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Louis Vuitton Case Study
Transcript of Louis Vuitton Case Study
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?
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
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
Consumers want high quality hand-made products
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
Increase in profit
Maintain exclusivity of the brand without alienating existing consumers
Employees will gain more specialization in the handmaking of these products
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
Stability in foreign investment
Minimizing risks of currency fluctuations and lower cost
Price is less affected by exchange rates
Managers and employees can focus energy on individual store success and generating more profit
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.
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