LVMH?s Diversification :: essays research papers

LVMHs DiversificationStrategy into Luxury GoodsThe problemAfter the case and readings the problems of LVMH there are several problems such as the declining solicit for highlife 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 guilds sector. In sector where they dont have the know-how and dont match the company Image. The current CEO (Arnault Bernard) is also the major stockholder which makes him easier to make decisions on new acquisitionsThe swot analysisStrengthName recognition which makes them the largest product securities industryplaceTheir experience during the timeLeading position flavor providerDistributi onPublic RelationWeaknessesTheir DiversificationConflict of interest (fashion vs. wine and spirits)Forward and backward integrationLuxury goods are easy to imitate. (Perfumes, Louis Vuitton bags)finance problems net sales decreased by nearly 6% in 2003Declining sharesOpportunitiesMerger and acquisitionConsumer trendsCurrent increase in wealthEmerging marketImprovement of way of selling their large product line (distribution convey)Expansion to other marketsThreats Change in consumer tasteEconomic recessionCompetitor in smaller marketsCounterfeitRecommendationFocus on core businessTo expand the current existing brands geographically. Alliances with new creatorsGain access to distribution channels as a different propositionSell the acquisition which dont fit the company imageImplementationChoose several countries to estimate that is suitable for the luxury market and in order to develop the strategy of the company