Strategic integration & brand expanding dominance in Asia - LVMH - Script for a presentation

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Strategic integration & brand expanding dominance in Asia - LVMH - Script for a presentation

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Analysis, luxury market, segmentation, swot analysis, LVMH, Moët Hennessy Louis Vuitton, Asia, challenges, strategic challenges, success factors, competitors, Hermès, Richemont, Gucci

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Abstract

As it currently stands, the luxury market is a thriving market with continuous growth despite a complex economic situation in recent years. The market registered nearly $88 billion in global spending on luxury goods in 2003. We anticipate an increase in spending on luxury goods of 3% to 5% over the next few years. Very promising results despite the economic situation, which points to the end of the exuberance of luxury goods after decades of democratization and consolidation of our positions.

Analysis & segmentation of the luxury market
Analysis of our main competitors
Our company (LVMH) SWOT and its key success factors
How should we structure to meet the strategic challenges of the future?
In which sector should we focus?
Should we go to Asia ? And Where ?
What are our challenges in Asia?

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[...] The clientele is built on a local and stable base, but it is especially relatively young. This aspect would allow us to play on customer loyalty. In addition, LVMH has been present since 1991, a long-standing introduction that has enabled us to form a network of 15 stores in the Korean domestic market. India Lastly when it comes to India, it is not the right timing nor our priority as luxury goods awareness is not really high so investing in marketing and a large-scale campaign in India will not be our first concern. [...]

[...] Strategic integration & brand expanding dominance in Asia - LVMH - Script for a presentation Hello ladies and gentlemen, thank you for being here. Let's briefly review the conduct of our meeting. We will present here: 1. Analysis & segmentation of the luxury market 2. Analysis of our main competitors 3. Our company (LVMH) SWOT and key success factors We will then start a second part, focusing on our structuring and the last sectors added to the group. 4. How should we structure to meet the strategic challenges of the future After presenting the challenges we will face in the new markets for which we have an appetite. [...]

[...] The logic of métiers The first question is about our structure, and from what we've heard before, we can already see that there seems to be a problem, as our KSF seems to blatantly contradict one another. On one hand, what makes most of LVMH success is the independence we give our brands; but on the other hand, we also thrive from our position as the biggest luxury conglomerate in the world. But how should we intertwin those two key aspects of our success? [...]

[...] Besides, we are investing in developing our jewelry brand by partnering up with Debeers and investing in our rising star brands. Perfumes & Cosmetics area We count several competitors as the main threats, including multi-brand player L'Oréal and single-brand Chanel. The success of this business is strongly linked to brand awareness and its notoriety, and the sales growth importantly benefiting from the new structure and support of the shared service center. Selective Retailing This division represents the most important activity of the group in terms of sales, and it was not affected by the recession. [...]

[...] More globally, Asia for them represents a significant part of their sales 3. Our company (LVMH) SWOT and its key success factors Strengths Weaknesses Opportunities Threats Wines & spirits - Domination of the premium champagne segment & cognac market of the cognac market + 20-25% of the overall champagne market) - Leading producer of champagne + Large distribution Networks -Exclusive brands and distribution networks -Absent from "popular segments" of drinks such as beer, whiskey and vodka. -Must carry large inventories to assure at last a minimum level of production and quality to cover the wine sector unpredictable production origin constraint -Operation complexity resulting from trying to the advantage of synergies overshadowed potential gains -Good progress & growth in the US + Japan for the champagne business with a rapid development in rest of Asia (especially China and Taiwan) -Strong union + government Intervention Fashion & Leather goods -Own 12 of the most famous brands of the industry, with worldwide reach -Unique identity of each brand. [...]

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