LVMH has a strong brand positioning meaning that the company strongly placed itself as a leader in the luxury sector. The company offers more than 60 brands of high value perception and identity to their customers. Due to high customer loyalty, image of their brands and value perception those brands are less affected by economic cycles. Most evidently, LVMH expressed resilience against the economic conditions specifically in 2009 and 2008. This is an indicator that the strength of their brands enables their revenues to sustain growth even through touch economic situations. This is due to their huge customer base across the globe accompanied by their loyalty; thus, making their penetration to new markets with quick.
The associations of LVMH with celebrities and major events have enabled them to enhance their luxury positioning. For example, Charlize Theron represents the J’adore perfume by Dior, while Moet & Chandon positioned their communications platform to events like the Oscars and the Golden Globe. Those marketing strategies were aimed in order to increase their brand visibility and recall. Moreover, their customers are targeted successfully through enhancing their brands images. All in all, those associations would eventually augment the luxury and its value that LVMH aims at building.
A shortcoming in LVMH’s company is their limited presence in the retail division. This means that the company is highly dependant on sales to retailers. This in turn has caused the company’s luxury goods vulnerable to destocking by their retailers in order to avoid losses. Most evidently, the wines, jewelry, and watches departments were highly affected negatively by the retailers destocking. Therefore, this has made LVMH’s revenues in danger of destocking made by retailers.
There is also a weakness evident in the conflict of interest within the company, where LVMH would be categorized into two major segments: fashion vs. liquor markets.... [continues]
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