Strategic analysis: Luxury crisis and their economic counterparts

Résumé du document

Mandeville describes luxury everything beyond the bare necessities. The luxury covers everything that is deemed superfluous and unnecessary. But the usual sense means the splendor and sophistication in the way of life (tableware, toilet elegant, sumptuous decor). We can acquire luxury by large expenditures. So it is either praised or vilified by political thinkers. Voltaire thought it was the essential support of the economy. Rousseau operating principle of the common people and the spring of all perversions, because luxury is made to be admired, it dazzles.

Coco Chanel: "the opposite of vulgarity".
Chantal Thomass: "what is exceptionally fine quality, creative". D. Potard: "a bit like God: no one really knows what it is but everyone has an opinion".

More generally luxury is mainly an economic sector emerged in the seventeenth century in France, with the opposition of the nobility against the new culture born of the industrial revolution. Now the luxury is no longer intended for elite, but by elite and elitist of all of us.

Nevertheless this sector which had known a long period of growth, did not avoid economic crisis. In fact, luxury was affected by the crisis in 2008 and lots of brands were hit. We can wonder how this market was affected?In this report, we will analyze the luxury crisis and their economic counterparts. To summarize, we will do a strategic analyze with a SWOT.

Extraits

[...] More than ever, luxury brands will continue to tell stories, but more sincere, genuine and generous. - The art and creation, which continues to fascinate the world of luxury. Somehow, it is not a return to classic luxury, but the birth of a synthesis between two previously considered contradictory trends: the eternal aspirations of luxury (enjoyment, hedonism, expenses . ) and new form authenticity in consumption. In any case, the end of any and all ostentatious fashion that has dominated the market in recent years. [...]

[...] Most purchases of luxury goods have made by these customers during fifteen years. This last category of consumers becomes a target for most major brands, in that spirit, develop their range of accessories or launch a series of products at lower prices. More accessible, the luxury and gradually opens to a wider clientele. Individual choices and cultural dimensions are very important in Luxury market. However, we can see that the current trend leads to homogeneity of tastes and aspirations. Today's consumer belongs to a community, it needs to recognize within it. [...]

[...] They learned from previous crises and they have a capacity to adjust faster. Weaknesses (during the crisis): Watches Accessories Wines & Spirits Tableware Jewelry Subcontractors of luxury brands were the main victims of this crisis. Fluctuating exchange rates Opportunities: Tourists stay important customers in the world. China is the future of Luxury market. Chinese love luxury. Big brands go there. The population of millionaires in China has exceeded that of the United Kingdom. Emerging countries such as India, Brazil etc North and south America are places of growth. [...]

[...] ) Developing Luxury creations. Developing luxury in terms of ecology and sustainable development Internet shopping Focus on the sophistication, the scarcity Threats: Decline of Japan: the clientele is aging, expectations change, the economy is doing poorly. Customers reduce their purchase during times crisis. Some shops are in trouble due to the crisis. Decrease of millionaire in the world after the economical crisis. Gold is no longer seen as a safe haven. Fewer tourists from the Eastern Europe and the Middle East The democratization of luxury weakens luxury brands Conclusion: Finally, luxury has not escaped the crisis marked a break with the trend of strong market growth. [...]

[...] Turnovers of the main actors of Luxury Market: (boursorama) The graph up there shows the turnovers of the main actors of Luxury Market from 2005 to 2009. We can see that for most of them, their turnovers decreased in 2009. For example, LVMH decreased by PPR has dropped by 18% etc. This situation is new for these companies which have known an important increase of their turnover during a decade. So we can see the effect on the crisis in Luxury sector. Others companies such as Richemont and Hermes have just decelerated. [...]