Summary

A company must differentiate itself from others during the product life cycle by
creating an image that demands attention and fosters unique brand awareness.
Louis Vuitton is a company that continuously rejuvenates itself and has
maintained a highly coveted brand for 15 years. !onogrammed Louis Vuitton
products are in such demand that it has spawned a multi"million dollar mar#et of
counterfeit products$ most commonly referred to as %#noc#"offs.& 'he demand is
so high for these #noc#"off products that LV!( !oet (ennessy$ owner of the
brand$ has a special team that wor#s with international police organi)ations. 'he
LV logo has become an icon in the designer luggage$ handbags and accessories
mar#et. 'he words Louis Vuitton are the code for describing an internationally
recogni)ed and e*clusive fashion empire.
LVMH Target Market: - +t aims at the people who are aged between 1,"-5 and
love towards fine design$ and the taste for tradition and lu*ury$ Louis Vuitton has
maintained its lead in fashion through clever advertising in maga)ines li#e
%Vogue& with print ads that focus on LV logo products as chic. +n recent years
the company has e*panded its product line into ready"to"wear$ shoes$ watches
and etc
LVMH's strategy: - .oncentrating on its star brands which have the most
growth potential.// 'he group/s most profitable brands include Louis Vuitton and
.hristian 0ior. !oet (ennessy Louis Vuitton 1LV!($ the world/s largest lu*ury
goods company2$ owns famous lu*ury brands li#e 0om 3erignon$ .hristian 0ior$
0onna 4aran and Louis Vuitton. LV!( defines a brand/s identity by mining its
history and finding the right designer to e*press it. LV!( believes in controlling
quality and distribution and creating brand e*citement among customers with
innovation$ which in its view is the ultimate driver of growth and profitability.
.hairman 5ernard Arnault believes that star brands are born when a company
manages to ma#e products that /spea# to the ages/$ yet remain intensely
modern. 'hese products fulfil the consumer/s fantasy. A star brand is timeless$
modern$ fast growing and highly profitable. Arnault believes that the impression
of timelessness can be created with uncompromising quality.
Lvmh $ joint venture between giants
LV!( Sells 6bel
LV!( to focus on top brands
7egional 5usiness 8etwor#s and the !ultinational 7etail Sector
Strategic planning 9: Lvmh consists of the process of developing strategies to
reach a defined objective. As LV!( labels a piece of planning ;strategic& 5A
e*pect it to operate on the grand scale and to ta#e in ;the big picture; 1in
contradistinction to ;tactical; planning$ which by definition has to focus more on
the tactics of individual detailed activities2.
;Long range; planning typically projects current activities and programs
into a revised view of the e*ternal world$ thereby describing results that
will most li#ely occur 1whether the planner wants them or not<2
;Strategic; planning tries to ;create; more desirable future results by
(a) influencing the outside world or
(b) Adapting current programs and actions so as to have more favourable
outcomes in the e*ternal environment.
+nvestment Strategy=">rowth investing is a style of investment strategy. 'hose
who follow this style$ #nown as growth investors$ invest in companies that
e*hibit signs of above"average growth$ even if the share price appears
e*pensive in terms of metrics such as price"to"earning or price"to"boo# ratios. +n
typical usage$ the term ;growth investing; contrasts with the strategy #nown as
value investing.
(owever$ some notable investors such as 5A #new that there is no theoretical
difference between the concepts of value and growth when considering 1;>rowth
and Value +nvesting are joined at the hip;2. +ndeed$ when just investing in one
style of stoc#s$ diversification could be negatively impacted.
'he ?ine @ Spirits unit of LV!($ a world leader in lu*ury$ includes five (ouses of
.hampagne and .ognac$ all of them world famous brands= 0om 3Arignon$ !oBCt
@ .handon$ Veuve .licquot 3onsardin$ (ennessy$ 7uinart and 4rug. (istorically$
the houses had been fiercely competitive. 8ow that they were all under the
LV!( >roup umbrella$ the parent company needed to find a way to ma#e them
wor# in a harmoni)ed way with their clients.
!oBt (ennessy 1!(2 objectivesDunderpinned by harmoni)ation$ simplification
and innovationDwere to improve the processes and +' solutions of its houses
with immense scope included. Supply .hain 1planning lin#ed to forecast and
distribution replenishment for subsidiaries and wholesalers$ 3roduction and
Euality !anagement$ !aintenance$ 3urchasing$ :inance and 7eporting$
'raceability and 3roduct Lifecycle !anagement.
About LV!(
LV!( !oet (ennessy Louis Vuitton is the world/s leading lu*ury products group.
LV!(/s ?atch @ Fewelry division comprises 'A> (euer$ 6bel$ .haumet$ Genith$
:red$ as well as 9mas$ the prestigious +talian writing instruments company. 'he
>roup is represented in ?ines and Spirits by a portfolio of brands that includes
!oet @ .handon$ 0om 3erignon$ Veuve .licquot 3onsardin$ 4rug$ 3ommery$
.anard"0uchene$ !ercier$ 7uinart$ .hateau d/Hquem$ .handon$ (ennessy and
(ine.
LV!( is present in the 3erfumes and .osmetics sector with 3arfums .hristian
0ior$ >uerlain$ >ivenchy and 4en)o$ and has recently acquired si* promising
cosmetic companies$ 5liss$ (ard .andy$ 5ene:it .osmetics$ Irban 0ecay$ !a#e
Ip :or 6ver and :resh. +ts :ashion @ Leather >oods division includes Louis
Vuitton$ the world/s leading lu*ury brand$ as well as .eline$ Loewe$ 4en)o$
>ivenchy$ .hristian Lacroi*$ 'homas 3in#$ :endi and 3ucci. +n addition$ LV!(
recently finali)ed the acquisition of 0onna 4aran$ the legendary American brand.
LV!( is active in selective retailing through 0:S$ !iami .ruiseline$ Sephora$ Le
5on !arche and La Samaritaine. 3hillips$ one of the world/s largest auction
houses$ which has recently teamed up with L/6tude 'ajan and >eneva art dealer
de 3ury @ Lu*embourg Art$ also belongs to the LV!( >roup. .onnaissance des
Arts and Art @ Auction !aga)ine$ two speciali)ed publications$ also recently
joined the >roup. +n J LV!( also launched eLIKI7H$ the authoritative online
source for lu*ury goods on the +nternet.
LV!( shares 1LV!(.3A2 are listed on the 3aris Stoc# 6*change and 8AS0AE in
the Inited States 1LV!(H2
LV!( !oet (ennessy Louis Vuitton SA " :inancial and Strategic Analysis
.hallenge statement=
%0espite worldwide softness in the sale of lu*ury goods$ LV!( has cemented its
position as the worldLs largest and most profitable player in the category. 'o stay
there it must #eep its customers loyal and its brand strong and find new mar#ets
worldwide& 1(a)lett .. JM2. 'hat is why in its mission they state to represent
the most refined qualities of ?estern % art de vivre& all around the world. 'heir
objective is to be the leader in the lu*ury mar#et$ continuing to transmit
elegance and creativity. 'his poses some major challenges$ the main one is to
#eep being the leader in the lu*ury mar#et through a sustainable growth. 'he
main problem to achieve it is the high dependency on three main countries$
:rance$ Fapan and ISA. 'his becomes a threat because if there is an economic
downturn in one country it affects LV!( directly that is why.
LV!( founds itself in a stable financial situation. 5eing positioned as the mar#et
leader they have better financial results than the rest of the competitors.
Although the sales results for JM were under the industryLs average the overall
performance over the last 5 years was -N higher then the industry. +t is
important to note that the major owner of the companyLs capital is present .69
5ernard Arnault with MO.5JN of the control of the company with PMN of voting
rights. 'his may have an +mportant impact in the overall performance and
operating decision ta#en in the company.
>lobal !ar#ets 0irect$ the leading business information provider$ presents an in"
depth business$ strategic and financial analysis of LV!( !oet (ennessy Louis
Vuitton SA. 'he report provides a comprehensive insight into the company$
including business structure and operations$ e*ecutive biographies and #ey
competitors. 'he hallmar# of the report is the detailed strategic analysis and
>lobal !ar#ets 0irectLs views on the company.
Scope
'he companyLs strengths and wea#nesses and areas of development or
decline are analy)ed. :inancial$ strategic and operational factors are
considered.
'he opportunities open to the company are considered and its growth
potential assessed. .ompetitive or technological threats are highlighted.
'he report contains critical company information " business structure and
operations$ the company history$ major products and services$ #ey
competitors$ #ey employees and e*ecutive biographies$ different locations
and important subsidiaries.
+t provides detailed financial ratios for the past five years as well as
interim ratios for the last four quarters.
:inancial ratios include profitability$ margins and returns$ liquidity and
leverage$ financial position and efficiency ratios.
7easons to buy
A quic# %one"stop"shop& to understand the company.
6nhance businessQsales activities by understanding customersL businesses
better.
>et detailed information and financial @ strategic analysis on companies
operating in your industry.
+dentify prospective partners and suppliers " with #ey data on their
businesses and locations.
.apitali)e on competitorsL wea#nesses and target the mar#et
opportunities available to them.
.ompare your companyLs financial trends with those of your peers Q
competitors.
Scout for potential acquisition targets$ with detailed insight into the
companiesL strategic$ financial and operational performance.
LV!(Ls 0iversification
Strategy into Lu*ury >oods
'he problem
5y JJ$ !oet (ennessy Louis Vuitton was the worldLs largest lu*ury products
company$ enjoying annual sales of 1J.J billion euros. LV!( carries the most
prestigious brand names in wine$ champagne$ fashion$ jewelry$ and perfume.
Ipon entrance of this lu*ury product industry$ LV!( was aware that they
produced products that nobody needed$ but that were desired by millions across
the world. 'his desire in some way fulfills a fantasy$ ma#ing consumers feel as
though they must buy it$ or else they will not be in the moment$ and thus will be
left behind.
'he LV!( business portfolio began to ta#e shape in 1R,O with the merger
between Louis Vuitton and !oet (ennessy which was a four billion dollar merger.
9ver the course of time$ LV!( has acquired over 5 lu*ury brands$ such as
0onna 4aren$ :endi$ and Sephora. 'hey called it$ %a collection of star brands and
rising stars.& LV!( found this industry to be timeless and modern$ highly
profitable$ and very rapid growing.
0espite all of the above mentioned$ LV!( did e*perience some bumpy times.
Some of these times were induced through internal problems$ while others were
caused by e*ternalities$ li#e Sept. 11. ?ith such a wide range of product
offerings$ LV!( was on top of the industry in certain aspects$ but has room for
growth in other areas.
After the case and readings the problems of LV!( there are several problems
such as the declining demand for lu*ury goods because it is lin#ed to political
events$ situation and social trends. 1After the attac#s of RQ11 an impact on lu*ury
goods has dropped and had automatically an impact on LV!( sales2
Secondly lu*ury products are easy to counterfeit$ some countries such as china$
tur#ey$ and other still have to improve their +37 policies
and finally LV!( diversification strategy 15ernard Arnault2 is ma#ing acquisitions
outside the companyLs sector. +n sector where they donLt have the %#now"how&
and donLt match the company +mage. 'he current .69 1Arnault 5ernard2 is also
the major shareholder which ma#es him easier to ma#e decisions on new
acquisitions
'he swot analysis
Strength=
S 8ame recognition which ma#es them the largest product mar#etplace
S 'heir e*perience during the time
S Leading position
S Euality provider
S 0istribution
S 3ublic 7elation
?ea#nesses
S 'heir 0iversification
S .onflict of interest 1fashion vs. wine and spirits2
S :orward and bac#ward integration
S Lu*ury goods are easy to imitate. 13erfumes$ Louis Vuitton bagsT2
S :inance problems= net sales decreased by nearly PN in J-
S 0eclining shares
9pportunities
S !erger and acquisition
S .onsumer trends
S .urrent increase in wealth
S 6merging mar#et
S +mprovement of way of selling their large product line 1distribution channels2
S 6*pansion to other mar#ets
'hreats
S .hange in consumer taste
S 6conomic recession
S .ompetitor in smaller mar#ets
S .ounterfeit