technical skills required are the same. Why would this produce more value? I would say that out of all the LVMH brands, Dior produces the most popular lines of perfumes. On the other hand, Louis Vuitton is not famous for their fragrances, as they haven’t mastered the tastes and preferences in scents their customers desire. Dior and Louis Vuitton target the same customers; therefore, Louis Vuitton would benefit from the resources and know-how of the Dior fragrance department. This would be an effective cross-business strategic fit which would potentially increase value. TASK #4 : Justify your choices in Part A, by describing some specific sales and marketing activities, common distribution channels, use of common
brand name, or after-sale activities, and the Value Chain Activities in which there are potential opportunities for cross-business strategic fit among the business groups. There are a lot of things LVMH can do, with all their brands, in sales, marketing and common distribution channels. 1. A strategy many brands are using today are joint ventures to create a temporary fashion line. LVMH has so many brands, and I never saw them collaborating with each other, as this has proven to be a very successful marketing strategy. For example, they can increase brand awareness by having Moet (champagne) and Louis Vuitton collaborate on limited edition champagne, or they can have Bulgari design limited edition jewellery for Louis Vuitton. There are endless things they could do with their brand in terms of joint ventures/collaborations. It would give them access to the different customer segments by using common distribution channels, combining their brand name for one or more products, etc. 2. LVMH, as mentioned in the case study, spends a lot on marketing for their fragrance lines. Rather than having different advertisements for watches, fragrance, handbags, clothes, they could potentially include many of their diverse brands products into one advertisement. TASK #5: What evidence is there that LVMH's diversification strategy is actually building shareholder value? Give evidence from the LVMH case to support your answer.
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- Spring '13
- Sales, business groups, Louis Vuitton, LVMH, cross-business strategic fit