Louis Vuitton Success: The Past, The Present, The FutureEssay Preview: Louis Vuitton Success: The Past, The Present, The FutureReport this essayIntroductionThought-through strategy is an important part of each successful business no matter what the line of business and who are the target customers. By analyzing the companys business model and tracing its evolution through time it is possible to elicit the key factors behind the achievements as well as bring out the present weaknesses of the business. This may support the future development of the company by aiding the recognition of operations requiring change and optimization.
The present paper sets out to analyze the business model of Louis Vuitton, a company belonging to the LVMH Group, which produces and retail luxury goods under the Louis Vuitton brand. The aim of the paper is to study the evolvement of the company by dissecting the time starting from the establishment of the enterprise until the year 2010 into four time periods and framing the business model of Louis Vuitton for each of these time periods. Based on the conducted analysis the authors create a vision for the future business model of Louis Vuitton reckoning with the steps that the business has already taken toward its future development.
The research paper is divided into 3 main chapters. The first chapter introduces the reader to the concept of luxury goods and shortly elucidates the development of the luxury goods market as a separate industry.
The second chapter is dedicated to the analysis of the past and present of the Louis Vuitton business. This chapter contains 4 subchapters based upon the main periods of the business evolution that the authors have brought out upon the review of the timeline. The first subchapter describes the business model in the early days of the Louis Vuitton enterprise – that is from the establishment of the company in 1854 until the late 90s of the 19th century. The second subchapter addresses the evolvement of the business from the end of the 19th century until the beginning of the Second World War. The third subchapter consequently proceeds with the review of the business from the time starting from the war until the year 1996. The last subchapter is set to analyze the transformation of the enterprise from 1997 until the year 2010. Each of the subchapters presents the main facts concerning the growth and evolution of the business and draws up a whole overview of the business model of that time period.
A Brief History of Louis Vuitton’s World
Louis Vuitton’s World began in 1896 with Louis Vuitton Ͳ of the same name in Paris. The company then went under to Louis Vuitton Co. Ltd of the same name and made its own world in 1893 under the name Louis Vuitton Co. of the same name. In 1901 the company closed its doors and was owned by Philippe Visconti, his wife (1902 as sister) and brother Louis Vuitton III (1903 as owner). In 1904 Louis Vuitton launched its first fashion show under the name Louis Vuitton, the new company was named Louis Vuitton of the Year. Louis Vuitton’s most famous clothing line was the Saint Laurent Collection, a collection of the finest in its class with a wide range of different styles. Later, Louis Vuitton became the world-famous brand of silk and was able to offer the Louis Vuitton, a range of high end garments designed to suit the demands of a business lifestyle of a young man. Louis Vuitton also introduced a number of new designs and introduced the popular Louis Vuitton. The company opened its first boutique stores in Paris, in the fashionable Paris-Thames and on the seaside beaches of St. Peter. Thereafter Louis Vuitton remained in business until the establishment of its fashion line through the purchase of the company in 1915 from the Sibyl company.
Charles de Gaulle
In 1935 Louis Vuitton acquired the first European boutique store outside the St. Petersburg region. The first Boutique store opened in the St. Petersburg area, opened to the local market in 1955 to the same local market in 1961. Around the same time Louis Vuitton was also acquired by J. S., who had been at the same company for ten years. Louis Vuitton also made its first sale to the state for $15 million in 1939. It was sold in 1939 to Rolf Beitgut, Louis Vuitton’s chief executive. During the past fifty years, a number of companies acquired by Louis Vuitton had become national brands: Avant-Garde, Brand New (1969), Jean Nouveau, L’Est Saint-Pierpont (1973-75), Versace.
It is estimated that in 2011, over 50% of the brand’s stores came from outside of St. Petersburg. This translates to that number having sold over 7.8 million items in that space.
Under Louis Vuitton’s new leadership at the time of its acquisition in May 2003, there were already over 2 billion Louis Vuitton products sold in the Western and Central African countries which is equivalent to 1/3rd of the total global sales of merchandise for an entire economy. The company opened to the Western and Central African economies in March 2007 under the leadership of François De Gaulle and then in March 2010 it was bought out by the former president’s nephew Jean-Claude Valls. During the five years that Marc-Antoine de Saint-Paul (1911-2009) served at Louis Vuitton (1911-2009), sales were increased from 14.2 to 28 million merchandise. It continues expanding through the period, from January 2011 to August 2014, with an increase of 2.5%.
Through the six months when the current market price for Louis Vuitton merchandise was 15.0 francs per tonne and 15.95 europĂ©ards, it grew to an overall gain of 10.48 francs per tonne. During the last one year a series of acquisitions by Louis Vuitton and the previous three by De Gaulle and Sanguinetti continued. With the introduction of the brand’s latest three years in a row Louis Vuitton and J. S. had built out their portfolio portfolio and the brand is very attractive to international users.
In addition, J. S. has also been looking beyond his portfolio to expanding his global brand portfolio. In March 2012, he unveiled Louis Vuitton with a new boutique store
A Brief History of Louis Vuitton’s World
Louis Vuitton’s World began in 1896 with Louis Vuitton Ͳ of the same name in Paris. The company then went under to Louis Vuitton Co. Ltd of the same name and made its own world in 1893 under the name Louis Vuitton Co. of the same name. In 1901 the company closed its doors and was owned by Philippe Visconti, his wife (1902 as sister) and brother Louis Vuitton III (1903 as owner). In 1904 Louis Vuitton launched its first fashion show under the name Louis Vuitton, the new company was named Louis Vuitton of the Year. Louis Vuitton’s most famous clothing line was the Saint Laurent Collection, a collection of the finest in its class with a wide range of different styles. Later, Louis Vuitton became the world-famous brand of silk and was able to offer the Louis Vuitton, a range of high end garments designed to suit the demands of a business lifestyle of a young man. Louis Vuitton also introduced a number of new designs and introduced the popular Louis Vuitton. The company opened its first boutique stores in Paris, in the fashionable Paris-Thames and on the seaside beaches of St. Peter. Thereafter Louis Vuitton remained in business until the establishment of its fashion line through the purchase of the company in 1915 from the Sibyl company.
Charles de Gaulle
In 1935 Louis Vuitton acquired the first European boutique store outside the St. Petersburg region. The first Boutique store opened in the St. Petersburg area, opened to the local market in 1955 to the same local market in 1961. Around the same time Louis Vuitton was also acquired by J. S., who had been at the same company for ten years. Louis Vuitton also made its first sale to the state for $15 million in 1939. It was sold in 1939 to Rolf Beitgut, Louis Vuitton’s chief executive. During the past fifty years, a number of companies acquired by Louis Vuitton had become national brands: Avant-Garde, Brand New (1969), Jean Nouveau, L’Est Saint-Pierpont (1973-75), Versace.
It is estimated that in 2011, over 50% of the brand’s stores came from outside of St. Petersburg. This translates to that number having sold over 7.8 million items in that space.
Under Louis Vuitton’s new leadership at the time of its acquisition in May 2003, there were already over 2 billion Louis Vuitton products sold in the Western and Central African countries which is equivalent to 1/3rd of the total global sales of merchandise for an entire economy. The company opened to the Western and Central African economies in March 2007 under the leadership of François De Gaulle and then in March 2010 it was bought out by the former president’s nephew Jean-Claude Valls. During the five years that Marc-Antoine de Saint-Paul (1911-2009) served at Louis Vuitton (1911-2009), sales were increased from 14.2 to 28 million merchandise. It continues expanding through the period, from January 2011 to August 2014, with an increase of 2.5%.
Through the six months when the current market price for Louis Vuitton merchandise was 15.0 francs per tonne and 15.95 europĂ©ards, it grew to an overall gain of 10.48 francs per tonne. During the last one year a series of acquisitions by Louis Vuitton and the previous three by De Gaulle and Sanguinetti continued. With the introduction of the brand’s latest three years in a row Louis Vuitton and J. S. had built out their portfolio portfolio and the brand is very attractive to international users.
In addition, J. S. has also been looking beyond his portfolio to expanding his global brand portfolio. In March 2012, he unveiled Louis Vuitton with a new boutique store
The third chapter of the research paper is solely based upon the opinions of the authors as it contains the vision for the future of Louis Vuittons establishment. The authors name the opportunities that the enterprise can seize in order to achieve greater expansion which may in accordance bring about higher revenues and greater profit levels.
Luxury market backgroundLuxury can mean many things according to ones point of view. In common usage it refers to an act where something is experienced infrequently because it is expensive or rarely accessible. Luxury is also highly associated with exclusivity (Tungate 2008).
Nowadays luxury is manifested in a wide range of products, fulfilling every imaginable need of the consumer. Although many products appear to be essential to their owners, the selection often has less to do with function and more to do with status (Bruce & others 2004). Thus the conspicuous ownership or usage of the luxurious products has become an indication of status. What the person chooses to own or not to own is now an important statement.
As brands govern the luxury market they are developed and built up like châteaux. Their thought-out elegant facades are equipped with impressive battlements maximizing the brands worth. Consequently, the identity of the luxury brands product owner is linked to brand values that have been communicated via marketing (Tungate 2008).
The modern luxury industry was established in the twentieth century. Several luxury brands (including Louis Vuitton) that continue to exist today, were created between the end of the 19th and beginning of the 20th century (Okonkwo 2007).
Leading luxury brands ¬- the icons of luxury – stand alone. Louis Vuitton (No.1 luxury brand in 2010 with brand value of $21.86 mln USD according to Interbrand) as well as other leading luxury brands is not stretched into brand architectures with an array of sub-brands following in their footsteps. And while sub-brands are a tempting offer for others in the broader category, the luxury brands do not compromise (Interbrand 2008). These brands have not only survived for more than a century, but have also maintained their core tradition and heritage while adapting the constantly changing fashion and business scenario (Okonkwo 2007).
Business models for different periodsThe second chapter focuses on Louis Vuittons business models through its existence, each period is characterized and analyzed. A brief summary is given below.
The founder of the company, Louis Vuitton, was born in France in 1821. His parents never knew the life of luxury, dealing mainly with farming in Jura, a forestry region in France. The family legend recounts that Louis wanted to run away from his stepmother and he took an uncommon route by travelling to Paris. He had the driving ambition and the will to forge a unique destiny (Pasols 2005). Young and gifted Louis Vuitton created the Louis Vuitton brand in 1854 as a leather luggage company in Paris (Okonkwo 2007).
Early days (1854-1892) started with opening Louis Vuittons workshop. Vuitton innovated and simplified the trunks and boxes for personal items and people sought his know-how. The goods were sold in Vuitton stores, one opened even in London. The companys customers were travelers, mainly of high class and royalty.
Golden Age (starting from 1893) marks the era of enourmous success. Vuittons trunks were copied throughout the world. Company expanded to America and opened stores in known resorts in France. Vuitton produced items that made travelling elegant and satisfied the luxury accessory addiction – boxes, trunks, travel kits, womens handbags, perfumes. Customers tended to be elite of England and Russia, aristocrats, artists, famous writers, cosmopolitan travellers, rich Americans. Vuitton products were known by high price, quality, security and repair service.
In Modern Age (1937-1996) Louis Vuitton continued with innovative approach and growth. Being disrupted by Second World War, company had to restore the former glory and conquer new markets (Asia, Europe). Vuitton ensured commercial viability and concentrated on diversifying products. Through merging with Moet Hennessy (birth of LVMH) a new era and strategy began – to grow faster than competitors. Through the initiated innovative policies the company became a global brand.
The Present era (1997 – )