Introduction
The trade-off question at hand is whether Farfetch should prioritize exclusive designer collaborations or expand our affordable luxury offerings. This scenario involves balancing the prestige and exclusivity of high-end designer partnerships with the potential for broader market reach through more accessible luxury products. I'll analyze this trade-off by examining the business context, user impact, technical feasibility, and resource implications.
I'd like to start by asking a few clarifying questions to ensure we're aligned on the key aspects of this trade-off. Then, I'll walk through a structured analysis framework to evaluate both options and provide a data-driven recommendation.
Step 1
Clarifying Questions (3 minutes)
Why it matters: Helps understand the baseline and potential for growth in each segment Expected answer: 70% high-end, 30% affordable luxury Impact on approach: A more balanced split might suggest room for growth in affordable luxury
Why it matters: Indicates which strategy has been driving growth Expected answer: Exclusive collaborations showing higher margins but slower growth Impact on approach: Might suggest a hybrid strategy to balance growth and profitability
Why it matters: Helps identify potential for cross-selling or cannibalization Expected answer: 20% overlap, with most customers sticking to one category Impact on approach: Low overlap might suggest targeting different user segments with each strategy
Why it matters: Assesses feasibility and potential roadblocks Expected answer: Affordable luxury requires more robust inventory management Impact on approach: Might influence timeline and resource allocation
Why it matters: Determines if we can execute both strategies effectively Expected answer: Strong designer relations team, need to build mass-market sourcing Impact on approach: Might suggest phased approach or strategic hiring
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