1)How attractive is the Indian market for LV? Are there any first-mover advantages or dis-advantages? •Political Arena: No danger about any political or military upheaval that will change the nation’s economic rules and regulations, threat of terrorism, expropriation or repatriation restrictions were mentioned in the case. Only concern s is that the high tariffs are increasing prices and no foreign direct investment in a retailing venture was allowed. •Environment factors: The socio-cultural, economic and regulatory environment was favorable. Demographics was appealing and the infrastructure was growing with luxury malls developing in India. Government was also loosening regulations. •Market size: The luxury products market was estimated to be $444m and growing at 20% annually. •Market growth: India recorded the world’s second fastest growth in the number of high –net-worth individuals 19.3% in 2005. Families with annual incomes over INR100m, high-net-worth consumers, and cocooners were expected to grow. •Competitive intensity: LV was the first of its type in the market. No competition exists as the moment.
•First mover advantages and disadvantages: With consumers becoming more affluent, LV being the leader in the market it can build a loyal customer base and secure positive image and higher brand recognition, secure more distribution, and have an upper-hand over competition through longer market experience. Disadvantages are that, it would need to engage in customer education, work through government regulations, and need to create the retail / distribution clusters that would create a foundation for followers to easily establish business.
2)Pros/ cons of stores in the luxury malls vs. luxury hotels? Luxury Malls:
•An advantage of opening a store in luxury mall is that it attracts a larger pool of people which helps build brand awareness and market share. Restaurants, the variety of stores as well as the presence of other luxury brand...