Lvmh Marketing Case

Topics: LVMH, Gucci, Luxury good Pages: 28 (6963 words) Published: January 12, 2011
DE TERNAY Anastasia MORAR Crina XIA Xiaou ZERMANI Sihem

Master 2 CPEI

LVMH: Strategic Integration and Expanding Brand Dominance in Asia

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http://fashionrules.com/wp-content/uploads/2009/03/lvmh.gif

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Table of contents
INTRODUCTION……………………………….…………………………………......…3 I. LVMH and its environment ……...…………………………..……….………………..3 A. The luxury market and it segmentation……………………...………….………………3 1. Analysis of the luxury market: « The luxury-goods industry »…..………………...3 2. Segmentation……………………………………...…...….…………………......….4

B. LVMH presentation…………………………………...…...….……………………….….5 1. General presentation………………………………...…...….…………………...….5

2. The Geographic Position in Sales………………...…...….…………………...…….6 C. LVMH analysis…………………………………………………………………………....6 1. Company SWOT……………………………………………………………………7 2. SWOT per sector……………………………………………………………………9 3. Key Success Factors for LVMH………………………………………………..….13 4. Competitors……………………………………………………………………..…14

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LVMH strategic integration.………………………………………………………….15 A.The logic of métiers…………………………………………………………..………….15 B.Optimization of synergies….……………………………………………………………18

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Marketing program: how to double profits within 5 years……………………20 A. General recommendations on strategic sectors………………………………………20 B. The Asian market…………………………………….. ………………………...……21 1. Challenges and opportunities…………………………….......................................21 2. Recommendations in the process of expansion in Asia...........................................22

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Introduction
LVMH, the world leader on the market of luxury products Group was created in 1987 and results from the merger of Louis Vuitton (an upscale luggage company) and Moët Hennessy ( 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 '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 middleclass are synonymous with a market share that LVMH intends to capture. After a brief analysis of the luxury-goods industry and its segmentation, we will present the company. After that we will expound the LVMH strategic integration: how LVMH could optimize its corporate structure and thereby satisfy its constant desire to generate profit? At the end of our presentation we will suggest our recommendations on strategic sectors and we will explain why LVMH has to focus on Asian market to guarantee its future growth?

I) LVMH and its Environment
A. The Luxury Market and its Segmentation
1) Analysis of the luxury market: « The Luxury-goods Industry »  The luxury-goods industry has known four different phases since the 19th century: - The elitist industry (19th to mid-20th century) emerged during the Industrial Revolution when major entrepreneurs created exceptional products, reflecting the elitist lifestyle of that time. As business grew more and more important, the reputation for exceptional quality evolved in well-established brands. The customer base became broader as the elites of the world became larger and more diverse. - The Democratization of Luxury (1970s and 1980s): The expansion of product offer, growth of the distribution network, a boom in travel, the introduction of affordable products and the greater exposure of luxury brands drove the democratization of luxury. -Industry Consolidation and the Luxury Bubble (1990s): The prosperity of the US economy, the exuberance in the financial markets and the consolidation of the South East Asian and Japanese markets boosted cash flows. The need to maintain high returns on...
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