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LVMH Case Study
Hossein Jalalion 21 November 2012
Transcript of LVMH Case Study
Reduce players in the market
Market expansion to untapped market LVMH Market entry strategy LVMH Marketing Bilal Al-Khatib Shabnam Tahernia Before the outbreak of the severe global economic and financial crisis in the third quarter of 2008
Latin America had been experiencing positive rates of economic growth for five successive years
long known as the worlds most economically and financially volatile region, five consecutive years of generalized positive growth was an achievement not seen since the 1970s. SUPREME LUXURY In Numbers "There are four main elements to our business model; product, distribution, communication and price. Our job is to do such a fantastic job on the first three that people forget all about the fourth.” An Example of CSAs France;
from Sarkozi to Holland Noura Azzam Multi-brands global product division structure
Independent Management team
Decentralized Structure Firm Specific Advantages (FSAs) Highly superior compared to its competitors
Brand name value ( 26th in the world)
Personnel (Recruiting the best designers/Creators) with high interest in Innovation.
High Capital Diversification
High Control over quality and distribution
Expanding SBUs both horizontally and vertically LVMH Strategy Market Selection High quality product responsive to local tastes and regulations
"Tight and loose" control over SBUs
Worldwide advertising and purchasing media products in bulk
Home of origin's reputation
Global strategy vision; Totally integrated group LVMH International Strategy Recommendations LVMH is present in the media sector through Groupe Les Echos which holds the French print media publications: LVMH BCG Matrix Les Echos
Connaissance des Arts
French radio station Radio Classique Media is only focused on the French market and does not fit global strategy of LVMH Non- core luxury businesses can be divested (media business , art auctions) LVMH Goal; Entering worldwide market
Customers’ priority in different countries
Different product will be matched with customers’ need
Fitting the products and prices according to the market
Adapting price according to capabilities of the country (CSA) Recommendations Diversify Strength
Bolstering the watches business
Reducing the dependency to LV References Department Store News, 2011, Louis Vuitton’s Slow Growth Strategy. [ONLINE] Available at : http://departmentstoreretailing.blogspot.com/2011/06/louis-vuittons-slow-growth-strategy.html . [Accessed 10 Nov 2012].
Johnson, G., Scholes, K., & Whittington, R., 2010. Exploring corporate strategy . 10th ed. London: Prentice Hall.
LVMH Group., 2012, [ONLINE], Available at: http://www.lvmh.com/the-group/lvmh-group . [Accessed 10 Nov 2012].
LVMH 2011 — ANNUAL REPORT. [ONLINE] Available at: http://www.lvmh.com/uploads/assets/Com-fi/Documents/en/Reports/Reports_2011/LVMH_COMPLET_GB-RA2011.pdf. [Accessed 10 Nov 2012].
The Economist., 2012. LVMH ; The empire of desire. [ONLINE] Available at: http://www.economist.com/node/21556270 .[Accessed 7 Nov 12].
The Economist., 2012. Bernard Arnault; suitcase packed. [ONLINE] Available at:
http://www.economist.com/node/21562959 . [Accessed 11 Nov. 12].
The Economist., 2012. Schumpeter; adieu, la France. [ONLINE] Available at:
http://www.economist.com/node/21557318 . [Accessed 12 Nov. 12].
The Economist., 2012. Luxury goods; the second handbag war. [ONLINE] Available at:
http://www.economist.com/node/17805643 . [Accessed 12 Nov. 12].
The Economist., 2009. Substance of style; LVMH in the recession. [ONLINE] Available at: http://www.economist.com/node/14447276. [Accessed 11 Nov 12]. Strengthening some of LVMH's smaller names such as FENDI
Buying a big, established, global brand with potential for growth Teaming with academic institutions e.g. London Business School and INSEAD (research projects: on consumer behavior, int. marketing, etc.) In Numbers