Counterfeit products diminished value of brand and

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)
●