Preview

External Analysis

Powerful Essays
Open Document
Open Document
1166 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
External Analysis
LVMH – Fashion & Leather Goods
External Analysis
Faurum Doshi

LVMH Summary
LVMH, known as Moët Hennessy • Louis Vuitton, is a French conglomerate and the largest producer of luxury goods in the world. LVMH was formed in 1987 with the merger of Moet et Chandon a champagne manufacturer, Hennessy a cognac manufacturer, and Louis Vuitton a fashion house.
The LVMH group is comprised over five sectors: Fashion & Leather Goods, Wine & Spirits, Perfumes & Cosmetics, Watches & Jewelry, and Selective retailing. This external analysis will focus on the fashion and leather goods sector, which accounts for 30% of the company’s total revenue. Analytical Tools
To grasp a better understanding of the fashion and leather goods industry, this analysis will use the PESTEL and Michael Porter’s five forces methods to assess the external opportunities and threats.
PESTEL is an effective analytical tool to determine the social and economical trends at a macro-level. Comprehending these factors can assist a company with its business strategies and vision. Porter’s five forces is a great tool when rivalry is so intense. It defines the competitive intensity and overall industry profitability.
Louis Vuitton, Fendi, Loewe, Marc Jacobs, Donna Karen, Celine, Thomas Pink, and Givenchy are few popular brands that form the fashion and leather goods sector of LVMH. These brands have a total of 1,280 stores worldwide. “The development of our fashion and leather goods brands is based on three inseparable principles: leading edge expertise, constantly cultivated creativity, and a search for excellence in distribution. (www.lvmh.com).” With LVMH’s major strategic priorities to continue developing Louis Vuitton, strengthening brand image, and projecting profitable growth of the other fashion brands, it is critical to understand the external factors that may affect them.
Louis Vuitton had another year of double-digit revenue growth. The Fashion and leather goods


Bibliography: IBISWorld. (2013). Handbag, Luggage & Accessory Stores. IBISWorld. Rothaermel F., (2012), Strategic Management, Georgia Institute of Technology. http://www.lvmh.com/investor-relations/lvmh-at-a-glance/activities?index=1 http://www.interbrand.com/en/best-global-brands/2012/LouisVuitton http://academic.mintel.com.lib.pepperdine.edu/display/634493/?highlight=true#hit1
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Analysis Of Louis Vuitton Moet Hennessy's Corporate Controversy
    • 339 Words
    • 2 Pages

    Analysis Of Louis Vuitton Moet Hennessy's Corporate Controversy

    The company has been submitting is communication on progress annual reports to the UN Global Compact as well but in the year 2010 due to secretly acquiring shares of its smaller rival, LVMH got involved in a legal battle with Hermes Paris. The legal fight lasted for four years and LVMH was found guilty of wrong doing in order to acquire the shares of its competitor. However, LVMH never admitted the accusations and claimed to be innocent. The financial market regulatory authority of France known as AMF launched and investigation into LVMH’s actions and penalized the company with $10.4 million fine, largest in the history of…

    • 339 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Rize Documentary
    • 528 Words
    • 3 Pages

    Rize Documentary

    In doing strategic analysis, it is sometimes useful to examine the industry in terms of Porter’s five forces (however, some industry characteristics critical to formulating strategy might not be apparent from this framework).…

    • 528 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Moet Hennessy Louis Vuitton
    • 392 Words
    • 2 Pages

    Moet Hennessy Louis Vuitton

    LVMH is a world leader in luxury with a portfolio of over 50 prestigious brands. Brands under the conglomerate (LVMH being the holding company) are synonymous with prestige and elegance and operate in the areas of:…

    • 392 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Polo Ralph Lauren Performance Measurement
    • 1640 Words
    • 7 Pages

    Polo Ralph Lauren Performance Measurement

    Industry Analysis – We used the Five Forces Model to assess the characteristics of the industry in which PRL competes in. The fashion industry is a very competitive one, rivalry among firms is high: some competitors are bigger than PRL, so they also have more resources, but still PRL is a pretty strong name and the company has a large customer base. The threat of new entrants is low because there are strong incumbents, brand loyalty in the high-price segment is high and access to suppliers and distributors is limited. Even though PRL has a high brand recognition which makes end customers less price sensitive, the bargaining power of the buyers is high as the direct customers of the firm are mainly large department stores (and the gist of the company’s revenues comes from the wholesale sector). The threat of substitutes is moderate as loyal customers tend to buy only from them but in general people may vary their purchases and also buy from the competitors. For what concerns the suppliers, it’s important to specify that PRL does not manufacture its products itself, but instead relies on licensees and other manufacturers to do so. Its suppliers are therefore manufacturers which supply the company with the finished goods. The bargaining power of suppliers is moderate: as the…

    • 1640 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Chanel History and Competitors
    • 536 Words
    • 3 Pages

    Chanel History and Competitors

    Connection with the Germans Fashion Oscar in 1957 Even after her death in 1971, she lives on as an icon to many in the fashion industry today. Chanel, post Coco…

    • 536 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Louis Vuitton Moet Hennessy Case
    • 6617 Words
    • 27 Pages

    Louis Vuitton Moet Hennessy Case

    Louis Vuitton Moet Hennessy, a luxury goods provider is looking to expand their brand dominance in Asia. In order to expand successfully LVMH must evaluate challenges that may arise and get in the way of their successful expansion. In the Asian market, LVMH must deal with political and cultural uncertainties, the threat of counterfeit products, and the increased cost of products in Asia compared to France.…

    • 6617 Words
    • 27 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    comparative analysis of Zara and Topshop
    • 488 Words
    • 2 Pages

    comparative analysis of Zara and Topshop

    As of the present, fashion industry market is growing and booming with the presence of low cost fashion companies such as Zara and Topshop. These kinds of companies have the possibility to dominate the industry of today and in the future and the situation for competition in the fashion industry can be set on high demand on such products and services. Zara is recognized as the most successful fashion retailer in the world and Topshop is also making its mark as one of the fashion’s major success stories. These two leading fashion retailers have their own unique business model and have made huge impact in the fashion market industry. Thus, the research topic would be interesting, as it would contribute to better understanding of how fashion industry works nowadays.…

    • 488 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Lvmh Case Study
    • 378 Words
    • 2 Pages

    Lvmh Case Study

    LVMH should focus more on economies of scope. In some cases like advertising it appears the conglomerate uses its size and power to reduce the cost to the individual companies; however I feel that the conglomerate could do much more to reduce costs and increase profits for the firms. They could be using their negotiating power to force suppliers into lower prices. They should encourage the individual companies to work together and provide ideas for each other this way they can strengthen relationships among the…

    • 378 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    Porter's Five Forces Analysis's Factors
    • 1495 Words
    • 6 Pages

    Porter's Five Forces Analysis's Factors

    Key Points:  After 30 years, the Five Forces Analysis is still one of the most effective ways to assess industry structure and performance when done correctly.  As the tool’s name states, there are five forces that together illuminate industry structure: Bargaining Power of Buyers, Bargaining Power of Suppliers, Barriers to Entry, Threat of Substitute Product or Services, and Rivalry Among Existing Competitors.  A recent update to the model is the addition of Complements, goods or services that impact the demand of the products/services provided by the industry under analysis. It is considered more of a factor than a force per the model creator. Main Thoughts: Where the PESTEL analysis is a general or macro environmental analysis tool, the Five Forces model is a means to assess the micro or industry environment. Developed by strategy professor Michael Porter of Harvard Business School in the early 1970s, the Five Forces model has become one of the most widely known strategy analysis tools in use today. The tool helps users identify—through detailed examination of each force—what the underlying drivers of industry behavior and performance are.…

    • 1495 Words
    • 6 Pages
    Better Essays
    Read More
  • Satisfactory Essays

    LVMH financial analysis
    • 790 Words
    • 4 Pages

    LVMH financial analysis

    LVMH is present in every single sector of luxury, not like other competing big groups…

    • 790 Words
    • 4 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Lvmh: Expanding Brand Dominace in Asia
    • 955 Words
    • 4 Pages

    Lvmh: Expanding Brand Dominace in Asia

    Brand insistence: Many targeting customers of the luxurious markets are stick to particular brands of LVMH. Their loyalties enhance LVMH to maintain a good profitability.…

    • 955 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Porter's five forces
    • 582 Words
    • 2 Pages

    Porter's five forces

    Porter have developed five forces, basically it is a framework to analyze the level of competition within an industry in order to develop a business strategy. The first force as what Porter defined is the threat of new entrants, which can eventually decrease the profitability for all firms in their particular industries. This happens whenever profitable markets yield high returns that can attract new firms. The second force is the threat of substitute products or services or products, this is all about the existence of new products outside the realm of the common product boundaries which increases the propensity of customers for them to switch to alternatives, the factors which can affect this are ease of substitution, switching costs and perceived level of product differentiation. The third one is bargaining power of customers, it is also described as the market of outputs, wherein, it is the abilities of every customers to put every firm under pressure, which also affects the customer’s sensitivity to changes. It is also sensitive in the sense that customers have the option to buy or not to buy. The fourth one is the bargaining power of suppliers, which can also be defined as the market of inputs. They are the one who provides for the firm’s raw materials, component, labor, and services. Suppliers have the option to refuse to work with the firm or charge excessively high prices for some particular resources. The last one is the intensity of competitive rivalry; this is about the strategies of a particular business in order to outwork its rival. It is about the competition on market shares, customers and most of all, profit.…

    • 582 Words
    • 2 Pages
    Good Essays
    Read More
  • Powerful Essays

    Marketing Strategy of Lv
    • 1801 Words
    • 8 Pages

    Marketing Strategy of Lv

    In the luxury sector, LVMH has invested in six different strategic business areas: wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewelry, selective distribution and other activities.…

    • 1801 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Best Essays

    Lvmh Marketing Case
    • 6963 Words
    • 28 Pages

    Lvmh Marketing Case

    LVMH, the world leader on the market of luxury products Group was created in 1987 and results from the merger of Louis Vuitton (an upscale luggage company) and Moët Hennessy ( producer of champagne and cognac). Since its creation LVMH has made changes to its structure and in 1997 LVMH started creating business branches around the different métiers of the Group by combining apparently disparate businesses and synergies between the sectors. By…

    • 6963 Words
    • 28 Pages
    Best Essays
    Read More
  • Powerful Essays

    British leisure time
    • 2976 Words
    • 9 Pages

    British leisure time

    H&M is a leading global fashion company, offering affordable and good quality fashion for women, men, teenagers and children around the world (H&M, 2014). To ensure the best price, H&M (2014) claims that they have no middlemen, buy right items in large volumes from the right market. Also, they have their own designers, pattern makers and buyers, and they work as teams to create the collections and make sure the collections are adapted to customers’ demands. According to H&M (2014), the first store was established in Västerås, Sweden in 1947 by Erling Persson. Moreover, Persson can came out this idea because of a business trip to America, during this trip he was introduced to the America’s high-volume efficient outfits that Barneys and Macy’s carried (Göransson et al, 2007). He brought this retail idea back to Sweden. After around sixty years development, today H&M has approximately 3,200 stores on five continents in 54 markets and about 116,000 employees worldwide (H&M, 2014). In addition, the online store is available in ten European countries and the USA (H&M, 2014). Finally, the overall turnover in 2013 was over SEK 150 billion including VAT, which increased by 9 percent in local currencies (H&M, 2014). Besides, according to Adbrands (n.d.), H&M’s majority international competitor is Inditex, owner of Zara, which is the world No.1 apparel company. Current competition also includes other fast fashion brands, for example, GAP, Topshop, Forever 21 (Lynn et al, 2009). Additional, since all the rivals have similar business concept, which offer affordable fashion, hence, the context for H&M is challenging.…

    • 2976 Words
    • 9 Pages
    Powerful Essays
    Read More

Related Topics