Deep inside the dark and chilly cellas of one of Burgundy’s finest producers of wine, Erwan Faiveley is holding forth on the art and science of making a great Pinot Noir or Chardonnay. The seventh-generation CEO of Faiveley in Nuits Saint Georges, the 36-year-old chief executive is the first in his family to have an MBA (from Columbia Business School).
Between generous pours of wine, he is answering all kinds of questions from a group of visiting MBA students from HEC Paris on the pricing, marketing, distribution strategy, and operations of one of Burgundy’s finest and largest winemakers. At the high end, a single bottle of Faiveley’s best offering sells for £1,000. Faiveley spends more than five hours with the students and a couple of professors, a visit typically reserved for no one other than international wine dealers.
But at HEC Paris, a business school renowned for its deep expertise in luxury goods and marketing, this unique excursion is just par for the course. Every year, as part of its academic offerings, the school organizes field trips to Hermes workshops, Dior headquarters, and the Pommery cellars in Reims among other places where students gain the perspective of top executives grappling with the ultra-competitive world of luxury products.
‘LITTLE BY LITTLE, WE HAVE ENRICHED THE LUXURY PORTFOLIO’
Though the school is placing greater emphasis on entrepreneurship, digital innovation, and social enterprise, HEC Paris is renowned as an MBA training camp for makers of luxury products and services. The school’s interest in luxury began 12 years ago when HEC Paris went to China to do a small executive program on luxury marketing. “Little by little, we have enriched the luxury portfolio,” says Anne Michaut, a professor of marketing who directs the school’s luxury efforts. Today, there’s a rich menu of electives, certificates, academies, projects and executive programs on all things luxury.
The school’s approach in this field rests on three pillars: Its teaching programs, academic research, and business partners, all led by a dozen full-time and affiliate professors. For those interested in luxury, there is a wealth of offerings, from three-hour seminars on such topics as Luxury Business Models, Investing In Hedonic Assets and The Psychology of Experience to half-day seminars led by executives of the big luxury brand conglomerate LVMH on supply chain management, selective retailing and excellence.
MANAGING A LUXURY BRAND REQUIRES STUDENTS TO LAUNCH A NEW FRAGRANCE
In each case, big luxury brands play a key role. A case on Louis Vuitton is used to teach supply chain management principles, while Sephora and LVHM Fragrances are trotted out for lessons on selective retailing. There are deep dives into ehe world of gems and jewelry business as well as the world of luxury wines. A business simulation called LuXim challenges students to grow a small company larger without degrading the brand.
This year’s annual LVMH Business Challenge asked student teams to “imagine the fragrance experience of tomorrow” for Christian Dior. Some 214 students on 51 teams were involved in the project to rethink how fragrances will be purchased by consumers in the future. “It was an opportunity for students to think about the luxury brand and its expression in a retail environment,” says Michaut.
As part of a certificate on Excellence in Client Experience, MBA candidates and other students worked on the launch this year of a new e-commerce website for Berluti, the upscale men’s shoe brand that is part of LVMT. In Managing A Luxury Brand, a course taught by Alain Lorenzo, the former CEO and president of LVMH Fragrance Brands, a major assignment is the launch of a new fragrance which requires teams of four to five students to do everything from storyboard to detail the likely advertising campaign for the launch to the design of the bottle.
This year, his class tackled a new fragrance for Givenchy. Last year, it was Fendi. “We get them to formalize the brand’s DNA and to understand the language of luxury,” says Lorenzo. For one class, he brings in a guest lecturer from the creative side of the business to show how differently truly creative professionals think and work. “The creative process is not a logical process,” he says. “Getting in touch with creative people is an alien concept for most business students.”
‘ABOVE ALL, WE ARE A BUSINESS SCHOOL’
Luxury, of course, is just one gem in the HEC Paris playbook. “Above all,” Michaut makes clear, “we are a business school.” Indeed, not unlike private equity or venture capital which attracts relatively few MBA graduates, luxury retailers and hoteliers, fashion houses, higher-end cosmetic and perfume makers, and premium wineries are businesses that hire small numbers of MBAs—just 5% of the students in the Class of 2016. They went to some big names, including Chanel, Chloé, and L’Oreal, but the big three hiring industries at HEC Paris are not all that different from most U.S. schools: Consulting attracted 21% of the grads, financial services 18%, and tech 17%.
Andrea Masini, the new dean of the school’s 16-month MBA program, has increased the program’s annual intake to 254 students this year from 210. He is aiming for an ideal class size of between 260 and 270, though the school believes it will be at full capacity at 280. The growth has had little impact on the school’s highly selective admissions process over two intakes in January and September.
HEC Paris accepts only 17% of its applicants, one of the lowest acceptance rates for any European business school and lower than Wharton, Columbia, Chicago Booth, or Northwestern Kellogg. He believes the increase will make HEC Paris a still more appealing recruiting ground for companies. “There is room for everybody in the business,” says Masini. “INSEAD is a school to turn consultants into better consultants. We prefer to customize. We need a scale to be visible in the market but don’t want to grow it beyond the market’s size.”