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    SWOT Analysis of LVMH

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    LVMH is a world wide company that unites under one parent company prestigious brands such as Louis Vuitton, the Moet et Chandon Champagne, the Hennessy Cognac, Christian Dior's perfumes and many other luxury items.

    1. What is your impression of the world wide operation of LVMH?
    2. Conduct a SWOT Analysis of LVMH.
    3. Does LVMH have a competitive advantage and/or a competitive strategy? Justify your answer.
    4. Choose one of LVMH products. Describe the components of this product value chain.
    5. What strategic alternatives are open to LVMH? Explain and justify your answer.

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    1. What is your impression of the world wide operation of LVMH?

    LVMH is a French holding company and the world's largest luxury goods conglomerate. It is the parent of around 60 sub-companies that each manages a small number of prestigious brands. According to the corporate website

    Mission of the LVMH 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. "

    LVMH's worldwide operations are successful as their revenues have grown to $15.3 billion in 2006. Moreover their profits have touched 3 billion euros shown in the following table.

    As we see in the above table the profits have grown every year and in each segment they have performed better in the year 2006. Moreover their brands are revered globally and have remarkable premium image. Currently they possess a unique portfolio of over 60 prestigious brands.


    2. Conduct a SWOT Analysis of LVMH.

    SWOT Analysis is a powerful technique for understanding your Strengths and weaknesses, and for looking at the Opportunities and Threats you face. Specifically, SWOT Analysis is a simple but powerful framework for analyzing your company's Strengths and Weakness, and the Opportunities and Threats you face. This helps you to focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you.
    Let us the discuss SWOT analysis of LVMH:


    Strong Human resource management

    LVMH has today, more than 61,000 employees, 69% of whom are based outside France, share the Group's values. It is successfully headed by Chairman Bernard Arnault who has successfully integrated various famous inspirational brands.

    Moreover its continuously focusing on hiring best of the employees and also have tie up with various management schools. It has developed links with educational organs in order to promulgate a greater knowledge of the Group's professions. For example it has established Chair for luxury brand marketing in 1991, in partnership with ESSEC. It is the sponsor of "A school of art and design - An LVMH company", a project enabling the Group's companies to establish partnerships with art and design schools specializing in their field of activity. Work groups and meetings encourage exchanges between young artists and designers and the companies' operations managers.

    The Group is also a partner of the "Festival International des Arts de la Mode a  Hyares". This festival, held every year in the South of France, gives promising young European designers the opportunity to present their first show to a professional jury. The best shows receive awards.

    The LVMH Asia Program Scholarship is another LVMH Group initiative. Established in conjunction with INSEAD and the Euro-Asia Center, of which the Group is a member, this program is geared towards future graduates. It allows the latter to develop their knowledge of Asian markets and cultures.

    In addition to the LVMH Asia Scholarships, the LVMH Group has sponsored INSEAD's Euro-Asia Center's annual conferences for the past fifteen years. In 2003, all the research presented at the 18th LVMH Conference was related to the theme : "Asia Pacific tomorrow: Problems and perspectives".

    (Adapted from the corporate website of LVMH)

    Community support

    It's regularly involved in various activities of societal benefits. For example its community action includes LVMH House, the LVMH-ESSEC Chair and the LVMH Asia Scholarships - LVMH. The Group is also involved in culture and heritage, humanitarian action, education and supporting young artists and designers.

    Customer Intimacy-Strong Brands

    The degree of customer intimacy, community building, and one-to-one marketing is the forte of LVMH. While it can be argued that it has successfully created a "community feel" with its customers, and by virtue of its value added, comfortable and unique services. Thus we can say that it excels at customer intimacy.

    As discussed earlier it possesses a unique portfolio of over 60 prestigious brands.
    Moreover it has got a retail network of more than 1,800 stores.
    Thus it has become synonymous with the luxury and is growing in each product segments it operates. This has been achieved by continuous innovation and keep customer delight is its main focus.

    Improving Financials

    As discussed above its revenues are more then Euros 15 billion and profits more than Euro 3 billion reflecting strong financials and solid operational performance.


    LVMH has diverse portfolio of 60 popular global brands. Although its having numerous brands, but there are synergies ...