Counterfeit products diminished value of brand and led to more competition

Counterfeit products diminished value of brand and

  • Rutgers University
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  • njc100
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business of buying and reselling. Counterfeit products diminished value of brand and led to more competition. Success of products heavily relied on expensive advertisements in magazines. Strengths Dominated asia-pacific region brand power that had propelled the company to leadership positions in almost every segment it served. LVMH was ranked number one in champagne and cognac, fashion and leather goods, and selective retailing. By early 2001, the company had been reorganized around five divisions spanning wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewelry, and selective retailing. clearly the world leader in the wine and spirits business. Mr. Arnault believed that, “If you think and act like a typical manager around creative people—with rules, policies, data on customer preferences, and so forth—you will quickly kill their talent.”6 Thus, the company was decentralized by design and had a very small cadre of managers. New products contributed 15% of LVMH revenues in leather goods and 20% of sales in fragrances and cosmetics in 2000. Weaknesses In 2001, the company witnessed a 4% decline in division sales due to the poor performance of cognac labels in the traditional stronghold market, Japan (relies too heavily)
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  • Spring '10
  • PETRACHRISTMANN
  • LVMH, selective retailing

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