Q. What distinctive resources and capabilities has LVMH developed or acquired that distinguish it from its competitors? What is its competitive advantage? What is the key to the corporation’s success?
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: * Wines and spirits
* Perfumes and cosmetics
* Fashion and leather goods
* Watches and Jewelry
* Selective retailing
LVMH manages a large portfolio but ensures that there is consistency and coherence amongst the marketing of each of these brands. Even though there is a vast diversification in the range of products, LVMH takes a lot of pain to integrate each of these businesses into the parent brand.
The group has experienced a relatively remarkable growth rate over the years. One of the key elements that allowed this uninterrupted growth has been the strategic acquisitions with an equally strong focus on organic growth. LVMH has stressed on the importance of quality and creating a heritage brand by facilitating innovation in each independent brand as the driver of its growth and profitability.
The vision of Chairman Bernard Arnault is to create timeless star brands with a focus on innovation and quality. He also stresses on how each brand must stay independent. Each brand must prove itself and even new products under each brand also do not leverage itself on the parent company or the parent brand – each product line must prove itself. This also covers the risk of a weak brand passing on its negative influences to the parent brand and ruining its reputation. He also leaves each designer with the freedom to innovate and only gives his comments at times which are also not necessarily imposed as the last word is of the designer. To cover the risk, they are willing to launch only thousands of units of a new collection even if...
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