Strategies of expansion at the time of deceleration: The case of LVMH

Résumé du document

The year 2004 represented one of the best year that the world economy has experienced since the beginning of the millennium. Indeed the growth of the Gross World Product (GWP) has increased by 4 per cent in 2004 compared to only 2.8 per cent in 2003. However this high rate of growth in 2004 can be easily explained by the fact that the improvement was almost universal. Indeed all the regions of the world reached impressive growth rates in 2004 compared to the figures of 2003. Even countries in specific conditions of development, "the least developed countries and landlocked countries, grew by more than 5 per cent during" this year. Nevertheless the economic situation among Triad countries (Japan, Europe and the United States) has not been so successful. Indeed major economic problems remain in Europe, especially the high rate of unemployment, and in Japan also, which represent two of the 3 most important markets for LVMH. For the year 2005, economic results are even weaker. According to the WTO economic analysts world output decreases. This is partly attributed to the huge increase of oil prices, which have slowed down the world trade growth in 2005.

Extraits

[...] Chapter 3 will provide a critical review of existing literature in the field of strategy and of the luxury industry. It begins by giving basic elements to understand the specificities of the industry Furthermore, it looks at the different strategies that can be implemented by companies in time of recession in order to maintain their profits and their range among their competitors. Chapter 4 will then describe the methodological approach, covering issues such as research design and data collection . [...]

[...] In the first stage, journal and newspaper articles as well as electronic sources prove to be very useful to collect information about the wine industry, and the trends of this sector. However, a deeper secondary research needs to be done in order to highlight the theories written by academic authors in books and academic journals, and to try to link them to the topic of the study : Definition of the terms 3.1 .1Luxury industry There is no clear definition of the luxury industry and this absence of an objective definition can explain the heterogeneous structure of the market. [...]

[...] (2003), Research methods for business students, third edition, Pearson Education Scapens et al. (2003), Research Method and methodology in finance and accounting, London Academic United Nations (2005), World economic situation and prospects 2005, New- York World Trade Organisation (2005), La croissance du commerce devrait ralentir en 2005 par rapport au rythme record de 2004 Wikipedia free encyclopaedia: www.wikipedia.org Yin (2003), Case study research: design and methods, third edition, Sage publication. [...]

[...] Consequently I may carry some interviews in September. The rest of the month will be devoted to the analysis of the data collected. I will start to write the findings of my research and the remaining chapters as soon as the beginning of October in order to be able to send a first draft to my facilitator to change it according to her feedback. In November my time will be dedicated to the final draft that I will submit mid-December. [...]

[...] This can be illustrated by the opening of a new shop “Galleria” dedicated to luxury products in Okinawa in 2004. Fragrances and Cosmetics This is a dominant division for the group. Indeed it contributed to 18.4 per cent of LVMH sales in 2003 and is composed of very famous brands: Christian Dior, Guerlain, Kenzo and Givenchy. The division is still expanding its action scale and especially through an acquisition strategy (Bliss, Hard Candy, Urban Decay ) in the US which allowed to reach a younger audience. [...]