Spotlight: Inside Prada’s Knowledge Workshop

September 11, 2018
By Knowledge Leaders Team in Knowledge Leaders

For decades, the fashion industry has tried to explain the elusive magic of the Prada brand. “Some designers are seekers of trends, but Prada actually is the trend, season after season,” the New York Times Magazine wrote. And this summer, when Jeff Goldblum appeared on Jimmy Kimmel Live!  wearing a shirt with flames licking up the side, observers marveled at Goldblum’s “act of performance art.” Who would pay $1,200 for such an ugly shirt? Soon photos of celebrities wearing the flame shirt multiplied, and if you liked that, Prada has a new banana bowling shirt on offer for $1,700.

Prada’s look has been called “eccentric, ugly, strange, in bad taste … expensive,” writes The Fashion Law. Maybe the brand’s enduring leadership comes from chief designer Miuccia Prada’s view: “the investigation of ugliness is, to me, more interesting than the bourgeois idea of beauty.”

Or maybe it comes from Miuccia’s preference for social and cultural research over fashion. The youngest granddaughter of founder Mario Prada, Miuccia took over Prada in the 1970s, after completing her PhD in Political Science and training as a mime. Soon she brought on her Tuscan husband Patrizio Bertelli to spearhead international expansion of the brand. The pair now serve as co-CEOs, she focused on design, and he on business.

Some credit Prada’s strict adherence to the business model Bertelli introduced in the 1970s, whereby Prada maintains direct control of all processes through every stage, from design to production.

The real reason for Prada’s leadership, however, is quickly identifiable to those of us who measure innovation. After nearly five decades of running what its CEOs describe as an “experimental workshop of ideas,” Prada has built up the hallmark of a Knowledge Leader company: rich stores of intangible capital that fuel future innovations. A look at our intangible-adjusted financial statements reveals the pattern.

Prada spends more on R&D (4.3% of sales) than any company in the apparel, accessories and luxury goods industry across the developed and emerging markets. The firm is the second-biggest spender on advertising and firm-specific resources in the group at 15% of sales, and Prada ranks near the top of the list for intellectual property as a percent of assets at 23.3%.

The bulk of Prada’s R&D investment goes to testing new materials and cutting-edge processes. The company encourages constant creative experimentation at the drawing board and testing room with new designs, innovative fabrics and raw materials, and the most novel production techniques.

Prada’s new factory in Valvigna, Italy, credit: Prada












At Prada’s factories – the newest, a LEED-certified modern glass-meets-garden affair in Tuscany — highly trained craftspeople don white lab coats to “translate exquisite craft to an industrial level.”  In these carefully architectected hideaways, artisans work in spacious rows, with sketches posted nearby and stops between each station for quality checks. Each year, skilled craftspeople build more than 20,000 prototypes at Prada’s Buresta research center, where only 60 percent ever go into production, according to The Cut. In the Tuscan village of San Zeno, Prada designers mock up every single window and store display in advance as a test run to ensure a meticulous attention to detail.

Credit: Prada












Prada has 21 such artisan-focused plants, 18 in Italy, one in the UK, one in France and one in Romania, all supported by the Prada Academy, which is devoted to knowledge sharing across the network. Prada’s Craftsmanship School, for instance, was created to pass on knowledge and expertise to new artisans. Trainees receive theoretical training in raw materials, manufacturing processes and techniques, technology, IT and English language. Prada hosts similar tracks for retail and corporate staff.

In 2017 Prada launched a new digital marketing and distribution strategy in China, designed to reconceive the Prada shopping experience down to the smallest detail while integrating with retail stores and social networks. Prada called it a “sizeable” investment and expects to expand the initiative globally by the end of this year.

Prada’s net revenues in 2017 were €3.1B. The company was founded in 1913 in Italy. In the most recent letter to shareholders, the co-CEOs summed up the philosophy behind their long-term commitment to innovation. “In society, and thus in fashion, which is somehow a reflection of it, the only constant is change.”

As of 7/31/18, Prada was held in the Knowledge Leaders Strategy.

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