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Louis vuitton monët hennessy Expanding Brand Dominance in Asia
| Date post: | 10-Feb-2017 |
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Louis vuitton monët hennessy Expanding Brand Dominance in Asia
the company What do you need to know about LMVH?
currently…company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
revenues of €30,638 Million in
2014.
3,708 stores worldwide.
parent of 50-sub companies and brand names.
operating in the luxury goods
market.
source: marketline,2016.
the Context What is LVMH up to?
company
context
industry
competitive advantages
distribution
new stores
suggestions
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strategic acquisitions.
Fighting piracy. teamed up with google to fight counterfeits
Lvmh is known to use acquisitions to fuel growth.
Source: roberts, 2013.
Source: gayomali, 2014.
the Industry What is happening in the luxury goods market?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
endSource: statista, 2016.
global luxury goods market has been growing…
the Industry What is happening in the luxury goods market?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
endSource: marketline, 2016.
increasing demand for luxury goods
in asia.
intense competition.
growing counterfeit
products market.
increasing labour cost in the usa
and europe.
~Fake~
general industry information:
the Industry What is happening in the luxury goods market?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
endSource: pan, 2004.
political uncertainties and
cultural differences.
distribution and pricing in asia.
cost efficiency.
brand management within lmvh.
issues and challenges in the asian market:
the competitive advantages What are LVMH’s competitive advantages?
company
context
industry
competitive advantages
distribution
new stores
suggestions
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diverse portfolio:
Balance between category and geographic diversification ensures success.
Protection against political and economic instability of a region.
the competitive advantages What are LVMH’s competitive advantages?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
diverse portfolio:
Balance between category and geographic diversification ensures success.
Protection against economic or cyclical changes in certain products or categories.
the competitive advantages What are LVMH’s competitive advantages?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
diverse portfolio:
Operating in more segments.
Larger market.
LVMH is more successful as a group.
Added flexibility and security.
Balance between category and geographic diversification ensures success.
the competitive advantages What are LVMH’s competitive advantages?
company
context
industry
competitive advantages
distribution
new stores
suggestions
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synergies between brands:
Ability to exchange practices, resources and knowledge.
• Some integration within the value chain (Tangible and intangible assets)
• Still able to preserve autonomy and entrepreneurial spirit
• SG&A: Cost savings associated with economies of scale
• Primary business activities: Consolidated for multiple brands in the same segment
• Use of both Horizontal and Vertical integration strategies.
the competitive advantages What are LVMH’s competitive advantages?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
presence in the quickly growing segment of selective retailingOnline luxury market: Sephora.com
the competitive advantages What are LVMH’s competitive advantages?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
presence in the quickly growing segment of selective retailingTravel Retail: DFS
the distribution How does LVMH distribute goods?
company
context
industry
competitive advantages
distribution
new stores
suggestions
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end
Lmvh business lines
selective retailing.
perfumes & cosmetics
watches & jewelry.
fashion & leather.
wines & spirits.
the distribution How does LVMH distribute goods?
team
company
context
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competitive advantages
distribution
new stores
suggestions
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channel strategy: direct involvement approach
• Creating own sales force • selling from its own brand of stores directly to
customers rather than using independent agents, distributors, & wholesalers
strict control
facilitates differentiation
common channel strategy in lvmh’s industry
high level of quality.
culturally cohesive branding.
the considerations What are the main considerations when opening a store?
company
context
industry
competitive advantages
distribution
new stores
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leveraging competitive advantages.
the suggestions What do we recommend?
company
context
industry
competitive advantages
distribution
new stores
suggestions
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end
Increase anti-counterfeiting efforts
• Industry-wide alliance
• Crowd sourced enforcement
• partner with other sites
the suggestions What do we recommend?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
cultural adaptation
• asian cultures are distinct
• hire local designers
• offer asia more control over products
the suggestions What do we recommend?
company
context
industry
competitive advantages
distribution
new stores
suggestions
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end
Leverage trend towards masstige goods
• growth in income and the size of the middle class is contributing to growth in this category
• efficient supply chains have made high quality goods widely accessible
• try to understand the middle class consumer
the suggestions What do we recommend?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
expand specialty retail into hotels
• Travel at core of LVMH brand
• Existing presence in travel retail markets (Airports and cruises)
the suggestions What do we recommend?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
expand specialty retail into hotels
• Global markets depend on touristic spending - Especially in China
• Luxury hotel sales have increased 9%
• Asian middle class (Growing population and rising income) leading increased opportunities for international travel
the suggestions What do we recommend?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
expand specialty retail into hotels
• 2010: LVMH entered the luxury hotel business
• Can build on this existing business by creating a showcase of LVMH products in these hotels
• Introduction of the perfect complement to travel and retail for its Asian consumers.
unique opportunity: Expansion of selective retailing (through Travel retail) by introducing stores within luxury hotels.
the wrap-up What have we covered?
company
context
industry
competitive advantages
distribution
new stores
suggestions
wrap-up
end
competitive advantages• Diverse portfolio • Synergies between brands • Presence in the quickly growing segment of selective retailing
distribution & new stores• Channel strategy: direct involvement • Consider: culturally cohesive branding, uncompromising quality, fully leveraged
competitive advantages
recommendations• Increase anti-counterfeiting efforts • Cultural adaptation • Leverage trend towards masstige goods • Expanding specialty retail into hotels
thank you for listening Are there any questions?
Appendices A-E
A: reported revenue per Segment by lvmh (2014-2015)
reported revenue
bcg matrix
value chain
selective retailing:
sephora
selective retailing:
dfs
evaluating distributors
b: bcg matrix
• cash cows: fashion & leather segments
• question marks: perfume & cosmetics, watches & jewelry
• stars: selective retailing, wines & spirits
reported revenue
bcg matrix
value chain
selective retailing:
sephora
selective retailing:
dfs
evaluating distributors
c: value chain analysis
reported revenue
bcg matrix
value chain
selective retailing:
sephora
selective retailing:
dfs
evaluating distributors
d: selective retail - sephora & sephora.com
Growth in Selective Retailing (Sephora) Online Luxury Market Growth (sephora.com)reported revenue
bcg matrix
value chain
selective retailing:
sephora
selective retailing:
dfs
evaluating distributors
e: selective retail - Travel retail - dfs
reported revenue
bcg matrix
value chain
selective retailing:
sephora
selective retailing:
dfs
evaluating distributors
e: criteria for evaluating distributors
Criteria for Evaluating Distributors
reported revenue
bcg matrix
value chain
selective retailing:
sephora
selective retailing:
dfs
evaluating distributors
