LOUIS VUITTON enter CHINESE MARKET

Topics: LVMH, Luxury good, Luxury vehicle Pages: 12 (3930 words) Published: April 13, 2014
Summary

Luxury product sales boost in the emerging marketing like China, which has extraordinary growth and strong potential consumers for the development of luxury goods in the China market. With gradually lower and lower increase of revenue in the European countries, Louis Vuitton (abridged as LV in the following sections) commits itself to set up more stores in China. However, LV is faced with the problems of declining profits in China, which urges it to adjust its entry strategy into the China market. In this case, this report will focus on distinguishing the factors that influence LV’s development in China and laying out schemes for LV’s entry into China market by initially examining the internal and external environment for LV; analyzing the operational plan for LV’s entry into China based on the environment examination, and generating an action plan for LV’s entry strategy at the end of the report.

Introduction
Louis Vuitton (abridged as LV in the following sections) is planning to set up more stores in the China market. However, it is now faced with the problems of declining profits in China, which urges it to adjust its entry strategy into the China market. In this case, this report is to lay out schemes for LV’s entry into the China market by distinguishing the internal and external factors that influence LV’s development from the perspectives of country factors and internal advantages of LV with reference to the SWOT analysis model; analyzing the operational plan for LV’s entry into China based on the environment examination and including suggests on firm strategy, organization structure and management, entry strategy and modes, manufacturing management, marketing plan, and accounting as well as finance management; and generating an action plan for LV’s entry strategy at the end of the report according to the specifications of the business operational plan. 

Research Methods 
The research method of literature searches is adopted to generate this report. This method is chosen because there are plenty of existing studies on the development of luxury goods, which makes it possible for abundant literature searches. Also, there are a great many resources on the annual reports of Louis Vuitton available which offer insights into the financial performance of this company. Anyway, luxury goods are indeed possessed by the majority of people, which makes direct interviews or surveys less available. 

External and Internal Environment 
The internal and external factors that influence LV’s development will be examined in this section from the perspectives of country factors and internal advantages of LV. A SWOT analysis will be involved in this section, which aims to find out the strength, weakness, opportunity and threat of the company according to analysis on the internal conditions of the company and the external environment the company is faced with (Johnson & Scholes, 2002, p122). External environment: Country factor analysis 

The external environment for LV’s entry into China will be discussed in terms of the politics and government policy of China, the economy and the China market, the social culture and transportation of China, and will be concluded from the perspectives of opportunities and threats for LV’s entry into China.  In terms of politics and government policy, China is now actively opening up to the world and enhancing trade relationships with world brands since the reform and opening up policy.  In terms of the economy and the China market, according to Yuval and Vinay and Cathy (2011), the analysts of Mckinsey quarterly, China has increasing booming urban cities including the second- and third-tier cities and the world second-largest GDP which means strong purchasing power the China consumers for luxury goods and great market potentials (para 8). They also pointed out that by 2015, Chinese consumers will account for more than 20 percent of the global luxury market. On the other hand, the...

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