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Summary A company must differentiate itself from others during the product life cycle by creating an image that demands attention and fosters unique brand awareness. Louis Louis Vuit Vuitto ton n is a comp compan any y that that cont continu inuou ousl sly y rejuv rejuven enat ates es itse itself lf and and has has maintained a highly coveted brand for 15 years. !onogrammed Louis Vuitton products are in such demand demand that it has spawned a multi"million multi"million dollar mar#et of of counterfeit products$ most commonly commonly referred to as %#noc#"offs.& %#noc#"offs.& 'he demand is so high for these #noc#"off products that LV!( !oet (ennessy$ owner of the brand$ has a special team that wor#s with international international police organi)ations. 'he LV logo has become an icon in the designer luggage$ handbags and accessories mar#et. 'he words Louis Vuitton are the code for describing an internationally recogni)ed
and
e*clusive
fashion
empire.
LVMH Target Market: - +t aims at the people who are aged between 1,"-5 and
love towards fine design$ and the taste for tradition and lu*ury$ Louis Vuitton has maint maintain ained ed its lead lead in fashi fashion on throug through h cleve cleverr adver advertis tising ing in maga maga)ine )ines s li#e li#e %Vogue& with print ads that focus on LV logo products as chic. +n recent years the company has e*panded its product line into ready"to"wear$ shoes$ watches and etc oncentr ntrat ating ing on its star brands brands which which have have the most LVMH's LVMH's strategy: strategy: - once growth potential.// 'he group/s most profitable brands include Louis Vuitton and hristian 0ior. !oet (ennessy Louis Vuitton LV!($ the world/s largest lu*ury goods company2$ owns famous lu*ury brands li#e 0om 3erignon$ hristian 0ior$ 0onna 4aran and Louis Vuitton. LV!( defines a brand/s identity by mining its history and finding the right designer to e*press it. LV!( believes in controlling quality and distribution and creating brand e*citement among customers with innovation$ which in its view is the ultimate driver of growth and profitability. hairman ernard Arnault believes that star brands are born when a company manag manages es to ma#e ma#e produc products ts that that /spea /spea# # to the ages/ ages/$$ yet remain remain intens intensely ely modern. modern. 'hese products products fulfil the consumer/s consumer/s fantasy. fantasy. A star brand is timeless timeless$$ modern$ fast growing and highly profitable. Arnault believes that the impression of timelessness can be created with uncompromising quality. •
Lvmh$ joint join t venture vent ure between bet ween giants gi ants
•
LV!( Sells 6bel
•
LV!( to focus on top brands
•
7egional usiness 8etwor#s and the !ultinational 7etail Sector
Strategic planning 9: Lvmh consists of the process of developing strategies to reach a defined objective. As LV!( labels a piece of planning ;strategic& A e*pect it to operate on the grand scale and to ta#e in ;the big picture; in contradistinction to ;tactical; planning$ which by definition has to focus more on the tactics of individual detailed activities2. •
;Long range; planning typically projects current activities and programs into a revised view of the e*ternal world$ thereby describing results that will most li#ely occur whether the planner wants them or not<2
;Strategic; planning tries to ;create; more desirable future results by (a) influencing the outside world or (b) Adapting current programs and actions so as to have more favourable
outcomes in the e*ternal environment.
+nvestment Strategy=">rowth investing is a style of investment strategy. 'hose who follow this style$ #nown as growth investors$ invest in companies that e*hibit signs of above"average growth$ even if the share price appears e*pensive in terms of metrics such as price"to"earning or price"to"boo# ratios. +n
typical usage$ the term ;growth investing; contrasts with the strategy #nown as value investing. (owever$ some notable investors such as A #new that there is no theoretical difference between the concepts of value and growth when considering ;>rowth and Value +nvesting are joined at the hip;2. +ndeed$ when just investing in one style of stoc#s$ diversification could be negatively impacted. 'he ?ine @ Spirits unit of LV!($ a world leader in lu*ury$ includes five (ouses of hampagne and ognac$ all of them world famous brands= 0om 3rignon$ !oBCt @ handon$ Veuve licquot 3onsardin$ (ennessy$ 7uinart and 4rug. (istorically$ the houses had been fiercely competitive. 8ow that they were all under the LV!( >roup umbrella$ the parent company needed to find a way to ma#e them wor# in a harmoni)ed way with their clients. !oBt (ennessy !(2 objectivesDunderpinned by harmoni)ation$ simplification and innovationDwere to improve the processes and +' solutions of its houses with immense scope included. Supply hain planning lin#ed to forecast and distribution replenishment for subsidiaries and wholesalers$ 3roduction and Euality
!anagement$
!aintenance$
3urchasing$
:inance
and
7eporting$
'raceability and 3roduct Lifecycle !anagement. About LV!( LV!( !oet (ennessy Louis Vuitton is the world/s leading lu*ury products group. LV!(/s ?atch @ Fewelry division comprises 'A> (euer$ 6bel$ haumet$ Genith$ :red$ as well as 9mas$ the prestigious +talian writing instruments company. 'he >roup is represented in ?ines and Spirits by a portfolio of brands that includes !oet @ handon$ 0om 3erignon$ Veuve licquot 3onsardin$ 4rug$ 3ommery$ anard"0uchene$ !ercier$ 7uinart$ hateau d/Hquem$ handon$ (ennessy and (ine. LV!( is present in the 3erfumes and osmetics sector with 3arfums hristian 0ior$ >uerlain$ >ivenchy and 4en)o$ and has recently acquired si* promising cosmetic companies$ liss$ (ard andy$ ene:it osmetics$ Irban 0ecay$ !a#e Ip :or 6ver and :resh. +ts :ashion @ Leather >oods division includes Louis Vuitton$ the world/s leading lu*ury brand$ as well as eline$ Loewe$ 4en)o$ >ivenchy$ hristian Lacroi*$ 'homas 3in#$ :endi and 3ucci. +n addition$ LV!( recently finali)ed the acquisition of 0onna 4aran$ the legendary American brand.
LV!( is active in selective retailing through 0:S$ !iami ruiseline$ Sephora$ Le on !arche and La Samaritaine. 3hillips$ one of the world/s largest auction houses$ which has recently teamed up with L/6tude 'ajan and >eneva art dealer de 3ury @ Lu*embourg Art$ also belongs to the LV!( >roup. onnaissance des Arts and Art @ Auction !aga)ine$ two speciali)ed publications$ also recently joined the >roup. +n J LV!( also launched eLIKI7H$ the authoritative online source for lu*ury goods on the +nternet. LV!( shares LV!(.3A2 are listed on the 3aris Stoc# 6*change and 8AS0AE in the Inited States LV!(H2 LV!( !oet (ennessy Louis Vuitton SA " :inancial and Strategic Analysis hallenge
statement=
%0espite worldwide softness in the sale of lu*ury goods$ LV!( has cemented its position as the worlds largest and most profitable player in the category. 'o stay there it must #eep its customers loyal and its brand strong and find new mar#ets worldwide& (a)lett . JM2. 'hat is why in its mission they state to represent the most refined qualities of ?estern % art de vivre& all around the world. 'heir objective is to be the leader in the lu*ury mar#et$ continuing to transmit elegance and creativity. 'his poses some major challenges$ the main one is to #eep being the leader in the lu*ury mar#et through a sustainable growth. 'he main problem to achieve it is the high dependency on three main countries$ :rance$ Fapan and ISA. 'his becomes a threat because if there is an economic downturn
in
one
country
it
affects
LV!(
directly
that
is
why.
LV!( founds itself in a stable financial situation. eing positioned as the mar#et leader they have better financial results than the rest of the competitors. Although the sales results for JM were under the industrys average the overall performance over the last 5 years was -N higher then the industry. +t is important to note that the major owner of the companys capital is present 69 ernard Arnault with MO.5JN of the control of the company with PMN of voting rights. 'his may have an +mportant impact in the overall performance and operating
decision
ta#en
in
the
company.
>lobal !ar#ets 0irect$ the leading business information provider$ presents an in" depth business$ strategic and financial analysis of LV!( !oet (ennessy Louis
Vuitton SA. 'he report provides a comprehensive insight into the company$ including business structure and operations$ e*ecutive biographies and #ey competitors. 'he hallmar# of the report is the detailed strategic analysis and >lobal
!ar#ets
0irects
views
on
the
company.
Scope •
'he companys strengths and wea#nesses and areas of development or decline are analy)ed. :inancial$ strategic and operational factors are considered.
•
'he opportunities open to the company are considered and its growth potential assessed. ompetitive or technological threats are highlighted.
•
'he report contains critical company information " business structure and operations$ the company history$ major products and services$ #ey competitors$ #ey employees and e*ecutive biographies$ different locations and important subsidiaries.
•
+t provides detailed financial ratios for the past five years as well as interim ratios for the last four quarters.
•
:inancial ratios include profitability$ margins and returns$ liquidity and leverage$ financial position and efficiency ratios.
7easons to buy •
•
A quic# %one"stop"shop& to understand the company. 6nhance businessQsales activities by understanding customers businesses better.
•
>et detailed information and financial @ strategic analysis on companies operating in your industry.
•
+dentify prospective partners and suppliers " with #ey data on their businesses and locations.
•
apitali)e
on
competitors
wea#nesses
and
target
the
mar#et
opportunities available to them. •
ompare your companys financial trends with those of your peers Q competitors.
•
Scout for potential acquisition targets$ with detailed insight into the companies strategic$ financial and operational performance.
LV!(s
0iversification
Strategy
into
Lu*ury
>oods
'he problem y JJ$ !oet (ennessy Louis Vuitton was the worlds largest lu*ury products company$ enjoying annual sales of 1J.J billion euros. LV!( carries the most prestigious brand names in wine$ champagne$ fashion$ jewelry$ and perfume. Ipon entrance of this lu*ury product industry$ LV!( was aware that they produced products that nobody needed$ but that were desired by millions across the world. 'his desire in some way fulfills a fantasy$ ma#ing consumers feel as though they must buy it$ or else they will not be in the moment$ and thus will be left
behind.
'he LV!( business portfolio began to ta#e shape in 1R,O with the merger between Louis Vuitton and !oet (ennessy which was a four billion dollar merger. 9ver the course of time$ LV!( has acquired over 5 lu*ury brands$ such as 0onna 4aren$ :endi$ and Sephora. 'hey called it$ %a collection of star brands and rising stars.& LV!( found this industry to be timeless and modern$ highly profitable$
and
very
rapid
growing.
0espite all of the above mentioned$ LV!( did e*perience some bumpy times. Some of these times were induced through internal problems$ while others were caused by e*ternalities$ li#e Sept. 11. ?ith such a wide range of product offerings$ LV!( was on top of the industry in certain aspects$ but has room for growth
in
other
areas.
After the case and readings the problems of LV!( there are several problems such as the declining demand for lu*ury goods because it is lin#ed to political events$ situation and social trends. After the attac#s of RQ11 an impact on lu*ury goods has dropped and had automatically an impact on LV!( sales2 Secondly lu*ury products are easy to counterfeit$ some countries such as china$ tur#ey$
and
other
still
have
to
improve
their
+37
policies
and finally LV!( diversification strategy ernard Arnault2 is ma#ing acquisitions outside the companys sector. +n sector where they dont have the %#now"how& and dont match the company +mage. 'he current 69 Arnault ernard2 is also the major shareholder which ma#es him easier to ma#e decisions on new
acquisitions 'he
swot
analysis
Strength=
8ame recognition which ma#es them the largest product mar#etplace
'heir
Leading
position
Euality
provider
0istribution
3ublic
e*perience
during
the
time
7elation
?ea#nesses
'heir
0iversification
onflict
:orward
Lu*ury goods are easy to imitate. 3erfumes$ Louis Vuitton bagsT2
:inance
0eclining
of
interest
fashion
and problems=
net
vs.
wine
and
bac#ward sales
decreased
by
spirits2 integration
nearly
PN
in
Jshares
9pportunities
!erger
and
acquisition
onsumer
urrent
6merging
+mprovement of way of selling their large product line distribution channels2
