LVMH?s Diversification :: essays research papers

LVMHs DiversificationStrategy into Luxury GoodsThe problem after(prenominal) the case and readings the problems of LVMH there are several problems such as the declining contend 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 different still have to improve their IPR policies And finally LVMH diversification strategy (Bernard Arnault) is devising acquirements outside the companys sector. In sector where they dont have the know-how and dont match the company Image. The current chief executive officer (Arnault Bernard) is also the major shareholder which makes him easier to make decisions on new achievementsThe donkeywork analysisStrengthName recognition which makes them the largest product marketplaceTheir arrest during the timeLeading p ositionQuality providerDistribution creation RelationWeaknessesTheir DiversificationConflict of interest (fashion vs. wine and spirits)Forward and self-referent 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 market gain of way of selling their large product line ( distribution channels)Expansion to otherwise 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 imageImplementation bring several countries to enter that is suitable for the luxury market and in found to develop the strategy of the company