be available, and their mentor in China told them to do it because it is the sector that is growing the most in China.”
What does Bulgari get out of it? Bocconi says that it is a question of CSR; Bulgari has decided that it wants to fund education, and this is one way that it does so. No doubt there is also a mutual benefit for both parties – managers at Bulgari will enjoy having access to professors from Bocconi, and vice versa. Also, there’s surely no doubt that the company will be able to cherry-pick talent that it spots while the MBAs are in their offices.
So are we going to see more of this? Will Gucci, Louis Vuitton and Dolce & Gabbana soon be welcoming MBA students through their doors? Patrick De Greve, general director of Vlerick Leuven Gent business school in Belgium, doubts it. While this is a fantastic opportunity for Bulgari, whose name is out there now with MBA students as a business with the aspiration to employ them, but he has some small doubts about the programme. If he were involved with the course, he might worry about how the school will ensure that the quality of the courses taught by the business meet the same standards as those run by academics. He says: “If I was the dean of a business school with this sort of link-up I would have to be clear that all aspects of the pedagogic experience are top quality. And that goes for both sides of the partnership.”
He also worries that the Bocconi/Bulgari track might be too narrow. “Learning about the industry is not just about one business model. If I were a student I would look at that,” he says. Contact with Bulgari is great, no doubt, but what about Ferrari, Mont Blanc or Rolex? Are you truly studying luxury goods, or just the culture and insights of one company?
So we shouldn’t expect to see an avalanche of luxury goods MBAs: there just isn’t the market for that many more, and only a small number of places with the expertise to teach one (and some of those already do, see the box to the right). Instead, business schools might find themselves looking at aspects of the luxury business to learn from them – Vlerick studies L’Oreal as part of the MBA marketing course. Retailers of all stripes might want to look at how luxury brands work.
A trend that the Bulgari MBA does highlight, says De Greve, is a boom in MBAs that are closely connected with one business. In 15 years in business education De Greve says that he hasn’t run a single MBA for a specific company, but he says that pressure is rapidly building for them. Firstly, businesses are more interested in retention management now that they can’t just go to the market and make expensive hires. But more importantly, the MBA industry is becoming homogenised – this has increased quality globally, but they have all become rather indistinguishable and businesses will be looking for a qualification that works in their specific niche. For example, large retailers that move into Africa might feel the need for their top talents to have a specific MBA in retail expertise to make this successful.
Businesses might well want to sponsor MBAs that bring potential top-quality recruits to their doorstep. The benefits, of course, go both ways. “Imagine if Google started an online MBA in web-based marketing, the McDonalds MBA in customer service or the Ferrari MBA in model engineering,” muses de Greve. “Who wouldn’t be interested in that?”
BUSINESS MEETS LUXURY
SDA Bocconi in Milan is not the first business school to become involved with the luxury business – and in fact its Bulgari MBA is not its first entrance into the sector – it already offers a number of masters in management courses that specialise in the Italian luxury industry.
ESSEC in Paris has been running a one-year full-time luxury business MBA since 1995, and its partners include not only Burberry and Chanel but also Krug champagne among many others.
Participants can specialise in fashion and accessories; fragrances and cosmetics; or hotels and real estate. A chair is sponsored by LVMH and there are regular talks from the heads of luxury brands. Students spend two months in a luxury brand, and typically work on projects like creating a fashion brand or a new fragrance.
EMLYON, in Lyon, offers a masters in luxury management and marketing, where students spend time in France, Switzerland and Shanghai, so students can see both ends of the luxury market.
Then there is an alliance of business schools called CEMS that partners with 70 multinationals including LVMH to offer a very highly regarded masters in management.
At the Monaco Business School there is an elective that focuses on the luxury sector, and also an MSc in luxury management. It’s a small MBA, but there is plenty of local luxury brand expertise, and there are regular trips to Paris and Switzerland.
All business schools have dozens of scholarships funded by firms and many also have “chairs” sponsored by businesses, and luxury brands are of course involved – for example, HEC, which is also in Paris, also has a scholarship sponsored by L’Oreal.