chance on even the small brands that a design house might promote.” Recommendations: 1. LVMH should continue to invest in various business ventures that allow the company innovation and differentiation. LVMH should understand its competitor’s advantage in 4
various markets, and determine the strategic and economic possibility of being successful if they were to enter. As for cutting ties with unprofitable investments, LVMH should see if there is growth potential in the sectors. Otherwise, it could divest, and use its resources and competencies towards lines that are most profitable for the company specifically investments in their Selective Retailing division which could prove to be big business for LVMH in the future (Exhibit 2). 2. LVMH should gain strongholds in other regions. It was forecasted that the “target market of high net worth individuals were expected to increase by an average of 8% for the next 5 years.” LVMH should build a long-term expansion plan to reach this growing target market in high potential regions, effectively reducing their dependency on the Japanese market. 3. LVMH has strong brand loyalty, and its customers “did not need to be courted.” However, LVMH could use advertisement to augment customer interest in their smaller acquisitions. Advertising is essential, because the luxury industry is highly competitive. Instead of dated magazines, LVMH could promote their products through celebrity endorsement on the red carpet, or (especially now) through social media. Exhibitions Exhibit 1 LVMH’s Diversified Portfolio 5
Exhibit 2 Revenue by Business Group Source: , accessed March 2017. 6
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