Management and Luxury Goods

Topics: Management, LVMH, Brand Pages: 3 (491 words) Published: August 16, 2013
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 overly...
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