Swot analysis of the Asian luxury market: LVMH

Résumé du document

The Asian market is offering a lot of opportunities. As it's an emerging market (except Japan), there is a high growth rate with a global increase in wealth. Consequently, Asians are becoming richer and have more purchasing power. So the propension to consume luxury goods is quite important. Furthermore, this is a vast market with a huge population. Buying luxury products is really common trait in the culture of Asian people. There is a constant high consumption and attraction for luxury products. Asian consumers are really addicted to luxury brands. For example, some Japanese or Chinese people don't hesitate to spend more than the half their wage or to loan money just in order to buy handbags! In addition, China's taxes on revenues are lower and people spend less money for their accommodation.

Extraits

[...] Weaknesses High prices: In Asia prices are really higher than in Europe. They are approximately more expensive from 30 to 50% which is a huge difference. This is due to high costs of transport (especially because the bulk of the products are produced in Europe and not in Asia) and to the monetary risk and the problem of change rate. It entains bad consequences as the appearence of a well-known parallel market (Asian people buy in france huge quantities of products and they resell them more expensively in Asia. [...]

[...] It is the world's largest luxury-goods maker. High quality products: LVMH focused strongly on the quality of thier products. They have a high level of autocontrol, they have high quality materials and most of their products are hand made and are produced in France or Europe. They also profit from their experience and their history. Bernard Arnault said: “Japanese customers are very quality-conscious and that's the reason the success of LVMH gets bigger every year”. Strategic establishment of shops: LVMH set up a long-term strategy for the choice and the place of their shops. [...]

[...] Swot Analysis of the Asian luxury market: LVMH External analysis of the Asian luxury market Opportunities An attractive market : the Asian market is offering a lot of opportunities. As it's an emerging market (except Japan), there is a high growth rate with a global increase in wealth. Consequently Asian people are becoming richer and have more purchasing power. So the propension to consum luxury goods is quite important. Furthermore, this is a vast market with a huge population. The Asian consumption and culture: Buying luxury products is really in the habits and in the culture of Asian people. [...]

[...] Threats The unstability of Asian economy: Even if the Asian economy is booming, these countries are still very unstable and fragile. For example they had undergone a serious economic crisis in 1997. It's not certain that this case will not happen again in the future. So companies which set up in Asia have to be aware of these risks and to be cautious. The monetary risk: Asian currencies are flotting and are really unstable. They are very influencable and can fluctuate hugely (more than the dollar or the livre or the euro which are strong currencies). [...]

[...] They constantly propose new and innovative products to their customers. High profitability: Its turnover increased by 15% in the 1st half of the year 2006 and they confirm a strong growth of the results in 2006. "Our products in our group, such as Louis Vuitton, Christian Dior and Fendi, are extremely successful" said Bernard Arnault. In 2005, sales amounted to 14 billion euros. Fight against counterfeit: In LVMH headoffice, entire department are dedicated to the counterfeit. For example, they won an important lawsuit against Google for counterfeit. [...]