explain the performance (or competitive advantage) of the firm * Building Blocks of Competitive Advantage (another way of identifying resources and capabilities): * Does the firm have resources or capabilities that explain one of the following building blocks? * Superior Efficiency * Superior Innovation * Superior Quality * Superior Customer Responsiveness * If so, then they are distinctive and create a COMPETITIVE ADVANTAGE (either differentiation or
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Louis Vuitton Case 1. According to HSBC in February 2009, Japan was the final destination of 45 percent of luxury goods sold worldwide. According to Claudia D’Arpizio, Japan is the world’s largest market, consisting of the highest per capita spending for luxury goods. Japan is known for a group-oriented culture, which creates pressure for its citizens to possess luxury, status-driven products such as Louis Vuitton (LV). This makes the Japanese luxury market easily penetrated by new and
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highly competitive due to a low marketentry barrier. It has experienced ups and downs during the 2000s. And in recent years, the industry has recovered and developed rapidly. More and more luxury goods corporations have expanded their operations in emerging markets through Internet and e-commerce. The future outlook of this industry is optimistic. The competitions in the luxury goods industry are pretty intense. Many competitors of Coach are from France and Italy such as Louis Vuitton, Hermès
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Gucci is positioned bellowed Hermes and Chanel and they are on par with Prada and Louis Vuitonn. LVMH appears to be the best positioned brand based on their having the highest operating margin and also the fact that they own their distribution networks. This, coupled with their negotiations with other suppliers allowed for them to enjoy discounting advertising benefits by as much as 20 percent. LVMH was also able to move 70 percent of their previously out-sourced distribution back in-house.
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women as well as other items such as luggage, wallets, shoes, belts, and other accessories as well as a line for men. Coach’s strategy focuses on matching luxury rivals in quality and style, but beating them in price by at least 50%. With this price advantage they attract more of a middle-class consumer as well as upper-class consumers. Another key part of their strategy is their multichannel distribution model. This model is made up of indirect wholesales to third-party retailers, but it also focuses
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Industry Overview 5 Apparel and Accessories Industry 5 Luxury Products Industry 5 Michael Porter’s five forces model 8 Competitive Force 1: Rivalry among Competing Sellers (Moderate) 9 Competitive Force 2: Threat of New Entrants (Low-Moderate) 9 Competitive Force 3: Threat of Substitute Products (Moderate-High) 10 Competitive Force 4: Bargaining Power of Suppliers (Low) 10 Competitive Force 5: Bargaining Power of Buyers (Low) 11 Industry Driving Forces 11 Increasing Globalization 12 Marketing Innovation
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many markets. Consumers have a wide range of products and services to choose from yet they are becoming more alike due to trends in technology therefore a brand needs to be more than just a symbol, logo, name or design. In order to gain a competitive advantage, brands are adding other dimensions that create a unique and meaningful identity in consumers’ minds. These brand associations are also known as points of difference. However, some associations are ‘not necessarily unique to the brand but may
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Carolina Herrera has identified a market niche that demands garments, apparel and accessories and to which it can offer a somewhat differentiated product with excellent quality. This market niche is the target of several companies such as Loewe and Vuitton, which may be clearly identified as the leading companies and worldwide references. In this scenario, the question of which internationalization strategy must be pursued to access the luxury fashion product market should be raised. A Benchmarking
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current rate of 7.7% China is one of the fastest growing economies in the world and the only one of its size to grow at this rate. - Social factors: The increasing tendency of the Chinese population to adopt the international brands is a huge advantage for the luxury goods suppliers. A survey conducted by Bain & Company (2010) shows that the international luxury brands have seen
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LVMH Introduction to the company: Louis Vuitton Moet Hennessy (LVMH) is the world’s leading luxury goods group, and is present in all luxury sectors. The group’s portfolio consists of 60 different brands with more than 2,400 stores worldwide and is divided into five different strategic divisions: Wines and spirits; Fashion and leather goods; Perfumes and cosmetics; Watches and jewellery; and selective retailing. Their parent company is Christian Dior S.A., which holds 42% of LVMH shares and 59%
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