LVMH Group: International Business

Résumé du document

What is International business?
“International business environment: with the rapid rate of the integration of markets in emerging economies with the rest of the world and with the ongoing attempts of privatization, liberalization and globalization, the subject matter of international business has been getting more acceptance even in developing countries.”

Why LVMH?
It is the world largest luxury retailer, it is a good example of international business because all the dimensions are taken in account.

Represents the most refined qualities of Western "Art de Vivre“
LVMH: synonymous with both elegance and creativity.
Five priorities:
-Be creative and innovate
-Aim for product excellence
-Bolster the image of our brands with passionate determination
-Act as entrepreneurs
-Strive to be the best in all we do

Extraits

[...] (Onkvisit and Shaw, 2004) Five characteristics of the luxury Products quality excellence High prices Rarity Quality of the accessories Five senses Uma.Thurman.LVMH.bag.jpgUntitled-2.JPG The luxury marketing is very different from the traditional marketing. Three strategies exist in luxury - Intuitive marketing (unreachable luxury) - Elaborated marketing (intermediate luxury) - Scientific marketing (affordable luxury) At the international level, LVMH uses two approaches of marketing: Exportation marketing: exportation of the “Western Art de Vivre” all around the world. Global international marketing: use of five Strategic Business Units. [...]

[...] Untitled-2.JPG Corporate strategy Innovation strategy: Put forward new products all the time R&D department Leadership strategy: concentrate the allocations on the main profitable brands as Louis Vuitton Organisational strategy HRM politic: LVMH uses training for its employees and hires experienced people with double degrees 201001FendiB150710.jpgUntitled-2.JPG Source: « Griffin » (2006) Untitled-2.JPG Generic strategy Costs strategy Limit the production to create a rarity effect; increase the margins with high prices and ombrelle strategy Economies of scales at different levels: production-logistic, property-commercial, communication-advertising Differentiation strategy Based on a marketing and communication development : luxury image , quality and “Western Art de Vivre” Specialization strategy Focus on only one target: people with high buying power for luxury goods Niche strategy Untitled-2.JPG LVMH uses all the development and growth strategies in order to extent their worldwide influence The group uses a strong strategy of differentiation and specialisation based on the brand image and the niche strategy There are strong synergies between the five SBUs All these strategies allow the group to be market leader and profitable Untitled-2.JPG Key Success Factor Position on the market place Image and culture Synergy of the SBUs with reduction of cost (supply, manufacturing and marketing) Control on technical skills and the technological control Strong financial factors Competitive advantage: expansion, innovation and variety of SBUs During the economical crisis, the group always knew how to concentrate on its priorities and take advantage of the strength of its brands to gain market shares and strengthen its leadership on the luxury market. [...]

[...] Suppliers and retailers work together to maintain quality on the products and keep control on the brand image. Horizontal: external growth and use of acquisition strategy. Strategy of external and internal growth External: acquisition strategy . [...]

[...] It is the world largest luxury retailer, it is a good example of international business because all the dimensions are taken in account. Untitled-2.JPG Group presentation owned by the Arnault Group employees 2400 stores Sales: € 17.1 billion (2009) World largest retailer of luxury goods 60 prestigious brands 5 SBUs Wines and Spirits Fashion and Leather Goods Perfumes and Cosmetics Watches and Jewelry Selective retailing 2008moetchandoncopyright.jpgUntitled-2.JPG Group missions Represent the most refined qualities of Western "Art de Vivre“ LVMH: synonymous with both elegance and creativity. [...]

[...] LVMH uses: Development strategy Internal and external growth strategy Corporate and organisational strategies Generics strategies 201001FendiHomeA150710.jpgUntitled-2.JPG Source: « Palmer et al » (2007) Ansoff matrix Untitled-2.JPG Development strategy Geographic specialization Global market: counterbalance the market's fluctuations and to increase the number of customers ‘Think global, act local' Source: www.lvmh.com zonegeo_2009.gifUntitled-2.JPG SBUs diversification: A strategic Business Unit is a part of an organisation for which there is a distinct external market for goods or services that is different from another SBUs. “Johnson et al” (2008) Create synergies intra and inter SBUs: optimize activities and decrease costs Source: www.lvmh.com chiffregrpact.gifUntitled-2.JPG Procedure diversification strategy Vertical: integration strategy. [...]