Management and Luxury Goods
LVMH, the Multi-Brand Conglomerate
Weakness: 1. Sustenance of multi brand strategy 2. Dependence on star designers
Strengths: 1. Leading luxury goods companies - $ 12 billion fashion and liquor conglomerate 2. Strong brand portfolio with 10 star brands and 60 top brands 3. Wide geographical presence 4. Leadership and charisma of Bernard Arnault 5. Human resource management
LVMH
Opportunities: 1. World wide presence through acquisitions of famous brands 2. Growing luxury markets in emerging economy
Threats: 1. Intense Competition 2. Consumer loyalty to brand/designer 3. Counterfeit goods damaging the brand image
Due to Globalization, the analysis of not only where spending occurs, but rather the profile of people spending has become important. Globalization
Entering New Markets where there is a rise in demand of luxury goods
Different Demand Patterns in Different Regions
Analyzing customer needs, their perception, & altering product offerings
Survival Techniques
Organic Growth – M&A – Ansoff’s Product/Mission Matrix
LVMH International Strategy
International Strategy
Organic Growth Strategy LVMH focussed on new product launches, expanding its retail network & increasing its expenditure on communications
Growth by Acquisition
Organic Growth
Other Strategies • Focus on “Star Brands” (high growth & profits)` • Decentralization • Focus on High Margin activities • Acquisitions to increase synergies (marketing, sourcing etc.) • Focus on Quality (product quality control norms)
Acquisition Strategy • Seeked to purchase & restore French Brands • Mainly to develop worldwide distribution network, maintain global presence, & derive synergies. • Examples Pommery - land Kenzo - production facility P&C - R&D synergies Zenith –Only manufacturer in world of a component Miami Cruiseline- Strenghten LVMR image
Why do companies seek growth through acquisition in Luxury Industry?
“ In the past two decades, luxury industry has been
Weakness: 1. Sustenance of multi brand strategy 2. Dependence on star designers
Strengths: 1. Leading luxury goods companies - $ 12 billion fashion and liquor conglomerate 2. Strong brand portfolio with 10 star brands and 60 top brands 3. Wide geographical presence 4. Leadership and charisma of Bernard Arnault 5. Human resource management
LVMH
Opportunities: 1. World wide presence through acquisitions of famous brands 2. Growing luxury markets in emerging economy
Threats: 1. Intense Competition 2. Consumer loyalty to brand/designer 3. Counterfeit goods damaging the brand image
Due to Globalization, the analysis of not only where spending occurs, but rather the profile of people spending has become important. Globalization
Entering New Markets where there is a rise in demand of luxury goods
Different Demand Patterns in Different Regions
Analyzing customer needs, their perception, & altering product offerings
Survival Techniques
Organic Growth – M&A – Ansoff’s Product/Mission Matrix
LVMH International Strategy
International Strategy
Organic Growth Strategy LVMH focussed on new product launches, expanding its retail network & increasing its expenditure on communications
Growth by Acquisition
Organic Growth
Other Strategies • Focus on “Star Brands” (high growth & profits)` • Decentralization • Focus on High Margin activities • Acquisitions to increase synergies (marketing, sourcing etc.) • Focus on Quality (product quality control norms)
Acquisition Strategy • Seeked to purchase & restore French Brands • Mainly to develop worldwide distribution network, maintain global presence, & derive synergies. • Examples Pommery - land Kenzo - production facility P&C - R&D synergies Zenith –Only manufacturer in world of a component Miami Cruiseline- Strenghten LVMR image
Why do companies seek growth through acquisition in Luxury Industry?
“ In the past two decades, luxury industry has been