Strategic Issues
By 2002, Moet Hennessy Louis Vuitton was the worldпїЅs largest luxury products company, enjoying annual sales of 12.2 billion euros. LVMH carries the most prestigious brand names in wine, champagne, fashion, jewelry, and perfume. Upon entrance of this luxury product industry, LVMH was aware that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, making consumers feel as though they must buy it, or else they will not be in the moment, and thus will be left behind.
The LVMH business portfolio began to take shape in 1987 with the merger between Louis Vuitton and Moet Hennessy which was a four billion dollar merger. Over the course of time, LVMH has acquired over 50 luxury brands, such as Donna Karen, Fendi, and Sephora. They called it, пїЅa collection of star brands and rising stars.пїЅ LVMH found this industry to be timeless and modern, highly profitable, and very rapid growing.
Despite all of the above mentioned, LVMH did experience some bumpy times. Some of these times were induced through internal problems, while others were caused by externalities, like Sept. 11. With such a wide range of product offerings, LVMH was on top of the industry in certain aspects, but has room for growth in other areas. One instance in particular nearly caused a division in the company. Hennessy believed the company should focus on wine, spirits, and champagne, however Vuitton wanted to focus on fashion and leather goods. The decision fell into the hands of Bernard Arnault, who became president of LVMH, and sided with Hennessy.
Analysis and Evaluation
Under Arnault, the company was the worldпїЅs leading luxury product group. Arnault believed that LVMH control of retail chains was critical to luxury brand success. The finer points of retailing were believed to be, influencing of the
Strategic Issues
By 2002, Moet Hennessy Louis Vuitton was the worldпїЅs largest luxury products company, enjoying annual sales of 12.2 billion euros. LVMH carries the most prestigious brand names in wine, champagne, fashion, jewelry, and perfume. Upon entrance of this luxury product industry, LVMH was aware that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, making consumers feel as though they must buy it, or else they will not be in the moment, and thus will be left behind.
The LVMH business portfolio began to take shape in 1987 with the merger between Louis Vuitton and Moet Hennessy which was a four billion dollar merger. Over the course of time, LVMH has acquired over 50 luxury brands, such as Donna Karen, Fendi, and Sephora. They called it, пїЅa collection of star brands and rising stars.пїЅ LVMH found this industry to be timeless
After the case and readings the problems of LVMH there are several problems such as the declining demand for luxury goods because it is linked to political events, situation and social trends. (After the attacks of 9/11 an impact on luxury goods has dropped and had automatically an impact on LVMH sales)
Secondly luxury products are easy to counterfeit, some countries such as china, turkey, and other still have to improve their IPR policies
And finally LVMH diversification strategy (Bernard Arnault) is making acquisitions outside the companyпїЅs sector. In sector where they donпїЅt have the пїЅknow-howпїЅ