Luis Vuiton Case

Topics: LVMH, Luxury good, Brand Pages: 15 (4872 words) Published: April 15, 2013
Cover page

Project no. 1Project title: LOUIS VUITTON

Class and group/team number:CLmec-y13f, GROUP 2

Group members:
Adeniyi Tajudeen Babatunde
Carlo Guerra
Madalina Manole
Hristo Novakov

Date: 14/03/2013

Number of characters (including spaces, footnotes, end notes and text boxes): 23,921

Signatures of all the participating group/team members:

__________________________________________________________

__________________________________________________________

Contents
1.Introduction2
1.1 Motivation2
1.3 Interpretation3
1.4 Scope3
1.5 Methodology3
2.Porter’s 5 forces analysis3
2.1 Industry analysis3
2.2 Competitive rivalry5
2.3 New entrants5
2.4 Substitutes6
2.5 Power of buyers6
3.Marketing Mix: the 4 Ps7
3.1 Product7
3.2 Price9
3.3 Place9
3.4 Promotion10
4.Discussion10
5.Recommendations12
6.Conclusion13

1. Introduction
1.1 Motivation
LV(Louis Vuitton) is a world-wide famous company producing luxury leather items, such as handbags, trunks, shoes and accessories, but also watches, jewelry and sunglasses. Nowadays' powerful LV is the result of the efforts of a genial initiator – Louis Vuitton himself, who introduced flat-topped, stackable trunks and an impressive number of original designs – and an acute business man – Bernard Arnault, who took over the company with a cunning strategy, revolutionized the high levels of management and then acquired competitors, famous brands to expand LV's activity, and distributors to keep firm control of the brand identity. LV is today a standard, one of the per excellence suppliers of exclusive luxury products for the absolute, aspirational and accessible segments of customers. Its growth has been steady for decades, and more is to be expected as the market itself is reported to be growing continuously. Yet some signs of weakness have been spotted already: since 2005, a general plan designed to improve efficiency has been implemented. While the introduction of automation in the manufacturing process allowed to increase efficiency by 5 per cent per year, it could undermine the appeal of the brand to the high demanding target customer segments. LV's value lies in unique products, designed and handcrafted by artisans.

1.2 Research question and subquestions
Which chances does LV have to gain market share in the reported situation? How can it avoid losing profits, and be able to produce enough to meet the demand for luxury leather items while keeping its identity as exclusive brand at the same time?

Sub questions:
* What is LV’s position in the industry?
* What values make its brand valuable to the customers?
* How is LV working to defend its brand?

This analysis is of critical importance for the company as it might put light on a major weakness, which might in the end drastically reduce LV’s power in the industry.

1.3 Interpretation
By LV we refer to the main leather products manufacturing company, including the brand of the same name's, but not the Louis Vuitton Moët Hennessy holding.

By gain market share we intend any variation of positive sign in market share, in percentage.

By enough to meet the demand we mean an increase in production sufficient to reduce uncovered demand in the market of at least 20% in the next two years.

1.4 Scope
Our analysis covers the global market of Louis Vuitton, without geographic delimitation even though this puts limits to the depth the analysis can reach. In the same way, all of the customer segments are accounted for.

We analyze the luxury leather products industry, by far the leading products of LV. Although this implies a less comprehensive overview, we consider it a convenient limitation, as the other products follow the same patterns and basically satisfy the same needs.

1.5 Methodology
In order to reach a good level of knowledge of the presented problem, the industry is analyzed first, by...

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Christina Passariello (2011): “At Vuitton, Growth in Small Batches”
Fondazione Altagamma (2012): „Worldwide Luxury Markets Monitor . Spring 2012 Update”. http://www.altagamma.it/img/sezione3/files/397_975_file.pdf
Gladwell, Malcom (2002): “The Tipping Point: How Little Things Can Make a Big Difference”
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[ 19 ]. Business Week (2011): “Vuitton sees growth tied to invitation luxury salon retails” www.businessweek.com/news/2011-11-16/Vuitton-sees-growth-tied-to-invitation-luxury-salon-retail.html
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[ 23 ]. Dominion Fund Management Limited (2013)
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[ 25 ]. Mahbubani, Manu and Crossan, Mary (2013). Ibid.
[ 28 ]. Doreen Carvajal (July 1, 2008): “EBay Ordered to Pay $61 Million in Sale of Counterfeit Goods”, in New York Times. http://www.nytimes.com/2008/07/01/technology/01ebay.html?_r=0
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[ 30 ]. The Canadian Press (2011): “Three companies fined $2.5M for fake hand bags”, in British Columbia – CBC News, http://www.cbc.ca/news/canada/british-columbia/story/2011/06/29/bc-fake-louis-vuitton-burberry.html
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[ 32 ]. Christina Passariello (2011): “At Vuitton, Growth in Small Batches”. In The Wall Street Journal. http://online.wsj.com/article/SB10001424052702303627104576409813842858304.html
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[ 34 ]. Mahbubani, Manu and Crossan, Mary (2013). 7
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