LVMH strategic analysis :: essays research papers

Challenge statementDespite world-wide mildness in the sale of highlife goods, LVMH has cemented its position as the worlds largest and most profitable player in the category. To stay there it must keep its customers loyal and its brand strong and find new markets worldwide (Hazlett C. 2004). That is why in its mission they state to patch up the most graceful qualities of Western art de vivre all around the world. Their objective is to be the loss leader in the luxury market, continuing to transmit elegance and creativity. This poses some major(ip) challenges, the main one is to keep being the leader in the luxury market through a sustainable growth. The main problem to reach it is the high dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one uncouth it affects LVMH directly that is why. ANALYSISFinancial analysis.LVMH lay outs itself in a stable financial situation. Being positioned as the market leader they brace better financial results than the rest of the competitors. Although the sales results for 2004 were under the industrys average the boilersuit cognitive forge over the last 5 years was 3% high then the industry. It is important to note that the major owner of the companys capital is present CEO Bernard Arnault with 47.52% of the control of the company with 64% of right to vote rights. This may have an Important impact in the overall performance and operating decision taken in the company. Marketing systemafter a 4 P analysis of the company one found that it found itself in a luxury market where ingathering superior and constant innovation are key points for the success. That is why the production process and its design can take even months. Product line is abundant however it is only conformed of high priced products. Price in this case is a guarantee of the quality present in the product. Moreover, high pricing represent an element of differentiation that the customer appreciates. However this is not a setback, LVMH has managed to have world wide presence and success. To accomplish it its selective retailing discussion section is of high importance. Nevertheless, promotion posses the major challenge since its through this that the image of the product its transmitted that is why the company poses a major part of its budget in this section. It is Important to note that the percentage allocated is higher than those of most competitors.