LOUIS VUITTON MOËT HENNESSY:
EXPANDING BRAND DOMINANCE IN ASIA
Asia Case Research Centre (University of Hong Kong)
October 14th, 2004
Louis Vuitton Moët Hennessy Group, the world leader on the market of luxury products, was created in 1987 and resulted from the merger of Louis Vuitton (an upscale luggage company) and Moët Hennessy (pppsdcnmzxan upscale producer of champagne and cognac). Since its creation, LVMH has made changes to its structure and in 1997 LVMH started creating business branches around the different métiers of the Group by combining apparently disparate businesses and synergies between the sectors. By changing its corporate structure, LVMH greatly improved its sales and profit, which strengthened LVMH’s dominance in the world luxury goods industry relative to its large competitors. LVMH has successfully conquered European and US markets, and is determined to capture the growing Asian market, the size of whose population and the income of whose middle-class are synonymous with a market share that LVMH intends to capture. Yigang Pan, a renowned analyst, wrote this text while she was head of research at the University of Hong Kong. I decided to explore this particular text due to the fact that I am intrigued by how western luxury became such a phenomenon in Asia. The sheer size of the Asian market makes it a very interesting one, but fully entering it will not be easy for any brand. In this expository text, I will give some insight of how LVMH has been doing it. After a brief analysis of the luxury-goods industry and its segmentation, I will present the company. Afterwards, I will go through the LVMH strategic integration: how LVMH has optimized its corporate structure and thereby satisfied its constant desire to generate profit, and also why LVMH decided to focus on Asian market to guarantee its future growth. Since its inception in 1987, the LVMH had a great vision in mind. It held the great prestige of its...
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