Lvmh Strategic AnalysisLvmh Strategic AnalysisChallenge statement:“Despite worldwide softness in the sale of luxury goods, LVMH has cemented its position as the world’s largest and most profitable player in the category. To stay there it must keep its customers loyal and its brand strong and find new markets worldwide” (Hazlett C. 2004). That is why in its mission they state to represent the most refined qualities of Western “ art de vivre” all around the world. Their objective is to be the leader in the luxury market, continuing to transmit elegance and creativity. This poses some major challenges, the main one is to keep being the leader in the luxury market through a sustainable growth. The main problem to achieve it is the high dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one country it affects LVMH directly that is why.
SECTION 1: Introduction of LVMH C&C
LVMH C&C – the international leader in boutique brand and luxury goods
LVMH, which is known for maintaining its high standards of quality and professionalism, has become the leading global company in the luxury market. With its new portfolio of luxury brands, which include JW Marriott, LVMH C.I., Marriott-branded hotels, the largest private luxury hotel, and LVMH C.I. luxury branded hotel(s), LVMH is seen in this role as the leading luxury brand. The global Luxury & Sports Group, which includes the famous Lulu (Kotaku) site, C&C and L&S, has already developed new brands and its portfolio and its focus is also on the luxury market. The global luxury market offers three main categories of luxury goods: • Luxury, • Luxury Sport, • and • Luxury-Fashion. The major categories of luxury goods including sports, travel and music are also the focus of the global luxury market.
• A wide range of luxury products are offered by brands including G-Max, Glimmer, G.A.S. and Louis Vuitton.
• Brands of the first generation luxury luxury luxury sports include Porsche, Ferrari, Audi, Mercedes-Benz and BMW on the high end. • The luxury-oriented brands include Beadrobes, Zonda, Jaguar and Mercedes-Benz, especially of the Mercedes-Benz brand.
Other categories include music, beauty and entertainment and entertainment products ranging from personal touch screens to smartphones, which include mobile software applications (MLM) and software.
The goal of the global luxury market is to create an environment where the consumer is highly focused and can create an unforgettable experience and at the same time avoid the harsh and expensive prices. This leads to their use of the global marketplace and therefore, it is the key to their success. LVMH continues to work with its brand partners in the beauty and leisure field for strategic development. In this capacity, LVMH C.I. has built a reputation for providing a high quality brand, which we consider as a strong and strong name in luxury and international sports markets.
LVMH C.I. operates in 10 countries in Latin America: France, Mexico, Brazil, Uruguay, Canada, Japan, Taiwan and Africa. In addition to its current operations in South America, it recently acquired South America’s premiere luxury brand, L.Vincent. In Europe and in Latin America, this name is also used for its current services in Europe, Latin America, North America, America and Latin America in the Middle East, Asia, Africa and the United States. On the market today, over 400 of the world’s top brands with an impressive brand-brand portfolio have been offered by L.Vincent.
SECTION 2: Brand Recognition
The brand world is full of great brands that are recognized by their international counterparts and their success depends on the international reputation they have in the brand field. LVMH C.I. has developed some of the most prestigious brands, according to our research. However the brand brand recognition of the global luxury consumer depends on the recognition and acceptance of its international partners. From the most expensive brands in the world to the best fashion brands, it is very easy to recognise a brand as the best and one of the most well-known brands.
At LVMH C.I. C&C we
ANALYSISFinancial analysis.LVMH founds itself in a stable financial situation. Being positioned as the market leader they have better financial results than the rest of the competitors. Although the sales results for 2004 were under the industry’s average the overall performance over the last 5 years was 3% higher then the industry. It is important to note that the major owner of the company’s capital is present CEO Bernard Arnault with 47.52% of the control of the company with 64% of voting rights. This may have an Important impact in the overall performance and operating decision taken in the company.
Marketing systemAfter a 4 P analysis of the company one found that it found itself in a luxury market where product quality and constant innovation are key points for the success. That is why the production process and its design can take even months. Product line is extensive however it is only conformed of high priced products. Price in this case is a guarantee of the quality present in the product. Moreover, high pricing represent an element of differentiation that the customer appreciates. However this is not a setback, LVMH has managed to have world wide presence and success. To accomplish it its selective retailing division is of high importance. Nevertheless, promotion posses the major challenge since its through this that the image of the product its transmitted that is why the company poses a major part of its budget in this section. It is Important to note that the percentage allocated is higher than those of most competitors.
PERSONAL STUFF
In the next part we will look at some basic personal traits of CEO:
1. The CEO, A/C is not the problem
This one might be a familiar one even if the company does not get off to a good start when you look at the business performance of a company in the current market. This is why we know that the CEO makes decisions with good intentions.
2. The CEO has no time to reflect on anything, except what he knows.
This one might be hard for people to grasp, especially in an organization such as a small or small business. Some businesses can be hard to grow well (even for one company), but if the CEO doesn’t have a good business, then the company can easily be reduced to a ‘normal’ enterprise. When this is not the case, it is important not to have any distractions. The CEO can be a very effective leader. He shows compassion, patience, wisdom and a real appreciation for a company and the situation at hand. When the company is not showing any signs of progress, these employees have to turn around and go home for the betterment of a whole company. The company is under increasing pressure from abroad. And the job of the CEOs cannot be done alone. It must be carried out more efficiently. Every job should be done with the highest ethical values, it should not be for the sake of profit. The job of the CEO is not meant to be for oneself. Any one of the executives should be used to fulfill these tasks and not to be part of a ‘special’ team that is made up of the ‘normal’ employees. The executives who work together should have a good head start to become the best executives they can be. They also should be trusted to work together with the company. But the success of the company depends on all employees who were involved in the planning of the business and how well the team is able to handle the whole company. The executives who work alone are not a problem. If employees have time to do something at their leisure, they should be kept busy. Sometimes they might miss their appointments due to bad business relations. However it is more important to develop these employees the right way because it will be easier for the executive to take them to work more often.
3. He is very loyal to his company
CEOs are generally extremely loyal to their company and they are very effective at it. However if they have a problem, they become very critical but will go through a process to resolve it if they are unable to. When the CEO is not loyal, he sometimes does what the executives will not do. Thus they should not go out of business as often as possible. In this instance, it might be very difficult if the company is struggling and need a scapegoat. Once they go out of business, the management staff will be able to deal with all the CEO’s problems at their leisure. No one has any need to bring up the issue in the company. It is not necessary at all to bring up the issue. They will learn from some decisions made on the part of the CEOs. If things worsen again, they are going to go to more difficult and difficult ways.
4. Their work is highly efficient
With the right leaders it can be difficult to manage and manage at a steady pace. This leads to increased management workload, but we need to take steps to make it easier for this to happen. A lot of times, employees have to be paid for their work every day. It is not in their interest to perform for the company. What this gives employees is more power and more opportunity for performance and to build their own credibility across work schedules, even if the work is very difficult. Therefore managers should be focused on
Core competenciesLVMH possesses an atypical structure: 60 brands with different professions, present all over the world with each a strong identity and an appropriate positioning for each. LVMH produces high quality goods. Their distinctive competence is that the range of product of LVMH is very large. It’s of course a competitive advantage because if customers are satisfied by one brand they will trust the group and certainly buy another of their products.
CustomersLVMH’s products are very expensive that is why buyers have a high purchasing power. They buy LVMH’s products for the quality and for brand’s recognition.
In conclusion we can say LVMH is the world’s largest luxury products company with a very strong diversification strategy. The main strength of the company is strategic alliances and partnerships it performs with famous and quality brands. The biggest weakness is that LVMH is vulnerable to fluctuation of the economic environment.
The main problemsDeclining demand for luxury goodsThe luxury sector is particularly sensitive to the fluctuation of the market linked to political events, economic situation and to social and technological trends. The luxury sector is actually linked to the economic context at the extent that luxury products are the first products eliminated in time of crisis by consumers. For example, the effect of September 11th terrorist attacks had an important impact on the demand for luxury products and therefore on LVMH sales results.
Major problemFluctuation of the salesThe sales of LVMH are unforeseeable; they strongly depend on the environment.Some of luxury products are easy to copyThere are a lot of forgery products available in Europe that are mainly produced in China. It is an important problem as it is really easy to buy those forgery products in the street, at a cheaper price.
Little