the compromise didn't pay off and the high prices resulted in a huge drop in revenue. Their distribution plan also failed with so many American stores closing at once. Dawn Mello's biggest strategic mistake was choosing style over fashion, which changed customers' perception of Gucci. their strategy did not include what customers want and their perception of Gucci. 3. Industry Profit Potential (1989): Buyer 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 medium strong with unconsolidated suppliers on high quality products. They had to train and invest heavily in suppliers to create a loyal supplier base. With a wave/surge/wave of acquisitions and big players trying to acquire small players, internal rivalry was very high. Gucci's main competitors were Prada and Louie Vuitton. Threat to entry/from entry was low within/on high barriers to entry, such as established brand images controlled by major players. Substitutes were almost low in/on none