What drives an MBA student? One of the main motivators used to be the desire to build a lucrative career in international investment banking and finance. Now, as the wealth gap increases, more MBAs are heading for careers in luxury brand management, helping to exploit niche markets for items such as yachts, high-performance cars, jewellery, fashion, fine food and vintage wine, where profit margins are high but success is down to strategy, product knowledge and attention to detail – and the ability to close a sale.
The International University of Monaco offers Masters courses and an MBA in luxury brand management, French business school ESSEC runs a specialist Masters degree in luxury management, while Paris-based HEC has an executive MBA in luxury brand management. These programmes attract students from across the world, particularly from rapidly expanding economies such as China and India.
This year, Milan-based business school Bocconi has teamed up with Bulgari, makers of luxury watches, jewellery and perfumes, to create a new track to its standard full-time MBA. For six months, a group of selected students follow the track in luxury business management, leading to specialisation in a sector that, despite recession, shows no sign of a slow-down.
Students spend their six-month track at a dedicated executive training centre on the top floor of Bulgari's Rome headquarters, being taught by a combination of Bocconi faculty and the luxury brand's top executives. The track includes placements at Bulgari's operations worldwide, including Germany, Hong Kong, Singapore and India.
Luana Carcano, professor of strategy and co-ordinator of the track in luxury business management, explains that Bulgari approached the business school because it was impressed by the contribution of the alumni it had hired for general management roles and felt the need to professionalise its marketing, retail, supply chain and logistics operations. "Bulgari was experiencing a shortage of managers with knowledge of the fashion business and luxury brands. And they understood the valuable contribution of our alumni. Bulgari's chief finance and organisational officer, Flavia Spena, has a Bocconi MBA," says Carcano. Francesco Trapani, CEO of the Bulgari Group, adds: "I am proud that Bulgari can contribute directly to the development of the managerial competencies of the participants. Investments in quality and education have always guaranteed the highest return."
They piloted the track in 2009-2010, with eight students selected by Bulgari's recruitment executives at the end of a rigorous interview process. This autumn, 20 students will be recruited. Students opting for this track of Bocconi's MBA will spend half of their time working at Bulgari. Bulgari executives have helped design the programme and deliver it working alongside Bocconi academics. "It's a very interesting group," says Carcano. "In our pilot cohort we had one Italian, a Portugese, a Greek, a Russian, a Chinese and two students from India. And the group is evenly split between men and women."
Bulgari see a real opportunity to use talent – students work on "live" problem-solving projects that can add value to the luxury brand's business. So is Bocconi's involvement in luxury goods merely a smart branding exercise or is it part of an emerging trend? GCU London, Glasgow Caledonian University's postgraduate business school certainly believe so. They have just launched their own MBA in luxury brand marketing, following a successful pilot that started in February.
Based on Fashion Street in Spitalfields, the former heart of London's "rag trade", GCU London's innovative year-long MBA is designed to equip students for career development within the global luxury industry. "We aim to keep our MBA niche and focused," says Professor Christopher Moore vice dean of GCU London. He adds, "GCU is a leading centre for academic research in the luxury goods sector and attracts international PhD researchers."
With cohorts starting in September and February, the course provides those already working in the sector with the chance to climb further within their organisation while passing on the benefits to their business.
The MBA has links with many leading industry professionals. Brian Duffy, exiting European president for Ralph Lauren, is a visiting professor, and House of Fraser sponsors a full-fee scholarship to cover the £16,000 MBA. The programme has attracted endorsements from other luxury businesses, including concierge firm Quintessentially and international fashion and furniture brand Margaret Howell.
Professor Moore is clear that luxury brands need MBAs in order to maximise their worldwide appeal: "The MBA is about giving people tools to become strategic managers. It's about transforming brands."
But when it comes to style, Bocconi's MBA is in a class of their own. Says Carcano: "By the end of our MBA you start seeing a transformation among the students. The women dress in couture labels and the men are wearing amazing watches. They become very passionate about their products."