LVMH - PowerPoint by liwenting

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									Luxury Goods Industry
Situational Analysis

          Presented by:
         Victoria Dinkins
            Trion King
    Luxury Goods Industry
Definition of Luxury Goods Industry
  Excellence, Superior Service
  Elite Population
  Fragmented Industry
  22% of worldwide industry sales
  Major Competitors:
     Louis Vuitton Moet Hennessy
     Gucci
     Richemont
     Bulgari
     Hermes
    Obsession with excellence in every
         luxury-goods company
    E-Commerce/Net-Enhanced
         Organization
Internet/World Wide Web
    Makes it easy to market products
    overseas
    Speeds up globalization
    Aims to transform customers into
    “connoisseurs”
    Allows for accessible information
       establishes ties between consumers and a
       brand, and enhances persuasion

Internet = Communication = More Informed Buyer
      Threats & Opportunities
        e-Commerce/NEO
Needs considerable local adaptation
  retailing is still very localized
Informality, community spirit, openness –
similar to flea market
  position between mass advertising and personalization is
  a real challenge
Lacks necessary quality of attention to
detail
Impersonal communication
Allows companies to build long run
relationships with customers
  converging possibility between internet user profiles and
  the luxury consumer
    Economic Globalization &
         Outsourcing
Unconventional approaches to managing a
multinational business
Manage business in various countries as a
single system
International acquisitions
  LVHM – U.S. fragrances and cosmetics
Less dependent on outsourcing or
licensing
  move production capacity to China
Emerging markets equal to 7% to 9%
Asian markets constitute 7% of global
sales
Sales in Japan equals 38% of the industry
     Threats & Opportunities
Economic Globalization/Outsourcing
 Outsourcing labor has perception of
 cheaper products
 Rising costs deteriorated margins
   value-added taxes driving Chinese
   prices up 30%
   high acquisition costs
 Maintaining image and reputation
 Threat of substitutes
QUESTIONS

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