...A06-02-0007 FASHION FAUX PAS: GUCCI & LVMH “The brewing battle for Gucci is emblematic of the New Europe that is taking shape with the launch of the common currency and the globalization of industry: two Frenchmen squaring off for control of a Dutch-based Italian company run by a U.S.-educated lawyer and an American designer, and advised by London-based American investment bankers. “Gucci Watch,” Wall Street Journal, March 22, 1999. The Gucci Group N.V. 2000 Annual Report really said it all. Tom Ford, Creative Director, and Domenico De Sole, President and CEO, stood side-by-side facing the camera with eyes of steel. Ford, unshaven and shirt provocatively opened, was the American designer who had single-handedly revitalized the Gucci name. Domenico De Sole, dressed in a dark suit, white shirt, with finely trimmed beard, was the Italian lawyer -turned-businessman who had returned Gucci to profitability and promise. The photograph, of course, by the famous fashion photographer, Annie Leibovitz. These two men represented the defiant spirit of Gucci, a molten mix of high-powered fashion and high-powered finance. These two men had, in the first six months of 1999, been the centerpiece of one of the most highly contested hostile takeover battles ever seen on the European continent. Under attack by LVMH Möet Hennessey Louis Vuitton, the French luxury goods conglomerate, Gucci had implemented the age-old strategy of “the enemy of an enemy is a friend.” Gucci successfully...
Words: 5995 - Pages: 24
...Louis Vuitton Moet Hennessy Write Up Introduction: The Rise of LVMH Louis Vuitton Moet Hennessy (“LVMH”) was formed in 1987 when Louis Vuitton, a leading luxury fashion brand, formed in 1854, merged with Moet Hennessy. Moet Hennessy had been formed in 1971 when Hennessy, a cognac manufacturer, merged with Moet et Chandon, a high end champagne producer. This formation of LVMH would signal the creation of one of the world’s most profitable and encompassing luxury goods conglomerates. In 1989, Bernard Arnault would enter the picture, become the major shareholder of LVMH and take up position as chairman. An entrepreneur and art admirer, Arnault had amassed a personal fortune in real estate and in other luxury goods markets before purchasing the majority share of LVMH. Under him, LVMH would grow exponentially, acquire even more brands, expand into new markets, and see unprecedented growth. By the late 1990’s to early 2000’s, the company would be posting net revenues in the billions of Euros, comprise some fifty sub companies, all of brand names synonymous with high end fashion and luxury, and have over 1,500 retail stores operating in every major market on a global level. LVMH became the parent company to some fifty sub companies across a variety of different product industries and types. All were owned by the same company, but most operated independently and, in some instances, were direct competitors of each other. Regardless, each company no matter how different had...
Words: 2886 - Pages: 12
...5: Financial Performance14 Appendix 6: PESTLE Analysis15 Appendix 7: SWOT Analysis16 Appendix 8: Evaluating industry Attractiveness and Competitive strength19 Appendix 9: A Nine Cell Industry Attractiveness-Competitive Matrix20 Appendix 10: Cross Business Strategic Fits20 Appendix 11: Evaluating the Strategy of a Diversified Company21 Appendix 12: LVMH's Timeline of Mergers and Acquisitions24 9.0 REFERENCES25 1.0 Executive Summary The aim of this paper is to discuss the key strategic issues that LVMH face and establish some future recommendations that can be implemented in order for LVMH to remain successful in the luxury industry. In order to determine the key strategic issues a number of analysis tools were applied to the case study; they include Porter's 5 forces model, SWOT analysis and PESTEL. It was found that the key strategic issues that LVMH face centred on diversification and vertical integration. A number of strategies have been proposed to offer some recommendations to LVMH, they namely in restructuring their retail sector, considering the concept of moderate diversification and focusing on the human resources side of acquisitions and mergers. 2.0 Introduction This report is based on the analysis of a case study 27 titled: LVMH's Diversification Strategy into Luxury Goods. The scope of this report is limited to the data contained in the...
Words: 5802 - Pages: 24
...introduction of Louis Vuitton, the famous and high price and high reputation luxury brand product originated from France. Later, this paper will further investigate on the information regarding the company’s products and services (product mix) and its marketing analysis and industry analysis in general. The strategies analysis and implementation of the strategies will be demonstrated and website marketing strategies by the company will be discussed as well after the implementation of the strategies plan. Lastly, a brief conclusion will be provided to summarize the entire marketing plan for LVMH. 1.2 Vision and Mission LouisVuittonMoët Hennessy group,LVMH, would represent the most refined qualities of so called "Art de Vivre" in France and around the world. LVMH will have to constantly with the balance and both elegance and creativity in the products. LV’s products together with the cultural values LVMH embodies, mixing old and...
Words: 3803 - Pages: 16
...TABLE OF CONTENTS 1 4 6 7 8 9 10 11 12 13 14 16 17 19 21 Chairman’s Message Consolidated Highlights The LVMH Share Shareholder Relations Wines and Spirits Fashion and Leather Goods Perfumes and Cosmetics Watches and Jewelry Selective Retailing Other Activities Consolidated Balance Sheet Consolidated Statement of Income Activity Review Consolidated Statement of Cash Flows Consolidated Statement of Changes in Stockholders' Equity CHAIRMAN’S MESSAGE The slowdown of the world’s economies, the shock of the attacks of 11th September and their grave geopolitical consequences, very poor short-term visibility for economic and financial markets : these were all defining characteristics of 2001. The accomplishments of our teams in this exceptionally unstable environment were remarkable. Thanks to their talents, their efforts and their great ability to be reactive, our activities continued to grow, sustained by the entrepreneurial and innovative spirit which is at the very foundation of our position of leadership and which allows us to gain market share, even when times are difficult. Bernard Arnault Chairman and CEO EXCELLENT PROGRESS FOR OUR GREATEST BRANDS The performance of the great brands which are at the heart of our business was excellent. Louis Vuitton saw further growth and its new products, which accounted for 18% of the year’s sales, are objects of infatuation. Parfums Christian Dior saw numerous successes and Hennessy continued to gain ground in the United States...
Words: 9837 - Pages: 40
...SEGi UNIVERSITY COLLEGE FACULTY OF BUSINESS AND ACCOUNTING UNIVERSITY OF SUNDERLAND UGB-202: Introduction to strategic management Course Work TITLE: Company profile COURSE NAME: BA (HONS) BUSINESS MANAGEMENT INTAKE: 14th FEBRUARY 2011 SEMESTER1 Level 2(February TO May 2012) MODULE LEADER’S NAME: LECTURER NAME: Ms. Malathi NAME: Oumoul Khairy Barry 109115296/1 Company profile: As it was required in class I’ve chosen a firm in the clothing or textile manufacturing according to the UK standard, which is Louis Vuitton or Moet Hennessy Louis Vuitton SA (LVHM). Louis Vuitton is a division of holding company, founded in 1854 by Louis Vuitton its self. The label is based in Paris, France. The key people in the company are Jordi constans (Chairman and CEO), Marc Jacobs (Art Director), and Antoine Arnault (Director of communication). The company is well known for its LV monogram, which is featured on most of its products. They are famous in producing luxury goods (ready-to-wear, shoes, watches, jewelry, accessories, sunglasses, and books), LV is a retailer industry. By 1989 Louis Vuitton came to operate 130 stores worldwide, the largest and most successful LV store is located in Paris (Champs Elysees). The most famous products of the manufacture are their bags and wallet, which attract mostly women. As for any firm Louis Vuitton has many competitor but the strongest...
Words: 537 - Pages: 3
...------------------------------------------------- LVMH Moët Hennessy Louis Vuitton Purpose The purpose of this report is to fully analyze the conglomerate, LVMH Moët Hennesy Louis Vuitton SE at both an internal and external level in order to come up with a synopsis of the business’s current performance in the stock market. This project includes research of LVMH’s company background, competitive strategy, the industry: a financial study of the macroeconomics, short and long-term goals, the organizational structure, and financial management. This report will depict LVMH’s present position at all industry aspects to reach the final evaluation of its performance in the stock market. Introduction LVMH Moët Hennessy Louis Vuitton is the world’s largest multinational luxury goods conglomerate, formed in 1987 when Louis Vuitton merged with Moët Hennessy in a $4 billion deal. This group was formed after the 1971 merger between Moët & Chandon and Hennessy. The French conglomerate is headquartered in Paris, France. The LVMH group comprises 70 houses. It is the only group present in all five major sectors of the luxury market, selling: Wines & Spirits, Fashion and Leather Goods, Perfumes & Cosmetics, Watches & Jewelry and Selective Retailing (LVMH Company - An Operational and Functional Model). LVMH has 70 brands, consisting of a retail network of over 3,700 stores and employing 120,000 employees worldwide (LVMH Company - An Operational and Functional Model). With...
Words: 2628 - Pages: 11
...-5000 LVMH Case Analysis By Kavya October 6, 2008 External Analysis for LVMH. Environmental analysis (PESTEL): See Exhibit 1 for comparison of PEST factors: Key findings on the analysis were: * The luxury goods industry was very sensitive to the fluctuation of the economy and any economic drift could have a great influence on its sales. * If the economy was depressed its sales growth went down sharply (e.g. SARS attack 2003) and so did the consumer spending for the luxury goods. * Socio cultural challenge for LVMH was to cater to the needs of the different target customers. (Middle class customers to elite group customers). * Although the luxury market seemed to be dull between years 2001-2003 there was a turnaround and the world economy was recovering enormously and LVMH net sales was still better than the average industry performance. * Positive economic climate (periods of relative prosperity with low interest rates and increased consumer spending), tax cut rates along with the optimistic attitude of the firm all favored the growth of LVMH. * There were enormous growth opportunities in new regions such as China, India and Russia. Inspite of the economic downturn, LVMH’s growth was positive and maintained its leadership position in the luxury industry. As the affluent middle class primarily drives the rapid growth of the luxury goods industry, LVMH needs to monitor them more closely and cater to their needs. Industry analysis: LVMH belongs...
Words: 3633 - Pages: 15
...Finale LVMH History A world leader in luxury, LVMH Moët Hennessy - Louis Vuitton possesses a unique portfolio of over 60 prestigious brands, almost 100,000 employees and more than 3000 stores around the world. The Group is active in five different sectors: ►Wines & Spirits ►Fashion & Leather Goods ►Perfumes & Cosmetics ►Watches & Jewelry ►Selective retailing In June 1987, a $4 billion merger was effected between Louis Vuitton with Möet-Hennessy, which allowed Louis Vuitton to expand its investments in the luxury business, while saving Möet-Hennessy from the threat of takeover. Moreover, the merger respected the autonomy of each company over its own management and subsidiaries. As Möet-Hennessy was three times the size of Louis Vuitton, its president, Alain Chevalier, was named chairperson of the new holding company, Möet-Hennessy Louis Vuitton (LVMH), and Racamier became executive vice-president. Massive disagreements and feuding followed, however, as management at Louis Vuitton believed that Möet-Hennessy was trying to absorb its operations. The 60 percent ownership that Racamier and the Vuitton family had held in Louis Vuitton became a mere 17 percent share of LVMH. After several disputes and legal battles between Racamier and Chevalier over the running of the conglomerate, Racamier invited the young property developer and financial engineer Bernard Arnault to acquire stock in the company. Hoping to consolidate his position within LVMH with the...
Words: 1053 - Pages: 5
...LVMH Group Phase 2 Aaron Ward-Quick BMGT495 Section 6981 Miriam Redcay UMUC Dec 7 2010 The retail environment is always a very volatile market and therefore is subject to the whims of the economy. The luxury retail market can be especially volatile because it usually depends on the spending of discretionary funds. The numerous companies which make up the LVMH, conglomerate are all luxury brands and all face this issue. Realizing this situation the LVMH, conglomerate has to plan to a degree to work around this issue and be successful. The success of any strategy in regards to business deals with the scanning of both internal and external environment to evaluate which factors most greatly affect the business. Companies should also examine their management styles from development to execution in order to develop proper planning strategy. As we know companies employ these strategies to gain advantages or protect their place in their specific market. LVMH is no different in this manor, as policy and actions show which goals they have and which strategies are to be put into place to implement them. We are going to examine some possible issues and strategies and the justification for those strategies in the near future for this company. The LVMH Group is one of the dominant forces in the Luxury Brand industries. Considering where LVMH is in consideration to the other brands in the Luxury Market the only real issue for the company lays in their end goal. The end goal which can...
Words: 2098 - Pages: 9
...LVMH 2012 — ANNUAL REPORT BUSINESS REVIEW CONTENT — Group’s profile 03 06 09 10 11 CHAIRMAN’S MESSAGE FINANCIAL HIGHLIGHTS INTERVIEW WITH THE GROUP MANAGING DIRECTOR GOVERNANCE EXECUTIVE AND SUPERVISORY BODIES A coherent universe of men and women passionate about their profession and driven by the desire to innovate and achieve. An unrivalled group of powerfully evocative brands and great names that are synonymous with the history of luxury. A natural alliance between art and craftsmanship, dominated by creativity, virtuosity and quality. A remarkable economic success story with more than 100,000 employees worldwide and global leadership in the manufacture and distribution of luxury goods. A global vision dedicated to serving the needs of every customer. The successful marriage of cultures grounded in tradition and elegance with the most advanced marketing, industrial organization and management techniques. A singular mix of talent, daring and thoroughness in the quest for excellence. A unique enterprise that stands out in its sector. Our philosophy can be summarized in two words: CREATIVE PASSION. 12 22 36 46 58 WINES & SPIRITS FASHION & LEATHER GOODS PERFUMES & COSMETICS WATCHES & JEWELRY SELECTIVE RETAILING — The values of LVMH Innovation and creativity Because our future success will come from the renewal of our product offering while respecting the roots of our Maisons. Excellence of products and service Because we embody what is most noble and accomplished...
Words: 48163 - Pages: 193
...Business presentation LVMH Good morning, everyone, The subject of today’s presentation is LVMH also know as Louis Vuitton Moët Hennessey. This is a holding company, a company that doesn’t produce goods or services but only owns shares of other companies. The presentation will last about 20 minutes and if you have any questions, we’ll be glad to answer them at the end of our presentation. Let’s begin by looking at our table of contents. As you can see we will start with business. This contains the competitors, projects, market position etc. Then we will discuss the 4 Ps and 4 Cs and finally we will look at the website. Well, that’s all I wanted to say about the table of contents moving on to our first subject of the presentation: the mission statement. Thank you for your attention, if there are any questions, we’ll be pleased to answer them. Core activities LVMH is the world's largest luxury goods conglomerate, they own around 60 sub-companies. We can say that LVMH has 5 core activities because these are the activities that are the most profitable. The group has a large variety of goods: Wines and spirits In this category you can find several kinds of alcohol. You have wine (Château d’Yquem), champagne (Moët & Chandon, Dom Pérignon and Veuve Clicquot), brandy (Hennessy), whiskey (Glenmorangie), vodka (Belvedere vodka) and rum (10 Cane). They have more than 20 different species of wines and spirits so it covers a big range of their products. Clothing...
Words: 1999 - Pages: 8
...LVMH Moët Hennessy Louis Vuitton in Luxury Goods - World October 2010 Downloaded from www.warc.com Scope of the Report Luxury Goods: LVMH © Euromonitor International Scope Disclaimer Much of the information in this briefing is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses found in the briefings may not totally reflect the companies’ opinions, reader discretion is advised Learn More To find out more about Euromonitor International's complete range of business intelligence on industries, countries and consumers please visit www.euromonitor.com or contact your local Euromonitor International office: London +44 (0)20 7251 8024 Dubai +971 4 372 4363 Chicago +1 312 922 1115 Cape Town +27 21 552 0037 Singapore +65 6429 0590 Santiago +56 2 915 7200 Shanghai +86 21 6372 6288 Sydney +61 2 9275 8869 Vilnius +370 5 243 1577 Downloaded from www.warc.com 2 Luxury Goods: LVMH © Euromonitor International Strategic Evaluation Market Assessment Designer Clothing and Footwear Luxury Accessories Fine Wines/Champagne and Spirits Super Premium Beauty and Personal Care Luxury Jewellery and Timepieces Brand Strategy/Operations Recommendations Downloaded from www.warc.com 3 Strategic Evaluation Luxury Goods: LVMH © Euromonitor International ...
Words: 7453 - Pages: 30
...1. Executive Summary Louis Vuitton Moet Henessy (LVMH) is one of the most demanded European leading corporations for luxury products. The corporation owns 60 different prestigious sub-divisional brands with more than 200 stores worldwide. In the current report, the LVMH’s distinctive major core competencies and the leading strategies will be analyzed in relation to its current external risk factors. The corporation’s sustainability is driven by its efficient strategic management of its internal and external environments. LVMH’s strength lies in its multi-divisional brand strategy which reduces the vulnerability to be influenced by particular external risk factors. The prominent positioning through mergers and acquisitions and the efficient human resource management also contribute to the corporation’s success in the market. However, as LVMH operates in the global market, external environmental factors should also be taken into account. These are, the changes of the global economic environments, structural changes of the major consumer market, and the risk of brand damage based on consumers’ perception. Since all these risk factors are both directly and indirectly related to the profit generation process of LVMH, this report will recommend some solutions to overcome the current risks, for example, focusing on its high profit products lines while it revise its low profit product lines. 2. Company background Since there have been dramatic growth of the emerging...
Words: 2516 - Pages: 11
...written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2013, Richard Ivey School of Business Foundation Version: 2013-04-04 SYNOPSIS Moët Hennessy Louis Vuitton (LVMH) enjoyed double digit growth and healthy profitability in 2010 and 2011. A large part of this growth had been driven by its flagship group Louis Vuitton (LV). In 2011, LVMH announced that long-time LV CEO Yves Carcelle would be replaced at the end of 2012 by Jordi Constans, an executive from the French food product multinational Danone SA. However, after serving less than a month, Constans was replaced in December 2012 by Michael Burke, an LVMH insider who had been with the company for nearly 30 years. While LV had enjoyed rapid growth over the last two years, the question was whether such a growth rate was sustainable. What were the challenges facing LV, and how should these challenges be addressed? HISTORY Louis Vuitton Malletier was born in 1821 in Anchay, France. At age 16 he moved to Paris and took up a job as an apprentice trunk maker, over time...
Words: 9810 - Pages: 40
