the compromise did not pay off and their high prices led to a huge drop in revenue. Their distribution plan also backfired by closing so many U.S. stores at once. Dawn Mello's biggest strategic mistake was choosing style over fashion, which changed customers' perceptions of Gucci. Their strategy did not include what the customer wanted or their perception of Gucci. 3. Industry Profit Potential (1989): Buying power was high with bargaining power and the customer was not price sensitive, very demanding, selective and did not care about switching costs. Supplier power was moderately strong, with suppliers unconsolidated on high-quality products. They had to train and invest heavily in suppliers to create a loyal supplier base. With waves/wave/wave of acquisitions and big players trying to acquire small players, the internal rivalry was very strong. Gucci's main competitors were Prada and Louie Vuitton. Threat to entry/from entry was low in/on high entry barriers like established brand images controlled by major players. Substitutes were almost weak in/on none