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Louis Vuitton Case Study

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Cristina Donofrio

on 1 April 2015

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Transcript of Louis Vuitton Case Study

Problems Faced
Cristina Donofrio, Stephanie Kempadoo,
Caroll Mendieta, Jingchao Yuan, Evi

How can Louis Vuitton sustain their growth while staying true to the values and heritage of the company?

How can Louis Vuitton maintain global profitability?
Other Issues
Difficult for customers to make purchases around the world due to limited access to exclusive stores

People began spending money on luxury experiences as opposed to goods

Recession- consumers became more value conscious
Sustaining Growth with the Same Values

Louis Vuitton is losing their exclusivity due to marketing towards multiple segments

Workers are no longer specialized which leads to automated manufacturing of bags.

Louis Vuitton heritage and culture is jeopardized due to change in management

Maintaining Global Profit

Chinese consumers purchase LV products from Europe due to high exchange rates and import tariffs


Problems of Stakeholders
Capital Markets

Want to increase profits and grow the brand while maintaining the essence of the brand
Maintain a price for each region that won’t result in a profit loss

Product Market
Consumers want high quality hand-made products

Organization Market

Employees are trained in all areas of manufacturing thus sacrificing their specialization for productivity
Efficiently produce products without losing quality of the brand

Solution to Sustaining Growth
Create exclusivity for a more narrow segment through unique high priced products for each region, targeting the absolute & aspirational segments
Effects on Stakeholders for Solution
Capital Markets
Increase in profit

Product Markets
Maintain exclusivity of the brand without alienating existing consumers

Organizational Markets
Employees will gain more specialization in the handmaking of these products

Tools Used
Competitive Scope from Chapter 5
Solution to Sustaining Global Profitability
Expand to markets where higher profit can be generated due to exchange rates and decrease supply in countries where the exchange rate can yield loss, while manufacturing in few select and carefully chosen regions globally.
Effects on Stakeholders for Solution #2

Capital Markets
Stability in foreign investment
Minimizing risks of currency fluctuations and lower cost

Product Markets
Price is less affected by exchange rates

Organizational Markets
Managers and employees can focus energy on individual store success and generating more profit

Final Recommendation
Clark, Nicola. "LVMH, The Luxury Goods Giant, Posts a 64% Gain in Annual Profit." The New York Times. The New York Times, 03 Feb. 2015. Web. 01 Apr. 2015.

Roberts, Andrew. "Vuitton Revival Shows Logo Isn't Dead as Bags Fly Off Shelves." Bloomberg.com. Bloomberg, 4 Feb. 2015. Web. 01 Apr. 2015.

Schmidt, Elle. ""Think Global, Act Local": An Evaluation of McDonald's Marketing Mix." Joining the Groundswell. N.p., 30 Mar. 2014. Web. 01 Apr. 2015.

"LVMH: World Leader in High-quality Products, Prestigious Brands - Louis Vuitton Moët Hennessy." LVMH: World Leader in High-quality Products, Prestigious Brands - Louis Vuitton Moët Hennessy. N.p., n.d. Web. 01 Apr. 2015.

Willett, Megan. "Louis Vuitton Is Now a 'brand for Secretaries' in China." Business Insider. N.p., 27 Feb. 2015. Web. 01 Apr. 2015.

Thank you
Solution 2
Expand in markets with higher profit due to exchange rates and decrease supply in countries with possible currency loss, while manufacturing in few select and carefully chosen regions globally.

It's most attractive to the shareholders due to less risk and more control

The brand will be able to maintain global profits and grow internationally

Less counterfeiting due to level prices
Full transcript