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EXECUTIVE SUMMARY
Louis Vuitton Moet Hennessy (LVMH) is the largest multinational corporation within the Luxury
Fashion Industry. It was founded in 1987 with the merger of Moet Hennessy and Louis Vuitton, the
worlds leaders in premium luggage, champagne and cognac. Since then, they have developed a broad
portfolio of 70 smaller companies, referred to as houses or maisons. consisting of both heritage and
contemporary brands with a product mix spanning across all five major industry sectors. As a whole,
LVMH operates 3,948 stores across 70 countries, employing 134,476 people (Appendix 5), with
Despite having such a dominant presence with in the Luxury Industry, there are many external macro-
environmental factors that have a huge impact on LVMHs ability to generate profits and maintain their
competitive advantage. Some of these key factors include; the political and economic uncertainty and
social unrest surrounding the recent global government elections, Brexit decision, terrorism and Global
Financial Crisis, the changing retail landscape as a result of innovative technologies and the modern
consumer, the growing concern for environmental sustainability and CSR initiative, and the global
saturation of counterfeits diluting brand integrity and market share as a result of insufficient regulation
and legislation. Similarly, industry attractiveness factors impacting LVMHs ability to achieve desired
operational results include; the inability for suppliers and consumers to adjust prices resulting in stable
operating margins, the high levels of competition, moderate threat of new entrants and increased
substitution from affordable luxury retailers restricting expansion and growth in market share.
LVMH must consider these factors when in order to determine key current and future opportunities for
LVMHs portfolio analysis highlights their main strengths and weaknesses across the product divisions
and reflects appropriate future corporate strategy recommendations in response. LVMHs Fashion and
Leather Goods operations are their most lucrative, attributing to 34% of total company revenue in 2016,
however, achieved a low growth rate of only 2% due to high competition, indicating that they should
invest in strategies to protect and strengthen this current position whilst increasing profitability through
selective expansions and acquisitions. Their Selective Retailing and Other Activities is their second
highest revenue source and achieved the most growth overall by monopolizing gaps in the market across
different industries, indicating that LVMH should continue to rapidly invest in these Blue Ocean
growth strategies in order to maintain their strength and further increase their market share.
LVMH remain market leaders in their Wine and Spirits division by maintaining their high operating
margins and should continue to increase profitability through increasing productivity in this sector.
Their Perfume and Cosmetics division has achieved an ideal position within its sector, indicating that
LVMH should continue to manage their current strengths whilst utilising the mass market growth
strategy to invest in low risk expansions in order to increase their future revenue and market share. As
the weakest division in the portfolio, Watches and Jewellery has low profitability due to increase in
more affordable luxury watches from competitors, therefore LVMH should continue to reduce costs and
Whilst there are many variables impacting the global luxury fashion industry, LVMH is a very
successful multinational conglomerate with strong competitive advantage and industry positioning,
having managed to expand and maintain their leadership through vigorous planning and implementation
TABLE OF CONTENTS
1.0 INTRODUCTION 1
2.O ANALYSIS 3
2.1.1 Political 3
2.1.2 Economic 3
2.1.3 Social 4
2.1.4 Technological 4
2.1.5 Ecological 5
2.1.6 Legal 5
2.3.1 Threats 8
2.3.2 Opportunities 9
2.3.2 Weaknesses 10
2.3.1 Strengths 10
2.4.2 Selective Retailing and Other Activities 12
3.0 RECOMMENDATIONS 13
REFERENCES 17
APPENDIX 18 - 23