External Analysis

Topics: LVMH, Luxury good, Gucci Pages: 4 (1166 words) Published: June 14, 2013
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.
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