Louis Vuitton — one of the oldest fashionable houses of Europe. Its history began in the middle of the XIX century, in 1854. Today, as well as 150 years ago, goods from Louis Vuitton are still made manually. With unmistakably recognizable monogram of "LV" on the logo, Louis Vuitton it is recognized as one of the most prestigious brands in the world. “Louis Vuitton is one of the world's leading international fashion houses; it sells its products through standalone boutiques, lease departments in high-end department stores, and through the e-commerce section of its website.Louis Vuitton commonly referred to as Louis Vuitton or shortened to LV, is a French fashion house founded in 1854 by Louis Vuitton. ” (louisvuitton, 2011). Environment can be defined as, the amalgamation of external physical circumstances that impinge and influence the augmentation, development and survival of creation. Therefore, the business environment would define as same, all the factors internal and external that affects its profitability and growth. It is very important for the business leader to carry out business environmental analysis to understand their business topography at present time.
To evaluate suitable context of the organisations operations in terms of the internal environment it is best to use SWOT analysis of Louis Vuitton. First of all let is start from strengths. Louise Vuitton is not only one of the oldest, but one of the most legendary houses of fashion in the world. The most valuable argument for the strength of this company is exclusivity. Since the 19th century, manufacture of Louis Vuitton goods has not changed. “Luggage is still made by hand, utilize the signature brown Damier and Monogan Canvas materials, both of which were first used in late 19th century.” (lvmh, 2012).
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Also, the company markets it is product though it is own stores located throughout the world, which allows it to control product quality and pricing. “Louis Vuitton commands a strong brand identity and image in the world’s leading financial hubs such as China, Japan and Hong Kong, which incidentally also has the highest concentrations of high net worth individuals, with loyal customers in Europe and the United States. ” (louisvuittonbrand, 2013). Secondly let is identify weaknesses of Louise Vuitton.
Limited costumer base is the one of the weaknesses of this company. Only the elite and rich who want to make a statement and want to be distinctive from others can afford Louise Vuitton. Also, it does not have any discount sale on it is products, which means that the company reducing the chances of attracting customers who can afford more economical products. “LV has not had a sale in 154 years. Louis Vuitton prohibits bargain sales. A core of Louis Vuitton’s pricing strategy is to sell the products to all of its customers at the same price no matter the location.“ (Kraemer, 2012).
Thirdly, let is think about opportunities. To meet contemporary tastes and styles of it is elite consumers, Louise Vuitton revamping its image from time to time. “The fashion industry is a pretty dynamic one which changes rapidly over the seasons. Louis Vuitton has the ability to revamp its image from time to time to meet contemporary tastes, styles and preferences of its customers. ” (louisvuittonbrand, 2013). Moreover, Louise Vuitton leverages its strong brand equity to product – fashion, accessories, shoes, timepieces, and architecture.
And with its continuous innovation and support to different managerial, environmental, and more crucially societal and humanitarian issues and concerns (e. g. corporate sponsorship to support culture, youth and humanitarian action), Louis Vuitton can gain more customer loyalty, which will help give them a greater competitive advantage against rival brands. “While the brand is one of the leading names in the luxury industry, Louis Vuitton maintains a strong desire to continue its innovation with high quality raw materials, tamper-proof locks, optimised production processes, and soon a dedicated leather goods hub in Angers, France.” (Quark, 2013).
Now let is talk about threats of the company. Louise Vuitton is one of the most counterfeited brands in fashion world due to its image as a status symbol – imitation of quality, expertise and innovation – sued Britney Spears, Darfur Charity infringing LV’s intellectual property rights. Also it is has luxury and strong competitors such as Christian Dior, Chanel, Gucci, Prada etc. And one more thing is animal right group. Campaigners staged a noisy protest outside a Louise Vuitton store on Paris famed Champs Elysees avenue in 2006 for using real fur in decoration and accessories.
“With the advent of environmental protection and considerations in business, the number of groups protesting against the use of animal skins on fashion and leather goods” (louisvuittonbrand, 2011). External business environment represent the uncontrollable factors, the external factors can be analysed using PEST analysis. It will cover political, economical, social and technological factors. Political Louis Vuitton has slashed the rate of new store openings to two a year on average, down from 10-15.
Its extensive network of 460 shops stretches to Mongolia and Kazakhstan. Higher sales going through fewer stores should boost the profitability of each store. Economical Economical situation, inflation, interest rate and strengths of consumer spending. It will directly affect the Louise Vuitton and its profit, if economical situation is bad consumer will spend less “Fewer new store openings will also free up cash, which could potentially be returned to shareholders” (Daneshkhu, 2013) Social
Louise Vuitton is wealthiest and renowned member of society Technological The new opportunities to expand on the Internet though online sales and now even sales by smartphones “Today, the Louis Vuitton app includes three document types: PDFs, interactive publications (with video, slideshows, Web sites, specific read modes) and videos. It consists of a kiosk, which is used to navi- gate through the Quark Publishing Platform tree structure to select and download the desired publications before viewing them on the iPad.
The app also includes a library for previously downloaded documents (which can be read in off-line mode). ” (Quark, 2013) Now this essay will give brief recommendations for Louise Vuitton for the next years. Let is start from short-term recommendations. First of all, to make Louise Vuitton more appealing to the consumer, some products of the brand can be made available only in small quantities, by limiting its production of certain products from time to time, or producing special edition of the some handbag in different markets, Louise Vuitton could become even more premium.
Hence, this can satisfy the consumer, who wants to differentiate themselves from other Louise Vuitton users. Louise Vuitton could even create a trend for collection of limited edition Louise Vuitton products. Also, Louise Vuitton can open to franchising with high end malls around the world. Long term recommendations are about to be more distinctive from the competition, Louise Vuitton may consider concentrating its business model to production of leather goods only.
If Louise Vuitton could concentrate on leather goods production alone, it could become not just the leader, but also the specialist of producing different leather goods. Also, by offering more economic lines to the consumer, Sub brands will help to fight counterfeiting and broaden their consumer base In conculion, as Louis Vuitton continues to build on its strong history, add to its portfolio, and show continued growth, now is a strategic time to invest as stock and value continue to rise.
“The company’s maturity and proven stability make it attractive and investors can rest assured that there would be a low level of volatility in their investment. ”(Nebia, 2012) Investors can also be comfortable with the fact that this is not exactly a “widows and orphans” stock, Louise Vuitton has had continuous expansions by acquiring other well know luxury goods companies and continues to make substantial investments. This has helped to further differentiate sources of revenue and gain more consumers. The company’s innovation in the sector and well-established culture make it standout investment.
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