Date post: | 16-Jan-2017 |
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“Building Empire of Desire in China” LVMH
Angelica Joyce T. JacalneBA 190 - Strategic Management
University of the PhilippinesProf. Mita Angela M. Dimalanta
• Formed in 1987 through a merger of two fashion houses: Louis Vuitton and Moët Henessy
Flagship Brand
MISSION“The mission of the LVMH group is to represent the most refined qualities of Western “Art de Vivre” around the world. LVMH must continue to be synonymous with both elegance and creativity. Our products, and the cultural values they embody, blend tradition and innovation, and kindle dream and fantasy.”
Serves as the “vision”
of LVMH
Commonly associated with
“Luxury”
Why is LMVH so successful in China?
LUCK= Preparation + Opportunity
At the Right Place and the Right Time
Luxury Brand
Chinese people love
Luxury Goods;
China is the world’s biggest luxury market
• China market for Luxury goods is very advantageous for LVMH since Chinese love luxury goods like Louis Vuitton.• LVMH expanded in China where the
Chinese population who love luxury goods is growing.• Only a few competitors were present
when LVMH expanded to China, thus LVMH had the first-mover advantage of luxury brands in China• Region expansion, not country expansion,
made LVMH more flexible and allowed LVMH more options on how and when to expand
Issues on handbags and accessories displaying and not displaying Louis
Vuitton logo
• LVMH is a luxury company and works on uniqueness (as stated in their mission).
Implications of issues on handbags and accessories displaying and not displaying the Louis Vuitton logo• LVMH is no longer viewed as “one-of-a-kind”
since there are a lot of products showing their logo.• LVMH’s status as a luxury brand dropped and
became a common brand for Chinese due to its identical and constant designs of their products.• LVMH’s status as a luxury brand may be
sustained when they used their logo as an accent and not as the pattern or main design of their products – it projected class and elegance, which further promoted uniqueness.
How can LVMH use its strengths to overcome threats
from counterfeits?China has lack of enforcement in
protecting Intellectual
Property Their products are easy to imitate and reproduce
How can LVMH use its strengths to overcome threats
from counterfeits?Focus on
custom made-to-order designs
Capitalize on Quality
SERVICES (especially on the “Maison” invite-only boutiques
Given the backlash in China against Conspicuous Consumption, what
recommendations can you give to LVMH?
Focus on expanding in second and
third tier cities where people still
crave luxury goods
Capitalize on the
uniqueness of LVMH’s
products
Focus on the customization
of products
Diversify the Product Lines
and Mixes
More for more strategy (building on the “brand”)
Offer products in China that are not
offered in other Louis Vuitton international
branches
Improve and Develop the idea of
“Maison” with invitation only floors
Capitalize on Quality Service
Create limited edition bags (ex. A bag that has only 6 stocks avalaible)
• 85% of women in Japan own a Louis Vuitton product
• Japan’s Intellectual Property laws are properly implemented
• Japanese culture hates fakes or counterfeits
• Japanese people encourages ownership of original branded products
EXPAND TO
JAPAN
Reference : Rothermael, F. (2015). Strategic Management. McGraw-Hill Education, New York