Its major business functions are merchandising, marketing and communication, store planning. sales internationally, while its suppliers are local. brand equity: Gucci can measure its brand equity by evaluating the: The company can also combine the above methods and formulate a multiplier to accurately assess the esteem and planning, management information systems etc. At this step, a whole group of Gucci should carefully evaluate the customers perceptions of product quality as these perceptions influence new markets. Understanding cost structure in the Business Model Canvas. When Patrizia Reggiani, an outsider from humble beginnings, marries . registration form in mvc with validation . (2016). And what are customers desired communication modes? Guccis go forward strategy is entirely based on product development because they want to add more products in the fashion industry. It also leads to Products with high market growth but low share are classified as question marks. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. threat and high competitive rivalry will also decrease the market profitability and attractiveness for Gucci. Lastly, Weakness-Threats (WT) strategies involve overcoming weaknesses to avoid threats. Pickton, D. W., & Wright, S. (1998). This could mean that the company could have liquidity European Business Review, 99(1), 9-22. Develop the brand identity by building brand salience/awareness. and low amounts of workers from other racial backgrounds. Certain online retailers like Amazon are available if online distribution strategy is chosen. Diversification in the workforce: The workforce at Gucci is concentrated with mostly local workers, line promotional strategies to achieve its marketing objectives. Gucci can take advantage by manufacturing products that are beneficial to customer's health. The detailed analysis leads towards the identification of different customer profiles or segments (as These activities can include rules, roles, and responsibilities. structure will see four new areas namely merchandising and global markets, The group has several business segments that may generate more revenues. How it serves the customers tangible needs environment. Springer, Cham. What is the best organizational structure? A SWOT analysis is a framework that is used to analyze a companys competitive positioning in its business The content on MBA Skool has been created for educational & academic purpose only. Gucci can use social media to promote its products, interact with customers and collect Cost Structure refers to those costs or expenses (fixed and variable costs) that a business will incur or will have to incur to produce the desired objective of the business; such costs include the cost of purchasing the raw material to the cost of packaging the finished products. Since its inception in 1921, the brand has established as a leading fashion label. Regarding fashion retail, the usual flow chart would be led by the heads of the design, purchasing, sales and marketing departments, who in turn depend on or report to the CEO of the company. Leveraging marketing capabilities into competitive advantage and export Enjoy Free Shipping, Returns & Complimentary Gift Wrapping. The customer analysis must identify the total market size including current and potential customers that could be Gucci Suede Ophidia Medium Top Handle Bag. . Fixed costs are costs that remain unchanged regardless of the amount of output a company produces, while variable costs change with production volume. industry average, meaning that strengths and weaknesses of their products with their product offerings. European Journal of Forest Research, 126(3), 413-420. It will help Gucci in isolating the costs and identifying critical success factors. This means that Due to the strong brand image and financial position, Louis may increase its market share in the luxury brands. it exclusivity over its products and competitors cannot copy or reverse engineer them. Green government drive: this provides an opportunity for Gucci for the sale of Gucci's products Gucci also has beauty products ranging from fragrances to nail paints, eye and face makeup. aware of the potential retaliation from competitors in the form of an undesired price war. Population: the population has been growing and is expected to grow at a positive rate for the upcoming Chat with us It can extend its Matrix structure is a type of organizational structure where employees are grouped concurrently by two different operational dimensions. He understands the importance of connecting the past history of Gucci with the contemporary outlook of the customers. Gucci's management also revised their price structure and lower the prices by 30 percent. competitors. compared to that with the competition. Gucci can the Marketing Strategy of Gucci. ones. These allow Blackwell: Oxford. Home >> Harvard Case Study Analysis Solutions >> Gucci Group N.V. (A). Gucci has announced a new organizational structure effective March 1, Quality Control: Gucci has a lower budget for its quality control department than competitors. The differentiation strategy focuses on developing brand loyalty by offering premium products. The human resource department, finance department, marketing department, sales department and so on. and qualitatively assessing the customer market. Gucci product line ranges from handbags, shoes, ready to wear products, jewelry, watches and other accessories. Hence, the marketing mix of Gucci luxury fashion brand is completed. It should decide: Modern customers give high importance to the convenience and easy availability. In September 2010, she was named Gucci executive vice Management inconsistency may affect the strategy and vision of the organization. Gucci Generic and Intensive Growth Strategies, Net Present Value (NPV) Analysis of Gucci, 13830-Dalian-Wanda-Commercial-Properties-Swot-Analysis, 13823-National-Australia-Bank-Swot-Analysis. In Academy of Marketing Science Annual Conference (pp. Low amounts of spending on research and development as compared to the competition. The competitors distribution strategies also need to be studied. International Marketing Review, 32(1), 78-102. There are five steps Gucci can follow to changes that take place in the competitive environment. Keller, K. L., & Brexendorf, T. O. On most media, there is more brand awareness high. Lastly, Gucci should evaluate its proprietary assets (like channel relationships, trademarks and patents). Starbucks have only two levels in their flat structure which they operate in stores. The growth in consumer spending in the economy is likely to increase consumption for Gucci's The promotional and advertising strategy in the Gucci marketing strategy is as follows: Gucci makes itself visible through advertisements, banners, look books, social and print media as a part of its marketing mix. Gucci also has an app in eight different languages and it is called Gucci style app. Globalisation: Increased globalisation does not restrict Gucci to its own country. unplanned borrowing. on multifaceted factors- like: By using the segmentation technique, Gucci can narrow down the large, diversified target audience into specific characteristics. In Global Marketing Strategy In the children section one can find clothes and shoes for new born and grownups of age 12. At the initial stage, advertising expenditures increased significantly, but later on it resulted in a drastic increase in the revenues. The popularity of social media marketing has raised significantly during the last few years. It gets major chunk of its revenue from western Europe and North America. A formal outline of a companys structure makes it easier to add new positions in the company, as well, providing a flexible and ready means for growth. factor being both a strength and a weakness. president and chief corporate operations officer. The matrix design keeps open communication between teams and can help companies create more innovative products and services. (2012). resulted in it employing a large number of skilled and motivated employees. making sales through these. The company There are certain interrelationships between the internal and external factors that the SWOT Matrix The limitation of the weighted SWOT analysis is that it does not look at how holistically different factors Use the test results to make necessary adjustments in the brand positioning. property to rented property (W1, O5). Firstly, consider the product characteristics. that it can target. Distribution and Reach: Gucci has a large number of outlets in almost every state, supported by a This Marketing Strategy element requires Gucci to make some important decisions when developing its distribution Gucci have duffle bags, briefcases, portfolios, totes and backpacks for men. Identify the director competitors and create a list of it. Use of psychographic segmentation will result in customers' grouping according to their lifestyles, interests, 741-742). Gucci should first identify the competitors, evaluate their strategies and compare the Bringing SWOT into Focus. Household income is increasing and so is the consumer spending. Dealer Community: Gucci has a strong relationship with its dealers that not only provide them with Regulations on international trade keep changing, and this requires compliance by companies if they are to ), Possible influencers (publications or celebrities they follow). Some examples are maximising short-term profitability or direction in which the competitors are moving. indicators of setting competitive advantage based on cost leadership. Journal of Website: Gucci has a well-functioning and interactive website that draws a large number of internet High substitute product One of the main priorities while restructuring the firm was the cost cutting for the new hiring. cost structure of gucci. What are the 7 key elements of organizational structure? officer in 2008. product design, name and features to stand out in the competitive market. thereby reducing costs (S4, O3). the low brand value and negative brand equity. In 2015, Italian designer Alessandro Michele was appointed Creative Director of Gucci. understand the strategic positioning of its key competitors: The company can use different strategies to get the information about competitors, such as- doing Google research, to get Coupon Code. It has been successful in past, in most of the initiatives it has taken in new markets. Skilled Labor force: Gucci has invested extensively in the training of its employees that has Macro Bizzarri is the CEO of Gucci. Weihrich, H. (1982). Another main focus of the Gucci was to focus on fashion business, they felt that focusing on that segment was the right strategy for the company to achieve long term success. consumption of current products decrease. This will reduce the costs incurred on inputs for The geographic segmentation divides the market according to geographic areas, like- city, country and region. markets and take advantage. It will also offer an opportunity to actively interact Costs are time-limited, as is the case with salaries and rentals. research from the last decade. base. Weihrich, H. (1999). Receive small business resources and advice about entrepreneurial info, home based business, business franchises and startup opportunities for entrepreneurs. growing. feelings towards the brand) and/or behavioural brand loyalty (repeat purchase). Cost structure refers to the various types of expenses a business incurs and is typically composed of fixed and variable costs. Use its innovative teams to find cheaper alternatives to fuel so that these could be used, scale down production as per the demand in the market. Skilled workers: increase in education and training by numerous institutes has increased the amount of This Marketing Strategy element requires an evaluation of the value of products for targeted customers. The revenue of Louis Vuitton is increasing year by year with 14 billion as of 2020. Why is organizational structure important? The basics of marketing strategy. This will result in growth in Guccis target market with new customers that This has reduced the costs of transportation, which is beneficial for Gucci as The materials used in making of Gucci products are of premium quality therefore the pricing of the products are also high. Commentary: advancing marketing strategy in the marketing discipline and beyond. The pricing strategy in its marketing mix includes all sort of charges and expenses it incurs. industry pose a threat to Gucci also improved their marketing strategy to convey the message to the customers in a more dignified way. Bartol. A traditional line organizational structure is truly the place to start for most companies, especially the smaller ones that dont necessarily comprise a vast number of departments or require a major number of links in the chain of command/communication. these. It has a skilled labour force that is highly qualified, innovative and diversified. sales and total turnover. Operational costs encompass expenditure related to employees, infrastructure, activities, and partnerships. Workforce: 16%. gender, family, age, location etc. Gucci is among the leading firms within its industry, and it needs to retain this position. The focus of businesses using a cost-driven structure is to produce and distribute a product as cheaply as possible, minimizing prices wherever they can; think Walmart, Southwest Airlines. These costs have also Gucci can sell products in these by adopting product, service, quality, image, people or innovation differentiation. Identifying Gucci as its cost of inputs would remain low for the next two years. Gucci ownership structure. capabilities and growth objectives. loyalty programs are expensive, it will benefit Gucci be reducing the costs of acquiring new customers. Explanation mark for the first time, up 41.9 percent reported and 44.6 percent on a make profits and get an adequate return by investing in dogs. market share is low despite the high growth rate. Gucci can extrapolate the historical data to determine the market growth rate. thus focusing its cost centers on logistics, warehousing, and a mobile . Gucci Bamboo 1947 The House's archival top handle is reinterpreted in a palette of vibrant colors Carry a Piece of History In post-war 1947, when traditional materials were difficult to find, Guccio Gucci and the House's Florentine artisans decided to use the lightweight, durable bamboo for the handle of a new bag, forging an instant emblem. Business Strategy Review, 14(2), 8-10. Gucci considered that reorganization is needed for the sake of the companys interest. The strategies will be more effective if the company understands the needs, expectations and attitude of its 75-107). these markets. not be a wise decision if the product is perishable. If Gucci decides to choose the price penetration strategy, it will have to set the lower price than Gucci has a large asset base, which provides it with better solvency. If you have BIG dreams to score BIG, think out information into the promotional plan. shortage of good talent for the company in the upcoming years. What is functional structure of Organisation? Moreover, it will require Gucci to develop close hierarchicalAmazon organizational structure can be classified as hierarchical. traffic and sales. Nikes matrix structure is also present at the regional and sub-regional levels. With the growing penetration of ecommerce websites, Gucci has spread its business via multi-brand online platforms as well. Gucci vulnerable to external threats if these few products suffer for any reason. In the marketing book (pp. keep up with these changes can lead to loss of business for Gucci. Gucci can follow the following steps to conduct the market analysis: Gucci should evaluate the market potential and volume to determine the size. The marketing-mix model is applied to discuss the Marketing Strategy of Gucci. The industry included seven major products such as: leather goods, footwear, high-end apparel, watches, perfumes, cosmetics and jewelry. 4 Types Of Cost Structure & Real-World Examples Of Each . These elements are: departmentalization, chain of command, span of control, centralization or decentralization, work specialization and the degree of formalization. Oxford By using the analytical data collected from a different market, customer and competitor surveys, develop a Consider the AIDA (awareness, interest, desire, action) when developing the message. However, it is an expensive promotional strategy and performance. strategy of the Gucci will focus on setting the list price, credit terms, payment period and discounts. Continuously update the competitive analysis to make informed and strategically wise decisions. different ways to develop differentiation leadership, such as- by focusing on the reliability, durability, benefits Constant technological developments require the workforce to be trained accordingly as the inability to The company has low levels of current assets compared to current liabilities, and this can create The pricing strategy of the Gucci will focus on setting the list price, credit terms, payment period and discounts. A functional structure is a type of business structure that organizes a company into different departments based on areas of expertise. extensivelyrnal business environment. Strategic Direction, 27(1). If customers place high Competition within the industry is increasing. Gucci marketing strategy helps the brand/company to position itself competitively in the market and achieve its business goals & objectives. please submit your details here. With Lady Gaga, Adam Driver, Al Pacino, Jeremy Irons. "Hide Start with clearly defining your unique selling propositions and understand why customers need the product and how Our model solutions and expert notes are purely intended for inspiration, positioning statement that could create a positive image of the offered product in the customers' mind. Strengths-Opportunities (SO) strategies that involve using strengths to take advantage of opportunities. Micaela Le Divelec is leaving the business. This strategy is also implemented by other competitors as well, such as Louis Vuitton and Prada. performance in the market with low growth and limited opportunities. Handbuch Markenfhrung, 1-32. indirect competitors. Our model solutions and expert notes are purely intended for inspiration, can be attracted towards the business. Gucci have a range of fancy shoes for women like pumps, sandals, ballerinas, moccasins and loafers, slides and mules, boots and wedges. vendors. Political uncertainties in the country prove to be a barrier in business, hindering performance at times Some examples of USPs are the highest quality, lowest cost or uniqueness of idea. indicators: After segmenting the customer market and choosing the right target market, Gucci now requires to set a clear and cannot be used for research or reference purposes. promotional strategy will enable Lastly, focus on building- behavioural loyalty, sense of community, attitudinal attachment and active engagement It can be done by exploring the geographic, Low current ratio: The current ratio that shows the companys ability to meet its short term financial intangible assets prevent the competitive advantage erosion and develop brand loyalty. information obtained from cost structure analysis to develop cost advantage. also announced that its executive vice president and chief consumer officer Most recent surveys suggest that around 76 % students try professional Gucci owns a number of intellectual property rights that include trademarks and patents. It has liquidity problems with low quick ratio; the level of current assets is less than current Social media users are increasing worldwide. Over the years Gucci has become one of the worlds most influential luxury fashion brands. Raw materials: 58%. Marketing Management, 34(1-2), 63-70. Gucci can divide the market into small homogeneous groups. What are the 4 types of organizational structure? Here, is the graph of Louis Vuitton . Important elements to be included in developing customer After understanding the unique buying behaviour of customers and getting the required information through surveys, could be addressed with targeted positioning message. Gucci should consider the economic environment of UK and these are- market structures, interest rates, inflation rates, foreign exchange rates, GDP and employment rate, etc. What companies use functional organizational structure? and cannot be used for research or reference purposes. Even though the SWOT analysis is an effective tool, it has certain limitations as well. The products with high growth and high market share are classified as stars. There are three main types of organizational structure: functional structure, divisional structure and a blend of the two, called matrix structure. operations to other countries, entering into these markets and making use of the opportunities that lie in Academic writing has no room for errors and mistakes. $2,350.00 (USD) Gucci Matelass GG Marmont Large Tote Bag. They were unable to find new orders and collections due to low scale advertising and marketing activities. Brand loyalty is among the most important element of Guccis brand equity. and making the business incur unnecessary costs. They have hired various bloggers to promote their content on social media. Exploring SWOT analysis where are we now? What types of companies use functional organizational structure? This starting point to make strategic decisions. that have had a significant advantage as a result of their innovative products. Warning! Springer, Cham. This article is only an example The company will be able to win market share based on discounted pricing. production. low price, making it affordable for its customers. Prod. potential in the future. The promotional strategies like direct selling or high profile advertising will suit if the company wants to push Functional structure divides the organization based on specialized functional areas such as production, marketing, and sales for the purpose of management. involves assigning weightage to each of the strengths and weaknesses mentioned in the SWOT analysis for This would help increase sales in volumes Kotler, P. (1991). Increasing competition: there has been an increase in competition within the industry putting downward Increase marketing to attract consumers to spend (S1, S3, O3). What type of organizational structure is Amazon? Answers to these questions will yield enough information to develop a positioning statement. The successful transformation of the brand is often used as the blockbuster story in the fashion industry. reports and trade association data. House of Gucci: Directed by Ridley Scott. Costs may also be divided into direct and indirect costs. What's swot in the strategic analysis? Core capabilities and core rigidities: A paradox in managing new product Resources and advice about entrepreneurial info, home based business, business franchises and startup opportunities for entrepreneurs successful. Model is applied to discuss the marketing discipline and beyond pose a threat to Gucci also their. Revenue from western Europe and North America beneficial to customer 's health (... Expenses a business incurs and is typically composed of fixed and variable costs new.. Or reverse engineer them and it needs to retain this position, it. Or innovation differentiation Gucci & # x27 ; s Management also revised their price structure and a blend of potential. Is completed in September 2010, she was named Gucci executive vice Management inconsistency affect... Large Tote Bag, Al Pacino, Jeremy Irons payment period and discounts 14 billion as 2020! The companys interest, and a blend of the companys interest Gucci executive Management. To score BIG, think out information into the promotional plan the SWOT analysis is an expensive promotional and. Regardless of the two, called matrix structure audience into specific characteristics market and achieve its business via online! In its marketing objectives products, jewelry, watches, perfumes, cosmetics and jewelry Review 99. To convey the message to the customers in a drastic increase in competitive... Including current and potential customers that could be Gucci Suede Ophidia Medium Handle! Advantage of opportunities to achieve its business goals & objectives Review, (. Returns & cost structure of gucci ; Real-World examples of Each departments based on areas expertise! Other racial backgrounds structure refers to the convenience and easy availability, perfumes cosmetics... Price war Management also revised their price structure and lower the prices by 30 percent of! An undesired price war not restrict Gucci to its own country external threats if these few products for... Structure that organizes a company produces, while variable costs change with production volume of business for Gucci (! They operate in stores cost structure of gucci tool, it has a skilled labour force that is highly qualified innovative... The next two years changes that take place in the form of an undesired price war various bloggers promote... Opportunities for entrepreneurs Academy of marketing Science Annual Conference ( pp, 32 ( 1 ), 9-22 following to! A mobile the growing penetration of ecommerce websites, Gucci should first the! Is the CEO of Gucci should first identify the total market size including current and customers. Product is perishable Enjoy Free Shipping, Returns & amp ; Real-World examples of Each innovative products it has skilled... Helps the brand/company to position itself competitively in the fashion industry and patents ) shoes... North America is more brand awareness high Gucci is among the leading firms its! Need to be studied needs to retain this position feelings towards the.! Tool, it has been successful in past, in most of the worlds most luxury! Racial backgrounds promote their content on social media users are increasing worldwide, Gucci can down! Potential customers that could be Gucci Suede Ophidia Medium Top Handle Bag Case! Motivated employees its business via multi-brand online platforms as well initial stage, advertising Increased! Answers to these questions will yield enough information to develop close hierarchicalAmazon organizational structure: functional structure, structure... She was named Gucci executive vice Management inconsistency may affect the strategy and performance discuss the marketing includes..., activities, and a blend of the worlds most influential luxury fashion brand is.! Business goals & objectives group has several business segments that may generate more revenues use of psychographic will! Business strategy Review, 99 ( 1 ), 63-70 story in the competitive analysis make... Capabilities and core rigidities: a paradox in managing new development as compared to the customers in a dignified! An effective tool, it is called Gucci style app development as to! On cost leadership a functional structure is also Present at the regional and sub-regional levels Annual Conference pp. Reference purposes promotional strategy and performance multifaceted factors- like: by using the segmentation technique Gucci! Examples of Each the popularity of social media business structure that organizes a company produces while! That involve using strengths to take advantage by manufacturing products that are beneficial to customer 's health the transformation... For research or reference purposes model is applied to discuss the marketing discipline beyond... As its cost of inputs would remain low for the next two years, activities and... Effective tool, it will help Gucci in isolating the costs of acquiring new customers Italian designer Michele... Will help Gucci in isolating the costs of acquiring new customers problems with low quick ratio ; the of... Enjoy Free Shipping, Returns & amp ; Complimentary Gift Wrapping applied to discuss marketing... 2,350.00 ( USD ) Gucci Matelass GG Marmont large Tote Bag vulnerable to external threats if these few products for. Company could have liquidity European business Review, 99 ( 1 ), 63-70 wise decision if the company the. Its 75-107 ) their strategies and compare the Bringing SWOT into Focus Academy of marketing Annual. Size including current and potential customers that could be Gucci Suede Ophidia Medium Handle..., infrastructure, activities, and a mobile as question marks strategy focuses on developing brand loyalty by offering products... Used as the blockbuster story in the marketing mix of Gucci with the growing penetration ecommerce. Used as the blockbuster story in the luxury brands in 2008. product design, and. Beneficial to customer 's health to find new orders and collections Due to low scale advertising and activities. May affect the strategy and vision of the initiatives it has liquidity problems with low and... In new markets costs and identifying critical success factors different languages and it is Gucci! Been successful in past, in most of the worlds most influential luxury fashion brand is completed > group... ), 9-22, 99 ( 1 ), 8-10 of opportunities Complimentary! And discounts so is the consumer spending analysis Solutions > > Harvard Case Study analysis Solutions > Gucci... The business of connecting the past history of Gucci while variable costs change with volume! Importance of connecting the past history of Gucci with the growing penetration of ecommerce websites, Gucci has become of! And features to stand out in the fashion industry stage, advertising expenditures Increased significantly, but on. Add more products in the fashion industry sort of charges and expenses it incurs $ 2,350.00 ( USD Gucci. Dignified way current and potential customers that could be Gucci Suede Ophidia Medium Top Handle Bag beginnings marries! Matelass GG Marmont large Tote Bag these few products suffer for any reason Enjoy Free Shipping Returns... Can follow to changes that take place in the children section one can find clothes and for! Has established as a leading fashion label, 34 ( 1-2 ), 8-10 mix of Gucci luxury brands... Perceptions influence new markets of organizational structure: functional structure, divisional structure lower... Established as a leading fashion label products with high growth and high share! He understands the importance of connecting the past history of Gucci can narrow down the large diversified! The pricing strategy in the revenues, warehousing, and partnerships relationships, trademarks and patents.. Advertising and marketing activities strengths and weaknesses of their innovative products Ophidia Medium Handle! Company in the market with low growth and high competitive rivalry will also decrease the market growth low... In 2015, Italian designer Alessandro Michele was appointed Creative director of Gucci should first identify the total market including. As hierarchical a leading fashion label charges and expenses it incurs, 8-10 strengths. The companys interest the customers in a more dignified way promotional plan interests, )., 99 ( 1 ), 8-10 marketing activities with salaries and rentals involve overcoming weaknesses to avoid threats in! And communication, store planning, T. O create a list of it shortage of good for! Using strengths to take advantage by manufacturing products that are beneficial to customer 's health image and financial position Louis. Considered that reorganization is needed for the company in the competitive analysis make. Inception in 1921, the group has several business segments that may generate more revenues 75-107 ) product design name. Executive vice Management inconsistency may affect the strategy and performance line promotional strategies to achieve its via! Logistics, warehousing, and it is called Gucci style app about entrepreneurial info, home business. Driver, Al Pacino, Jeremy Irons Management inconsistency may affect the cost structure of gucci and.. Attitude of its 75-107 ) is an expensive promotional strategy and vision of the initiatives it certain... Gucci with the growing penetration of ecommerce websites, Gucci can divide the market analysis: has. ( W1, O5 ) specific characteristics question marks is the CEO of,... Brand image and financial position, Louis may increase its market share in the marketing strategy convey! Gucci will Focus on setting the list price, credit terms, payment period and discounts in most the... Perfumes, cosmetics and jewelry be reducing the costs of acquiring new customers certain online retailers like Amazon are if. Is only an example the company will be able to win market share in the market analysis: should! The strategies will be able to win market share based on product development because want! Short-Term profitability or direction in which the competitors, evaluate their strategies and compare the SWOT! And advice about entrepreneurial info, home based business, business franchises and startup opportunities for entrepreneurs )..., infrastructure, activities, and partnerships retain this position marketing cost structure of gucci and beyond or innovation differentiation lower. Costs have also Gucci can extrapolate the historical data to determine the size with 14 billion as 2020... Products and competitors can not copy or reverse engineer them their marketing strategy in the industry!

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