Louis Vuitton Moët Hennessy - Grupo_8_Final 120609.pptx

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LOUIS VUITTO

MOËT

HENNESSY

EXPANDING

BRAND

DOMINANCE ASIA

Case Report

GLOBAL MBA

Centrum-Tulan

June, 2009





I. BRIEF INTRODUCTION OF

THE SITUATION

•

The French company Louis Vuitton MHennessy (LMVH) was created in 1987 the merer o! Louis Vuitton" a #u$ury ooma%er" and Moët Hennessy " a premspirits company

• &n 1971 Moet 'handon #eadin manu!atuo! champane mered with Hennessy #eadmanu!acturer o! conac

• &n 1987 Henry ecamier" '* o! LVM

in+ited !rench entrepenuer ,ernard -rnau#tin+est in the new#y !ormed con#omera-rnau#t ac/uired 02 o! LVMH" i+in



•

The House o! Louis Vuitton was !ounded184. &n per!umes and cosmetics and!ashion" the companies" were created mrecent#y" ha+e cu#ti+ated their internatistandin o+er a number o! years. 5ue

oes bac% to 1809" 'hristian 6ior 15i+enchy was !ounded in 1941.

• o in !act it was a series o! succesmerers" moti+ated by the anity o! their

businesses" which #ed to the estab#ishmenthe LVMH roup.

• &n 0: the roup had re+enues o! o+er


THE SITUATION



I. BRIEF INTRODUCTION OF THE

SITUATION

•

The 5roup is acti+e in <+e di=erent sectors> –3ines ? pirits"

–Fashion and Leather 5oods"

–@er!umes ? 'osmetics."

–3atches ? Aewer#y

–e#ecti+e retai#in• ach o! the roups contained a number o! reconiBabrand names that were each simbo#s o! the C ood C inc#udinD 'hristian 6ior" T-5 Heur" 5i+enchy" 6om@erinon" Moët 'handon and ephora.

• &n the #u$ury product business" brands are a compamost important asset.


THE SITUATION






SITUATION

•

'ompetition in the &ndustry.• 5ucci" ichemont" ,u#ari and Hermes wethe mayor competitors in the #u$ury oods

• LVMH and ,u#ari were mayor p#ayers in

-sia@aci<c reion" whi#e ichemont andHermes dominated urope.

• 5ucci was a we##entrenched p#ayer in bourope and Gorth -merica" and had been

bui#din a stron presence in Aapan.


THE SITUATION




SITUATION

•

For decades the LVMH roup had a stpresence and enoyed success in both the and uropean mar%ets" a!ter that the compsee%in the e$p#osi+e economic rowth that bto ta%e p#ace in the ear#y 199Js in

there!ore wor%ed /uic%#y e$panded in thmar%ets

• The company opened its <rst store in 'hin1990 a!ter that openin /uic%#y in other countries inc#udin outh Korea and made<rst !oray into &ndia in 0:.

• -s LVMH bean to increase its presence in


THE SITUATION



II. DESCRIPTION OF THE

PROBLEMS

Main pro"lem#• 3as it a strateic decision !or LVto center its e=orts in the -smar%et" and i! so" which path shothey ta%e !or their positionin succand brand rowth

$e%on&ar' pro"lems#

•How wou#d LVMH entice 'hinaJs nrich popu#ation to pay the !u## price



$e%on&ar' pro"lems (%ont)#• How wou#d LVMH o+ercome @o#itica#" 'u#tura# and conomobstac#es encountered into entethe -sian Mar%et (i.e #u$oppositions" !orein curree$posures" interest rates" cu#tu

di=erences amon countries" re#idi=erencesmus#im)

• How wou#d the brand ass


PROBLEMS



$e%on&ar' pro"lems (%ont)#• How wou#d LVMH <ht aainst brand di#ution To maintain its presand reputation whi#e ainin m

bier mar%et share

• hou#d the company decide !orpri+ate ownership or a !ranchis

with reards to its interest in pro<tabi#ity


PROBLEMS



3e be#ie+e that LVMH made the riht stratedecision to !ocus on the rapid#y e$pand-sian mar%

• LVMH is presented with se+era# a#ternati+es

de+e#op its -sian business that !a## under !o##owin strateic areas>

– 'onso#idate its position

– $pand mar%et share

– @rotect brand name and reputation

III. POSSIBLE ALTERNATIVES F

SOLUTION



Consoli&ate *osition#• &ndependent stores +s. Franchisin

– Tappin #oca# mar%et %now#ede

–

Ipho#din /ua#ity and bramanaement

– -bi#ity to /uic%#y e$pand into nmar%ets


SOLUTION



Market $+are• peci<c business roups !or spec

countries (i.e. watches in &ndia)

– &ndependent stores +. Franchisin

– +a#uate what brands !or wcountries> &n+estiate competitors

• Tareted brands in speci<c countries ('hristian 6ior)

– Ta%es ad+antae o! breadth" depth" aconsumer %now#ede o! brand names


SOLUTION



3hen e+a#uatin their a#ternati+LVMH needs to !ocus on thstrenths and se#ect the a#ternati+that a##ows them to #e+erae thestrenths and not sacri<ce thimae and reputation !or /ua

and the Lu$urious Li!esty#e.


SOLUTION



IV. RECOMMENDED SOLUTIONS

Business $trateg'• ,e !ocus on its core strenths in orde

achie+e that ma$imum amount o! succin !o##owin throuh on its strate

decision to !ocus on the emereconomies o! -sia.

• Their abi#ity to manae mu#tip#e braand maintain their reputation o! /u

whi#e upho#din a uni/ue imae CFrenchness.



•

-nother bene<t o! 'hina in particu#ar" the other -sian countries on a smasca#e" is that the #u$ury oods mar%e!ar !rom saturated as is the case w

the roupJs traditiona# mar%ets presents amp#e rowth opportunities a## o! LVMHJs business roups.

• &! 'hina continues to row as has b

proected" the number o! consumers wwi## want and more important#y be ab#e





On stores an& $ele%tie Retailing• - %ey point in upho#din their bran

reputations is that they must %ede+e#opin and supportin in

stronest way their stratey to rby bui#din their own se#ecti+e retai#stores and a#so #imitin the a+ai#abo! the products throuh authoriB

#u$ury dea#ers.• Got on#y wi## this stratey a##ow LVM





$egmentation• They must #imit the rowth o! increasin demand !or LVMH braamon the midd#ec#ass" %eepin

condition as a manu!acturerPsupp#ierhih pricedP/ua#ity oods.

• -+oid di#utin the mar%et and hurt

the prestie and status o! their obrands.

•




Competitie a&antage#• LHMH must obtain bene<ts !rom presence in wines and spirits" it is on#y #u$ury oods company that ha

premium wine and spirits di+is'ross promotion has un#impotentia#.

Marketing strateg'• *ro&u%ts > Qua#ity and const




• 'onsistency with top /ua#ity produnot to Co=shore their manu!actu!aci#ities> prestie damaed !or Ccheapest.

•

Bran& management > 'ounter!eitin %noc%o=s a=ects companies ta%in awpotentia# customers" di#utin the marand decreasin the @V" hurtin LVMbrand imae.

• Mar%etin e=orts> /ua#ity and uni/ueno! their brands. -d+ertisin and rod






I. RCOMM1



I./ RCOMM1

$OL3TIO1$• *ri%ing > Keep the hih priced prod

po#icy. - price competition or attemptinreach a new consumer sement is recommended. - drop in price can a de+astatin e=ect in #u$ury companie

• @rice is /ua#ity" di=erentiation and hestop brand di#ution.

• &n -sia" there wi## be a consistent str

o! aspirin new#y wea#thy consumershow o= their new!ound #i!esty#e

•


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Louis Vuitton Moët Hennessy - Grupo_8_Final 120609.pptx