LVMH

1 What is LVHM corporate strategy? What does B. Arnault mean by “star brands” and how
do they contribute to corporate advantage? Is there a common strategic approach utilized
in managing LVHM portfolio of luxury product businesses? Briefly identify the status and
business strategies that LVHM is using in each of its four business segments.
2 What is your evaluation of Arnault acquisitions? Has he diversified LVHM into attractive
industries? Does each luxury product hold a strong competitive position in its respective
industry? What does a 9-cell industry attractiveness/business strengths matrix displaying
LVMH business units look like?
3 Is there a good strategic fit among all the various star luxurious brands? What are the
value chain match-ups? What are the opportunities for skills transfer, cost sharing, or
brand sharing?
4 What are the financial characteristics of each of LVMH six segments? Which business
might be considered cash cows and cash hogs? Compare the financial performance by
segment in the period 1999-2001 to the1988 situation. Analyze the trends of the overall
financial situation of LVMH and give your assessment.
5 Based on the preceding analysis, what is your overall evaluation of LVMH business
lineup in 2002? Does the portfolio provide the company shareholders with an opportunity
of above-average market returns? Is its weak 2001 financial performance related to
cyclical downturn in demand of luxury products or a sign of portfolio weakness?
6 What strategic actions should Arnault carry out to improve the company financial and
market performance? Should LVMH undertake a portfolio restructuring to eliminate
certain businesses? Should they make additional acquisitions?