LVMH?s Diversification :: essays research papers

LVMHs DiversificationStrategy into Luxury GoodsThe conundrumAfter 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 schema (Bernard Arnault) is making acquisitions outside the companys sector. In sector where they foolt have the know-how and dont match the company Image. The topical CEO (Arnault Bernard) is also the major shareholder which makes him easier to make decisions on freshly acquisitionsThe swot analysisStrengthName recognition which makes them the largest product grocery storeTheir experience during the timeLeading positionQuality provider dispersionPubl ic RelationWeaknessesTheir DiversificationConflict of interest (fashion vs. wine and spirits) anterior and backward integrationLuxury goods are easy to imitate. (Perfumes, Louis Vuitton bags)Finance problems lettuce sales decreased by nearly 6% in 2003Declining sharesOpportunities nuclear fusion reaction and acquisitionConsumer trendsCurrent increase in wealthEmerging commercialiseImprovement of way of selling their large product line (distribution channels) working out to other marketsThreats Change in consumer tasteEconomic recession opponent in smaller marketsCounterfeitRecommendationFocus on upshot businessTo expand the current existing brands geographically. Alliances with new creatorsGain assenting to distribution channels as a different proposition cover the acquisition which dont fit the company image murderChoose several countries to enter that is suitable for the luxury market and in order to develop the strategy of the company