Lvmh Strategy Essay

892 words - 4 pages

Executive SummaryLVMH is a luxury goods conglomerate worth investing in. Founded in 1987 with a merger between Louis Vuitton and Moët Hennessy, the company has sustained several years of high growth and profitability. As of 2011, the company had a store network of 2,423 stores across the US, Europe, Asia and other markets. The company employs more than 75,000 people and is headquartered in Paris, France.Its portfolio boasts over 60 prestigious brands in the following categories: fashion and leather goods, watches and jewelry, wines and spirits, publishing and media, perfumes and cosmetics, and selective retailing. Some of the brands include: Donna Karan and Marc Jacobs, Louis Vuitton, Bvlgari, Moët and Chandon, Veuve Cliquot, Hennessy, Parfums Christian Dior, and Sephora. All of the products sold under the LVMH brand are high quality goods that represent status, elegance, and wealth. Therefore, 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 focused because certain individuals can afford and are attracted to the premium priced items.LVMH is differentiated from the competition for several reasons. Some of these include strong leadership, a well-developed and strong brand, and a focus on both tradition and innovation. The company's goals are to continue to diversify its source of revenue and to ensure each individual brand falls in line with the overriding corporate brand personality. These are ongoing goals that have been designed by CEO and Chairman Bernard Arnault. The broad nature of the goals gives the company much leeway in how it achieves them.LVMH's sales have continued to increase. The brands show resilience to the economic climate of the world, as sales and profit have not faltered. In 2011, the brand's value was €18.4 billion and had increased by 23 percent from 2010. Half-year reports and forecasts from analysts indicate LVMH will surpass projections for the 2012 fiscal year.Investment in LVMH is highly recommended. The company proves to be sustainable and highly profitable over extended periods of time, is the global leader in its industry, maintains stability in the wake of constant innovation, and has secured a loyal customer base that continues to grow.LVMH's corporate strategy is a conglomerate diversification with business lines in in fashion and leather goods, watches and jewelry, perfumes, wines and spirits, retail stores and more. While in recent years conglomerates have not been able to sustain high-level performance, LVMH has because its businesses are not so dissimilar that management logic and performance measures won't stretch. LVMH's competitive advantages are what set it apart from the competition. One source of Louis Vuitton's strategic capabilities is in...

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