Thursday, March 28, 2019
LVMH strategic analysis :: essays research papers
Challenge statement contempt worldwide softness in the sale of luxury goods, LVMH has cemented its position as the worlds largest and most profitable player in the category. To endure there it must keep its customers loyal and its brand strong and bump new commercialises worldwide (Hazlett C. 2004). That is wherefore in its mission they state to see the most refined qualities of Western art de vivre all around the world. Their object is to be the attraction in the luxury market, continuing to transmit refinement and creativity. This poses some major challenges, the main(prenominal) one is to keep being the leader in the luxury market done a sustainable growth. The main problem to achieve it is the elevated dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one country it affects LVMH directly that is why. ANALYSISFinancial analysis.LVMH founds itself in a stable financial situation. Being position ed as the market leader they perplex better financial results than the rest of the competitors. Although the sales results for 2004 were under the industrys average the overall performance over the last 5 years was 3% higher(prenominal) then the industry. It is important to note that the major possessor of the clubs capital is present CEO Bernard Arnault with 47.52% of the control of the troupe with 64% of voting rights. This may have an Important impact in the overall performance and operating decision taken in the company. trade systemAfter a 4 P analysis of the company one found that it found itself in a luxury market where product quality and constant innovation are key points for the success. That is why the production process and its design can take even months. harvest-festival line is extensive however it is only conformed of high priced products. Price in this case is a guarantee of the quality present in the product. Moreover, high pricing represent an element of dif ferentiation that the customer appreciates. However this is not a setback, LVMH has managed to have world wide presence and success. To accomplish it its discriminating retailing division is of high importance. Nevertheless, promotion posses the major challenge since its through this that the image of the product its transmitted that is why the company poses a major part of its budget in this section. It is Important to note that the percentage allocated is higher than those of most competitors.