Strategy report · Strategy Making in the Age of AI, University of Bath · 2024
Hermès Strategy Report
Resilience across economic and sustainability landscapes
Summary
How do you build a ten-year strategy for a business defined by heritage, scarcity and slow change, using tools built for speed? In a final-year group project, we produced a 138-page strategic analysis and plan for Hermès, combining classic strategy frameworks with AI-enabled workflows. I took on a leadership role in the group: I wrote the market analysis, co-led strategy development, and became the report's editor, overseeing progress, filling gaps and shaping everyone's contributions into one highly visual report.
My role
- Wrote the market analysis, covering industry structure and dynamics and competitors, using Porter's Six Forces to identify the structural pressures that anchored our scenarios
- Co-led strategy development, making sure the internal and external analysis shaped the final recommendations
- Redesigned everyone's contributions into a single, highly visual report in Canva, restructuring the argument and turning analysis into graphics
- Became the report's editor in the process: I oversaw progress, filled gaps in the analysis and made amendments so the final report read as one coherent piece
Strategy making with AI
Prompt engineering
Role-play prompts, such as asking the model to act as a luxury industry analyst modelling a recession, plus iterative refinement and chain-of-thought prompting to expose weak assumptions.
AI-supported analysis
First-draft PESTLE factors that we then filtered and ranked, and a mock talk-show interview with a luxury CEO under set economic conditions. We kept Hermès' history in full when AI advised cutting it.
Agentic workflows
In Make.com we built agents with distinct roles (macroeconomic analyst, sustainability strategist, brand guardian, financial lead) that debated trade-offs before agreeing recommendations.
We treated every AI output as a starting point to review, validate and challenge, never as fact.
The analysis
Internal. Using VRIO and core competency mapping, we found Hermès' strength rooted in craftsmanship, exclusivity and tight control of production and distribution. Leather goods are the strategic core: the largest revenue share, central to prestige, and the division that funds the others. Artisan-led production limits how far it can scale.
External. Demand for luxury leather goods is strong, especially in emerging markets, but competition from large conglomerates is intense. Sustainability is a growing structural pressure, and digital engagement matters more for reaching younger customers.
Scenarios. From a PESTLE review, we chose two critical uncertainties, global economic stability and consumer demand for sustainability, and built a four-scenario matrix. Downturns put resilience first; sustainability-led futures reward circular production and traceability; stable conditions favour heritage and steady innovation.
The strategy
Immediate
- Strengthen sustainability initiatives
- Improve digital engagement and e-commerce
- Diversify the supply chain for resilience
Short term
- Invest in sustainable materials
- Protect traditional luxury positioning
- Prepare to lead on transparent production
Medium to long term
- Expand global reach and strengthen core products
- Build circular economy practices
- Develop digital and partnership ecosystems
What I took from it
Strategy is disciplined judgement under uncertainty. The project combined rigorous frameworks, close collaboration across a large team and careful use of AI, and stress-tested every recommendation against the scenarios before it went in.