The Founding Strategy of Chanel

For the very first case on FoundHer Strategy Studio, I’m diving into the origin story of one of my favorite female founders of all time - an icon, a legend -  Gabrielle Bonheur - a.k.a Coco Chanel.

The tweed blazers. The inverted Cs. No. 5. Chanel is not just a luxury boutique -  it’s a global powerhouse, a lifestyle, and a cultural legacy. But how did it become all that?

Let’s rewind to the very beginning,  not of the brand, but of the woman behind it.

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Coco Before Chanel: The Founder’s Grit

Coco Chanel was born in 1883 in France. Her mother passed away when she was still a child, and her father abandoned the family shortly after. She grew up in a convent-run orphanage where she learned to sew -  a skill that would quietly shape fashion history. At 18, she worked as a seamstress and performed as a cabaret singer where she earned the name “Coco.” It was during this time that she met Étienne Balsan, heir to a textile fortune, who became her early backer.

Coco wearing her own hat design. Source

But Chanel didn’t start with perfume or couture. She started with a hat shop near the Ritz, positioning her brand from the very beginning to attract the elite. Her strategy was simple yet brilliant: build for a defined consumer and let the brand speak their language.

The Subtle Power of Chanel’s Strategy

Coco’s story is full of passion and persistence - but that’s not the only thing that made Chanel a global name. It was strategy done with soul.

1.  Strategic Placement:

Coco didn’t just open a shop. She opened it near The Ritz — a name that carries instant prestige. That location alone anchored her brand in luxury, aspiration, and exclusivity. It wasn’t just retail. It was a presence. The environment elevated the product before a customer even stepped inside.

2. Differentiation Through Fabric & A Story

Her first major product shift? Jerseywear. At the time, jersey was used primarily in men’s sportswear -  casual, comfortable, and far from high fashion. Coco turned it into a fashion statement for women, challenging corsetry and redefining freedom. Her designs were more than stylish -  they were symbolic. They gave women room to breathe both literally and figuratively. That was her “why”:

Chanel was about comfort, confidence, and choice. A brand that freed women not just from restrictive clothing, but from restrictive norms.

3. Purposeful Expansion:

Chanel expanded into perfume, accessories, and eventually the iconic suit -  but she didn’t expand her audience. She expanded her offerings. Everything she launched stayed loyal to her original consumer: powerful, elegant women who craved timeless pieces that elevated their everyday lives. Her products weren’t competing — they were complementing. How? A Chanel dress? Add the matching hat. The signature scent. The quilted bag. Everything was layered, intentional, and cohesive.

Founding Strategy Lessons for Today’s Founder

My favourite part of this blog - The lessons we can use today! Coco Chanel didn’t just start a brand - she built an empire from values, vision, and bold decisions. So for anyone who is looking to grow let’s break the Strategy of it down:

1.  Strategic Placement Matters: Where you launch your product shapes how it's perceived. Chanel chose The Ritz. You choose your niche. Your platform. Your presence.
   

2.  Know Your Consumer Persona: Coco wasn’t trying to appeal to everyone, neither should you. She spoke directly to her woman. There are 8 billion people in the world, you get to decide who your audience is.

   
   

3.  Define Your “Why’s” (My Personal favourite):Chanel’s designs reflected freedom. Power. Comfort. You need two Why’s - Why should your consumer buy from you? Why do you want to sell this? Both go hand in hand, if you cannot answer either - time to reflect.
   

4.  Differentiate with Integrity: Expansion isn’t about doing more -  it’s about doing what makes sense. Grow with your audience, not away from them.
   

In today’s landscape, we talk about audience-first brands, bold storytelling, and founder-led ecosystems. But Coco did this 100 years ago. That’s why she isn’t just a founder - she’s a strategist ahead of her time. There’s so much we can learn from her today. Chanel is one of those brands that has lessons and eras over years, one article can never do it justice so we will be back next week to see Chanel from the lens of the 90s and 2000s, Happy Strategizing!

The first known representation of N'5 - look how the dress, aesthetic and mood all align together - a new product but the soul of the brand is not lost! Source