Louis Vuitton Case

In: Business and Management

Submitted By besjim
Words 2171
Pages 9
Louis Vuitton Case

1. According to HSBC in February 2009, Japan was the final destination of 45 percent of luxury goods sold worldwide. According to Claudia D’Arpizio, Japan is the world’s largest market, consisting of the highest per capita spending for luxury goods. Japan is known for a group-oriented culture, which creates pressure for its citizens to possess luxury, status-driven products such as Louis Vuitton (LV). This makes the Japanese luxury market easily penetrated by new and innovative fashions. According to Davide Sesia, president of Prada Japan, Japanese Women, to a much greater extent than Europeans have a “psychological need to own something considered to be beautiful”1. In the late 1990’s, LV created limited- edition collections to claim a prestigious role. This was their marketing strategy to gain the attention of their upper class customers which reinvigorated the brand identity as well as earning them market share. In addition, Japanese people are considered to spend more time out of their residences than any other culture. In Japan, looks are a direct correlation to a person’s social position, which persuades Japanese to shop for luxury items.

Quality is a key factor for successful brands in Japan. LV has a focus on constant improvement of quality and offer lifetime repair guarantees for its products. In 1996, Azzedine Alaia, Manolo Blahnik, Romeo Gigli, Helmut Lang, Isaac Mizrahi, Syvilla and Vivienne Westwood were hired to create a limited edition series featuring the Louis Vuitton monogram. Also, in 1998, designer Marc Jacobs, a successful American international designer was hired to be their new art director to insure their shoes and ready-to-wear collections were desirable to consumers. Its loyalty based strategy provides customers with maximum quality, creating an endless desire in LV products. Due to the desire for…...

Similar Documents

Louis Vuitton Case Study

...Table of Contents 1.0 CASE SUMMARY 1 2.0 PROBLEM STATEMENT 2 3.0 INDUSTRY ANALYSIS 3 3.1 Market Segmentation3 3.2 Target Audience3 3.3 Market Positioning4 3.4 Competitor Analysis5 4.0 COMPANY ANALYSIS 6 4.1 4P Analysis6 4.2 POD and POP Analysis10 4.3 Market Analysis10 4.4 SWOT Analysis12 4.5 PESTEL Analysis14 5.0 STRATEGIC ALTERNATIVES20 6.0 RECOMMENDATION23 7.0 ACTION PLAN24 8.0 CONTIGENCY PLAN28 9.0 REFERENCES28 1.0 CASE SUMMARY In recent years, modern customers are no longer acquiring shopping only for their goods and services. Nowadays, these customers are buying for different reasons such as to show off their personality, to boost self esteem or to satisfy physiological needs. Shopping good brands like Louis Vuitton, Gucci, Channel and other luxury brands is like a form of self expression and gives people a sense of accomplishment. Louis Vuitton or famously known by its acronym LV, is known for world’s most valuable luxury brand. It was founded by Louis Vuitton Moet Hennesy (LVMH) in 1854 on Rue Neuve des Capuccines in Paris, France. The historical journey began when Vuitton found out traveller trunk were easily stacked. He was made famous for crafting the luggage for Napoleon. This company is famous for its luxury products such as trunks and leather goods to ready to wear, footwear, watches, jewellery, accessories, sunglasses and books. Louis Vuitton stands out more among other brands through their relentless focus on product quality...

Words: 9151 - Pages: 37

Louis Vuitton Case

...|   | Commentaires / formules |   |   | Commentaires / formules |   |   | Coûts logistiques |   |   | Hyp 1 (situation actuelle) (situation actuelle) |   | Hyp 2 (frêt aérien) | | CA Total |   | 3 800 | en M€ |   | 3 800 | en M€ | | Prix de revient | | 0,15 | en % | | 0,15 | en % | | | 15%*CA Total | 570 | en M€ | 15%*CA Total | 570 | en M€ | | Coût logistique |   | 0,13 | en % | Doublement des coûts | 0,26 | en % | | | 13%*Prix de revient | 74,1 | en M€ | 26%*Prix de revient | 148,2 | en M€ | Structure du CA |   |   | Hyp 1 (situation actuelle) |   | Hyp 2 (frêt aérien) | | Marge opérationnelle | La marge opérationnelle de Louis Vuitton est de 45% | 0,45 | en % |   | 0,45 | en % | | CA Maroquinerie | La marge opérationnelle de l'activité Maroquinerie est de 87% de l'entreprise Louis Vuitton | 0,87 | en % du CA Total |   | 0,87 | en % du CA Total | | | 87%*3800 | 3 306 | en M€ | 87%*3800 | 3 306 | en M€ | | Part des produits classiques |   | 0,8 | en % |   | 0,8 | en % | | CA maroquinerie "produits classiques" | 80%*3 306 | 2 644,8 | en M€ | 80%*3 306 | 2 644,8 | en M€ | | CA maroquinerie "produits mode" | CA Maroquinerie-CA "Produits classiques" | 661,2 | en M€ | CA Maroquinerie-CA "Produits classiques" | 661,2 | en M€ | | Autres "produits mode" | Pourcentage restant 13% | 0,13 | en % du CA Total | Pourcentage restant 13% | 0,13 | en % du CA Total | | | 13%*3800 | 494 | en M€ | 13%*3800 | 494 |......

Words: 1138 - Pages: 5

Louis Vuitton in Japan Case Study

...Louis Vuitton is the world’s biggest luxury brand for bags and accessories. It was established in France, Europe in year 1854. Louis Vuitton brand and company is an international well-established firm named after the founder and designer Louis Vuitton. Following the death of Louis Vuitton in 1892, his son, Georges Vuitton took over the leadership of the firm. He was ambitious about taking Louis Vuitton to the next step — building a global brand and setting up a multinational corporation. In year 1885, LV opened its first oversees store in London. In 1936, Gaston-Louis Vuitton took over the direction of the company when his father, Georges Vuitton, passed away. He guided the brand into its modern age. The company expanded its product line by applying the craftwork and design of its leather to small leather goods. In the mid 1970s, Louis Vuitton had become the world’s biggest luxury brand in terms of market share. Louis Vuitton entered Japanese market in year 1968, and it came the most popular luxury brand in Japan. In year 1970, LV opened its first stores in Japan, which had revenue of $1 Million on its first day. By 1977, the company owned two stores in Japan with annual profits of US$10 million Until Louis Vuitton, the strategy for business in Japan for multinational companies was to send their products through Japanese distributors. LV was the first company that took different approach and strategy of opening its own store in Japan. LV also hired Japan’s top......

Words: 2215 - Pages: 9

Louis Vuitton Case Study

...Introduction: We The A-Team are going to explain how Louis Vuitton, the world renounded luxury brand with a long history of producing luxury goods has left its mark on the world. Louis Vuitton started out as a single product brand of making leather bags which were all handmade. As Shin-Fen Chen states, “Louis Vuitton combined the artistic creativity of its designers with a rigorous management of resources to produce brands that were the most profitable in the world in the luxury genre.” Since the company’s creation, time has shown people will spend the extra money for the extra benefits that the handmade luxury leather bags provide them. Louis Vuitton has gained success due to communication and expertise between managers and designers. They currently have four business segments which include an array of goods. These goods consist of wines and spirits, watches and jeweler, perfumes and cosmetics, and fashion and leather goods. (Chen, 2008) Also, the brand has expanded into new markets, the two largest being the United States and Europe. We are going to dig deeper and see how this well-oiled machine we call Louis Vuitton functions. Question: 1. Why do people buy luxury goods? In analyzing why people buy luxury goods we can break down the people’s reasoning for doing so into several different categories. First we look at what a luxury good entails. A luxury good is not a good necessary to live, but it is viewed as a desired item by the society that the people......

Words: 1233 - Pages: 5

Louis Vuitton Case

...LOUIS VUITTON IN JAPAN -CASE #14 REVIEW LOUIS VUITTON IN THE JAPANESE MARKET ABSTRACT The purpose of this paper is to review the Louis Vuitton business model and the success experienced in the Japanese marketplace. This paper will discuss opportunities and challenges that have been realized by the Louis Vuitton brand while located in Japan, and the specifics to the Japanese luxury market. A review of how the Louis Vuitton brand first entered the Japanese marketplace, the cultural aspects related to social status and luxury goods, which that have helped with the sales growth for the company’s products. Along with tactics embraced later on to strengthen its brand will also be reviewed. The appeal of the Louis Vuitton luxury high priced product, and how the French company’s image helped to sell itself to Japanese consumers with disposable income will be analyzed. The success of various marketing strategies, utilizing the images of actresses to help launch a successful sales campaign will be reviewed. Along with a review of the company’s success by working with various fashion designers to create colorful fashion trends with Japanese inspired themes, through the collaborative work with well-known Japanese artists. The global recession, its effect on the Louis Vuitton product line and sales will be analyzed along with new challenges the company faces for the future. Finally, a discussion on the future success for...

Words: 2754 - Pages: 12

Analyze of Louis Vuitton Case Study

...Overall strategy of LVMH LVMH’s website states the following as their missiom statement, “The mission of the LVHM 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. “ In 1987, Racamier agreed to a merger with Moët Hennessy, a company that was much more larger than LV, to form the Moët Hennessy Louis Vuitton group. Bernanrd Arnault, ranked as the fourth richest man in the world ( by Forbes, 2007) , was invited to invest in LVMH by the company’s chairman, Henri Racamier. Investing through a joint venture, Arnault ousted Racamier in 1990 and started to sweep a slew of fashion companies into the LVMH fold. Arnault is the chairman and Chief Executive Officer of Lvhm since 1989. Moët Hennessy-Louis Vuitton (LVHM) ; a world leader in high-quality products, possesses a unique portfolio of over 60 prestigious brands. The Group is active in five differentsectors: -Wines & Spirits -Fashion & Leather Goods -Perfumes & Cosmetics -Watches & Jewlery -Selective retailing First of all, the target audience is comprised of well to do individuals with high disposable incomes. Demographics of this target audience have some variability based on cultural differences in different geographical locations. The target audience is relatively......

Words: 850 - Pages: 4

Louis Vuitton- a Case Study

...3/14/2013 JITESH ANAND 10IB-033 CASE STUDY: LOUIS VUITTON IN INDIA Louis Vuitton in India | Jitesh Anand 1. INTRODUCTION: Luxury Brands in India If it was few decades ago, there was a very limited scenario one could see with respect to the luxury market in India. Those days luxury market was associated with the rich class and with very few upper-middle class people. However, with the involvement of number of international luxury brands in the country, the shape of the luxury market in India has undergone a dramatic transformation. When it comes to the word luxury it is mostly misunderstood with the meaning beyond the reach of common man. With every year passing by, the so called beyond the reach of common man is proving to be a false fact. Luxury products are becoming the necessities not only for the rich class or upper middle class but also for the middle class people. Luxury market in India is build up on basic four elements which are quality, value for money, customer satisfaction and the most important creativity. In order to be successful in Indian market luxury brands should be able to sustain and fulfill these criteria on a long term basis. The Indian luxury market is growing at a rate of 25% which simply implies the consumption of luxury products has been increasing at a fast pace. India is becoming the new destination for luxury brands across the globe and Indian government opening Foreign Direct Investment (FDI) in retail has resulted in many......

Words: 3072 - Pages: 13

Louis Vuitton Case Analysis

...Louis Vuitton Case Analysis Key Issue Louis Vuitton is a flagship group of LVMH, which had double digit growth during 2010 and 2011. Michael Burke, the new CEO of LV group is uncertain about whether the group can grow sustainable. The main issue he current encounter is that how to push LV to grow steadily and protect LV’s values and heritage from being undermined. External Analysis PESTEL Analysis Political: The global luxury goods market can separate into America, Europe, Japan, Asia-Pacific, and rest of countries by region. Overall, the major luxury goods consumption countries have relatively stable political environment in recent years. However, in southern Europe, the governments’ financial turmoil and austerity measures indicated an underlying weakening demand of luxury goods for local people. But the gap was filled by travelers from other countries. The import duty policy in different countries is another factor should be considered in the industry. The high import duty will be part reason of high price differences between different countries. Consequently, the grey market can be formed in the countries which have high price differences. Economic: The major companies in this industry are based in Europe, so the euro exchange rate will be an important factor to the industry. The growth rate will be different by being measured with euro terms and nominal terms. In order to eliminate the exchange rate......

Words: 1626 - Pages: 7

Louis Vuitton and Gucci Case Study

...Case Study Competitive advantage at Louis Vuitton and Gucci MEMO The market of high fashion luxury goods presents US$165 billion of annual sales and gross profit margins of over 50 per cent. The leader company seems to be LVMH fashion house, with US$12billion of sales, followed by Richemont with US$3.6 billion and Gucci Group with US$2.4 billion. According to the text, the key activity of those companies is the preparation and display of new collection for their bi-annual fashion show. Analysing each activity which constitutes the value chain, I can say that: * Suppliers – the co-ordinating company has a relatively important function, since it works closely with the designer in determinant aspects (such as colours, patterns among others) of the collection’s design. The Chinese and Italy co-ordinating associated company’s which supplies and dye, spin and weave the silk, respectively,are not so important, because is the designer’s work at fashion house that creates the main value – final collection design instead of components supplied. BALANCE=LOW/MEDIUM VALUE ADDED * Inbound Logistics – there are many imports and the goods arrive at the fashion house not using an exclusive method. BALANCE=LOW VALUE ADDED * Operations – is about working on final product, which is design and manufacture of each haute couture dress. Here, the name of the designer is a crucial element, since the fact she or he is famous add a large value, but specialized seamstresses who cuts and......

Words: 892 - Pages: 4

Louis Vuitton Case Study

...Louis Vuitton in India Executive Summary Louis Vuitton Moët Hennessy, the world’s leading luxury brand, made the decision to formally enter India in 1999. India was a familiar market for Louis Vuitton as the company had filled custom orders from maharajahs since the late 19th century. However, the Indian market was unlike any in which the company was currently operating. The changing socio-economic conditions of the developing nation opened up opportunities for the brand but also posed unique challenges such as changing customer profiles and concepts of luxury. In the West, luxury goods are often sold through company-owned stores in a luxury retail cluster spread over several blocks, usually in a city’s downtown core. In cities that did not have luxury retail clusters, Louis Vuitton operated in luxury malls. Previous attempts to develop premium retail space in India had not been successful. Nevertheless, several real-estate entrepreneurs had plans to open an estimated 300 luxury malls in India by 2010. In India, Louis Vuitton’s first two stores were introduced in luxury malls in New Delhi and Mumbai targeting customers who had shopped abroad and were familiar with the brand. The company was now looking to increase its reach and teamed up with other global brands to develop luxury malls in five Indian metros. Does a high-end brand have a market in a low income country? According to the National Council of Applied Economic Research, in 2001-02 there were 20,000......

Words: 2043 - Pages: 9

Louis Vuitton Case Study

...Task specification Read the real business situation analysis for Louis Vuitton below. Voice of the Customer from Louis Vuitton Shoppers By Sampson Lee on January 29, 2009 If you ask people what they think about the Louis Vuitton shopping experience—and we did—you hear a lot about Service. Below are real comments from people who took a survey we organised with CustomerThink on the Louis Vuitton shopping experience. "No one bothered to greet me other than the security guard at door!" "I guess I did not fit the image - I was not wearing all labels." "Messy store, impolite sales assistants and poor attention to customers." "Long queue, slightly condescending assistant - not the VIP experience it should be." "I don't look like a typical LV customer, so the salespeople were in a hurry to have me out of 'their' store as fast as possible." Figure 1 breaks down the attributes customers like the least about their shopping experience at Louis Vuitton stores. We collected 2,318 valid responses across the globe. And, as you can see, Servicing Attitude was the No. 1 attribute (39 %) respondents like least about the Louis Vuitton shopping experience; the No. 2 attribute had to do with thePrice/Value issue (21 %). . (Source: http://customerthink.com/what_drives_customers_buy_louis_vuitton/) Assume you are a marketer of Louis Vuitton. 1. Perform an analysis to solve the CRM problem mentioned above. Your analysis should include: ......

Words: 465 - Pages: 2

Louis Vuitton in Japan Case Study

...Unit Four Case Study Analysis Kaplan University School of Business MT460 Management Policy and Strategy Author: Jessica Rushing Professor: Dr. Andryce Zurick Date: May 18, 2015 Louis Vuitton in Japan Company Name: Louis Vuitton Topic of the Week: External and Global Environment Synopsis of the Situation As of 2009, the Japanese market accounted for 45 percent of all luxury goods sold globally (Pearce & Robinson, 2013, p 14-11). Louis Vuitton preemptively identified Japan as a location that would help boost sales and brand loyalty, opening its first store in Japan in 1977 (Pearce & Robinson, 2013, p 14-14). The brand is facing some challenges as it attempts to continue seeing growth in the Japanese market. These challenges include competition, reduced location product availability, and counterfeit products to name a few. Due to the fact this country currently accounts for a large percentage of luxury goods being sold, the competition is at an all time high. Louis Vuitton faces challenges while battling rivals such as Bulgari, Gucci, Coach, and similar companies. Competition in the marketplace is a strong component of any company’s external environment. According to our text, an external environment includes, “the factors beyond the control of the firm that influence its choice of direction and action, organizational structure, and internal processes (Pearce & Robinson, 2013, p 87). In addition, Louis Vuitton has limited its......

Words: 1382 - Pages: 6

Louis Vuitton

...CASE SYNOPSIS This case study deals with the opportunities and challenges of Louis Vuitton, the leading European luxury sector multinational firm, in Japan, the second largest economy in the world. The case illustrates the business strategy of Louis Vuitton in an important market, taking into account the unique features of brand management, and integrating culture and consumer behaviour in Japan. In the last decade, Japan has been Louis Vuitton’s most profitable market, representing almost half of its profits, but it seems that the global economic crisis has resulted in a decline in sales. Other European brands in the luxury and fashion sectors have also been generating one third of their profits from Japan. Facing a weak economy and a shift in consumer preferences, Louis Vuitton has been adapting its unique strategy in the Japanese market, taking into account consumer behaviour patterns. The days of relying on a logo and charging a high price seem to be gone as there is more interest in craftsmanship and value for money. To promote sales, the company has had to launch less expensive collections made with cheaper materials. The brand has also been opening stores in smaller cities, where the lure of the logo still works. Louis Vuitton may be French, but Japan has become a land full of Louis Vuitton lovers. Over the years, Japanese consumers have demonstrated fascination with and passion......

Words: 329 - Pages: 2

Louis Vuitton

...Louis Vuitton Analysis Mary Askew American Public University Abstract Louis Vuitton is a brand of luxury items. It was started by an avid trunk makers and is now currently the top luxury brand provider for the tenth year straight. Louis Vuitton has been able to sustain its leadership in this competitive field by being innovative and garnering the best team the company can have. The leaders keep close tabs on the inner workings and control all aspects of products from manufacturing to sales.They are always looking to expand and increase market share. This paper will take a look at how Louis Vuitton maintain such a strong presence on the global stage. Louis Vuitton Analysis Louis Vuitton’s Business Model Luxury brands, generally speaking, have not fared well during the past few years. The industry (luxury items) declined by billions of dollars. Writers for luxurydaily.com said the “air of rarity” was in peril. The global recession put luxury markets in a downward spiral. That is, except for Louis Vuitton (LV) and Chanel. The LV brand held onto the number one spot it has held for the past ten years. This year has seen an increase in profitability upwards of 16 percent, almost triple that of 6 percent last year. (King, 2015) The Louis Vuitton business model implements innovative and alluring ways of capturing new audiences. For instance, the company added social media and the likes of snapchat to their traditional modes of marketing. The management company for the......

Words: 1268 - Pages: 6

Louis Vuitton

...concern for Louis Vuitton’s stock in the near term. v  Louis Vuitton is undertaking a transformation strategy to evolve into a global lifestyle brand anchored in accessories. However, we believe this transformation will take at least a few more quarters to reap the desired results. v  Increased private label offerings by wholesale customers also increase the competition for Louis Vuitton.  BARGAINING POWER OF CUSTOMERS: LOW v  Louis Vuitton sells through both, the direct-to-consumer channel and the wholesale channel. The direct channel, which includes Louis Vuitton operated stores and e-commerce sales accounted for around 89% of its total sales in fiscal 2012. v  Since wholesale customers account for only around 10% of the total sales, we believe their bargaining power is limited. v  We think the bargaining power of end-customers is moderate. Louis Vuitton has positioned itself as an exclusive luxury brand and enjoys strong brand recognition due to its high quality products. v  We believe that the customers’ bargaining power will remain low in the future as Louis Vuitton’s efforts to reinvigorate its brand appeal will be offset by rising competition in the market. THREAT OF NEW ENTRANTS: LOW                               v  To start up a new brand, significant capital expenditure is required for marketing and floor space. v  Brand recognition and loyalty are among the main factors that drive middle-to-high income earners towards luxury companies such as Louis......

Words: 1149 - Pages: 5