LVMH?s Diversification

343 Words1 Page

LVMH’s Diversification
Strategy into Luxury Goods

The problem

After the case and readings the problems of LVMH there are several problems such as the declining demand for luxury goods because it is linked to political events, situation and social trends. (After the attacks of 9/11 an impact on luxury goods has dropped and had automatically an impact on LVMH sales)
Secondly luxury products are easy to counterfeit, some countries such as china, turkey, and other still have to improve their IPR policies
And finally LVMH diversification strategy (Bernard Arnault) is making acquisitions outside the company’s sector. In sector where they don’t have the “know-how” and don’t match the company Image. The current CEO (Arnault Bernard) is also the major shareholder which makes him easier to make decisions on new acquisitions

The swot analysis
Strength:

• Name recognition which makes them the largest product marketplace
• Their experience during the time
• Leading position
• Quality provider
• Distribution
• Public Relation

Weaknesses

• Their Diversification
• Conflict of interest (fashion vs. wine and spirits)
• Forward and backward integration
• Luxury goods are easy to imitate. (Perfumes, Louis Vuitton bags…)
• Finance problems: net sales decreased by nearly 6% in 2003
• Declining shares

Opportunities

• Merger and acquisition
• Consumer trends
• Current increase in wealth
• Emerging market
• Improvement of way of selling their large product line (distribution channels)
• Expansion to other markets

Threats

• Change in consumer taste
• Economic recession
• Competitor in smaller markets
• Counterfeit

Recommendation

Focus on core business
To expand the current existing brands geographically.
Alliances with new creators
Gain access to distribution channels as a different proposition
Sell the acquisition which don’t fit the company image

Implementation

Choose several countries to enter that is suitable for the luxury market and in order to develop the strategy of the company

Show More
Related

  • The Disaster at Chernobyl

    846 Words  | 2 Pages

    On April 26th, 1986, operators at the Chernobyl Power Plant in Chernobyl, Ukraine, ran what they thought to be a routine safety test. But fate was not on the side of these operators. Without warning, reactor #4 became unstable, as it had been operating at a low power for a possible shutdown and the reactor’s design caused it to be unsafe at this level of power. Internal temperatures rose. Attempts to cool the system produced the opposite effect. Instantly, the nuclear core surged with power. At 1:23 p.m., the reactor exploded. The first blast ripped off the reactor's steel roof. The second blast released a large plume of radiation into the sky. Flames engulfed the building. For ten long days, fire fighters and power plant workers attempted to overcome the inferno. Thirty-one of them died of radiation poisoning. Chernobyl was the worst nuclear disaster in history. It unleashed radiation hundreds of times greater than the atomic bombs exploded over Japan during World War II. [1]

    Read More

  • A Comparison Of The Film 'The Land Of Blood And Honey And' The Lives Of Others?

    1114 Words  | 3 Pages

    Love is a very ambitious situation, if you are not careful, it can make you do ridiculous things. As much as it is beautiful, it is also dangerous. At times you have to be attentive and be sure that the person is feeling the same as you do. Someone once told me that people fall in love with the most unexpected person at the most unexpected time. In the two movies The Land of Blood and Honey and The Lives of Others, there was unexpected romance that arose from both films and it all happened at the wrong time. The obstacles these relationships face were due to promises. The promises weren’t about making changes; they were about not facing them alone. Nevertheless, where there is love, there is also betrayal.

    Read More

  • Exploring Walt Disney Company: The Entertainment King

    1511 Words  | 4 Pages

    ...ative aspects of diversification, for example through better corporate planning, human recourse management and reaching further synergies between its various business lines.

    Read More

  • The Chernoblyl Nuclear Plant Disaster

    1349 Words  | 3 Pages

    In the early morning of April 26th, 1986, two explosions tore through the Chernobyl nuclear power plant leaving behind nothing but rubble, nuclear fallout, and the infamy of what will probably long be called the worst nuclear disaster in history (World Nuclear Association, 2013). The cities of Chernobyl and Pripyat remain ghost towns due to extremely high levels of radiation still present 28 years after the explosion. The undeniable environmental effects of the blast couple with the severe health effects to earn the Chernobyl explosion its infamy.

    Read More

  • It Could Happen Here

    856 Words  | 2 Pages

    So let us take a moment and briefly review a brief review of the tragedies of the Tohoku-Oki earthquake is the largest recorded earthquake at a 9.0 and caused a nearly 50-Foot Tsunami to strike the country already crippled by the mega quake. It has been three years now since the quake and Tsunami hit Japan. In the moments following Fukushima Daiichi’s reactors main power supplies went down, a safety measure assured that, back-up generators would take over and supply the much needed cooling of Fukushima Daiichi nuclear power plant. However, the World Nuclear Associates (WNA) recounts what occurred in the two hours that followed a combination of Mother Nature and human arrogance met in what was a series of unfortunate and disastrous events for the power plant and the villages surrounding it.

    Read More

  • Freedom In The Story Of An Hou

    982 Words  | 2 Pages

    Mrs. Mallard’s happiness was in fact, the cause of her death. This death, arrived out of shock that her weak heart could not handle. The arrival of her husband who was the cause of her new-found freedom caused her death. Mrs. Mallard’s death could be seen as the ultimate freedom from her unhappy marriage. Though her life ends in an extremely ironic manner, Mrs. Mallard does in fact finally escape the restrictions of her old life, not merely upon the hour before Brently Mallard’s arrival but in the end for eternity.

    Read More

  • Argumentative Essay: High Cost Of Nuclear Energy

    555 Words  | 2 Pages

    Energy affects our lives in many ways and in nuclear energy, there’s a lot of drama. Nuclear energy has provided us with powerful and vigorous energy, but it also has had some…dramatic explosions. I am writing, believing that we should not use nuclear powers since the cons outweigh the pros. Nuclear energy is a wild and unpredictable stallion, which could explode at the slightest disturbance. Nuclear energy accidents are terrible, the environmental impact is not good, and the cost makes the government’s wallets bleed. Although nuclear energy has its benefits, the cons are just too much to handle. Let’s take a look at some accidents that have occurred through the ages.

    Read More

  • Luxury Vs Luxury

    703 Words  | 2 Pages

    Luxury goods are not the necessities but are very much desirable to people which is supported by a share of money income. They are not easily available and affordable for everyone but due to the coming up of competition in market this has been changed. Nowadays, every individual wants to raise their self high and wants to be different from everyone. Since, the times have changed luxury goods have become more affordable for middle class consumers. Whenever we open our social media accounts such as Instagram, snapchats or news on internet or be it the reality shows, it is full of rich people showing off their dresses, bags, accessories etc. Such news put an impact on our inner thinking about our need to look and feel good through rich possessions. Several manufactured goods have become luxury goods as they are designer, durable and better quality. These goods are considered as luxury goods by the consumers because they play a role of status and class for those who showcase or owns them. These items are not necessarily better than less expensive substitutes are purchased with the main purpose of showcasing their wealth. These kinds of goods are object of socio-economic phenomenon which includes watches, jewelleries, designer clothes and accessories, large

    Read More

  • Essay On Luxury In China

    1334 Words  | 3 Pages

    China is now the forerunner in the luxury sector with a society that is fueled by productivity, with a growing economy, an increasing population, and a demand for luxury products as those who were not able to attain wealth once before have gained access that was once a rarity in the past. According to the World Luxury Association, China is the world’s second largest luxury market, only surpassed by Japan. With 1.3 billion consumers and double-digit growth rates, Chinese consumers are responsible for 18% of global spending within luxury consumption (Petersen, 2011).... ... middle of paper ...

    Read More

  • Marketing Mix Strategy to Achieve Marketing Objectives

    779 Words  | 2 Pages

    Kapferer, J., & Bastien, V 2009, The luxury strategy: break the rules of marketing to build luxury brands. London: Kogan Page.

    Read More

  • Analysis Of The Luxury Industry

    1024 Words  | 3 Pages

    The use value of a product is dependent on its functionality. Through this we can pursue that a luxury bag is not more worthy than a standard bag from a fashion brand such as Zara or H&M. Therefore we can say that luxury is not generally functional but the elegance which is related to pleasure, culture and sacred. The labour value is the most significant one in case of luxury as it brings the authenticity of the product. The concept of Luxury goods is that of a mix of elements like its inheritance and its uniqueness. (Bastien and Kapferer : 2014 :

    Read More

  • Nuclear Energy: A Disaster Waiting to Happen?

    2173 Words  | 5 Pages

    This fictional scenario can relate to many different true scenarios. On March 28, 1979, the Three Mile Island Power Plant experienced a partial nuclear meltdown in one of its reactors (World-nuclear). The resulting accident caused small amounts of radioactive gases to be released into the environment. Though no major damage was done and nobody was harmed, the possible consequences were too much to risk, especially in a rural area. On April 26, 1986, the Chernobyl Nuclear Power Plant experienced a colossal explosion and meltdown (World-nuclear). The result of this explosion caused massive amounts of radiation to be released into the atmosphere and environment around the plant. This caused the adjacent city of Pritpyat to be evacuated and eventually ...

    Read More

  • The Importance Of Luxury Brands In The Luxury Industry

    3375 Words  | 7 Pages

    This report will firstly look at the luxury part and explain the importance of it nowadays. Secondly, it will focus on the motivation factors

    Read More

  • LVMH strategic analysis

    1536 Words  | 4 Pages

    LVMH founds itself in a stable financial situation. Being positioned as the market leader they have better financial results than the rest of the competitors. Although the sales results for 2004 were under the industry’s average the overall performance over the last 5 years was 3% higher then the industry. It is important to note that the major owner of the company’s capital is present CEO Bernard Arnault with 47.52% of the control of the company with 64% of voting rights. This may have an Important impact in the overall performance and operating decision taken in the company.

    Read More

  • Marketing Assignment: Charles & Keith Footwear

    1061 Words  | 3 Pages

    ...enture into overseas market comes with expectations as well as uncertainties due to unfamiliarity. Charles and Keith, the fashion retailer, has to understand clearly that what appeals in one market might not be accepted in the others and this is almost the same for all industries. Thus, a thorough research on cultural background has to be done before entering an unfamiliar ground.

    Read More

More about LVMH?s Diversification

Open Document