Group 2

Renita Agnevia-Y Paulus Vian-Russeno D Putra-Ery Dwiani

Dina Rizki A-Muhammad Faizal
 1815 Ardbeg
1828 Guerlain
1843 Krug
2
1846 Loewe
1849 Royal Van Lent
1729 Ruinart 1854 Louis Vuitton
1743 Moet & Chandon 1858 Mercier
1765 Hennessy 1860 TAG Heuer
1573 Wen Jun 1772 Veuve Clicquot 1870 La Samaritaine
1593 Chateau dYquem 1780 Chaumet 1895 Berluti

16th Century 18th Century 19th Century About LVMH

Product categories
Wine and Spirits
Fashion and Leather goods
Perfume and Leather Cosmetics
Watches and Jewelry
Selesctive Retailing
Other Business

20th Century 20th Century 21th Century

1908 Les Echos 1973 Sephora Domaine Chandon 2000 e.Luxury
1916 Acqua di Parma 1976 Cape Mentelle 2001 De Beers Diamond Jewellers
1925 Fendi 1977 Newton 2003 Cheval des Andes
1936 Dom Perignon Fred 1980 Hublot 2005 10 Cane
1945 Celine 1985 Cloudy Bay
1947 Parfums Christian Dior 1987 Parfums Kenzo
1952 Givenchy 1993 Chopin
1957 Parfums Givenchy 1995 Benefit Cosmetics
1963 Miami Cruiseline 1996 Belvedere
1998 Numanthia Termes
1999 Terrazas de los Andes
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Opportunities Threat

Political Era of privatization

ISSUE - Terrorist attacts : decline in

International travels
counterfeiting

Economic Globalization : Growth Economic Slowdown in

Opportunities across the world developed countries
Increasing competition

LVMH Profitability
declining the demand Specific treds in countries Declining demand for luxury
for luxury. The companys Social Consumer needs for quality goods
sales growth slowed in creative or distinctive design Companies highly dependents
Willingness loyalty to a brand on consumer preferences
late 2001 and early 2002 Willingness to pay premium Decreasing of global good
as affects of the terrorist price mood
attacks and lingering
global recession
Technology Rising of e-business Technological knowledge of
developing ecommerce
 4

P
Threat from new entrance
are LOW 02 Power of Buyers LOW
No Impact on premium price
Brand image established Brand Loyalty
O High level of knoeledge Differentiation between
R needed products
Capital requirement to
T acquire luxury brands
E
01
S
Rivalry within Industry
HIGH
5 Acquisition war
Domination of big groups
F
O
R
C
Power of Suppliers
E MODERATE
S
03
Rarely for some raw Threat of Subtitutes LOW
materials
Low switching 04 Conterfeit Product
 5

Internal Analysis
Consumer
Consumer are Direct Individuals
who needs luxury goods. (Maximum
Direct Consumers).
Buyers
Individuals buyers that buy product
through retailing stores. Specific
retailer (jewelries) department stores

Competitors Suppliers
GUCCI, HERMES, KERING, Raw materials suppliers
RICHEMONT, PRADA
Resources 6

Tangible
Star brands : Highly profitable and
rapidly
Companys growth : diversification
into a wild variety of luxury products
Locations : France
Intangible
CEOs capability : Arnault assembled
Value Chain Analysis
nearly 50 luxury brands
Human resources : training institute,
technical expertise, creative
designers, well trained craftsmen
Inbound Logistics :
Focus on Quality raw materials
Operations
Technical expertise on each business units
High control of quality
High productivity
Marketing & Sales
Marketing in the worldwide
Customer relationship management (pursue
cross selling opportunities) to create loyalty
Advertising the image of brand to increase
desire
Control of retail channels, company-owned
retail locations
Services
High level of customer services
Value Chain Analysis (cont)
Firm infrastructure:
Common internal communications system
(LVMH planet) lowed business to share
information
decentralization
Human Resource Management
Created its training institute, craftsmanship
(craftmen training and refined for long time)
Hiring very dedicated people who love the
brand
Technology Development
LVMH broad collection of business (6 business
inits)
Online information exchange system
Enterprise resource planning system
Cost savings from sharing technological
knowledge
Procurement
E-procurement of office supplies
 Competitive Advantage
and Core Competencies

Competitive Advantage Core Competencies

01 1. LVMHs corporate strategy : diversification
02 1. Corporate strategy
into a wild variety of luxury products 2. Craftmanship
2. Retail : control of retail channels use of 3. Online information exchange system
company-owned retail locations, online 4. Customer relationship management
information eschange systems
3. Human resources : training institute
 Current Strategy Problem Detection
Business level strategy : Corporate level strategy : Revenue is increasing as the
Differentiation Diversification (6 main profit is declining
business unit)
Cost of some business units
are higher than their revenue
fashion and leather goods
Fashion and Wine and Perfumes and cosmetics
leather good spirits
03 Selective retailing
Problem : too much
02 04 acquisition out of their core
Selective retailing Perfumes and
01 05 competencies
cosmetics

Watches and
jeweleries
 9

SWOT or TOWS Analysis

Strenghts : Weakness :
Powerfull and prestigious brand Focus on sales
portofolio Low revenue of some brands
Strong strategy of new product No deep focus in particular brand
launches
Share of resources between business
units
Organizational culture : decentralized
Opportunities :
Willingness to pay premium price WO
Rising of e-business SO
Spesific trends in different countries Market development Market development

Threats :
Declining demand of luxury goods WT
Counterfeiting
ST Concentrated growth
Incresing competition
Declining of international travels

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Perfume and Cosmetics

Weighted Weighted
Attractiven Strenght
Industry Attractive Fators Weight Industry Competitives Strenght Measure Weight Strenght
ess Rating Rating
Rating Rating
Market size and projected Relative market share 0.10 8 0.80
02 7 1.4
growth Cost relative to competitors 0.10 7 0.70
Intensity of competition 0.15 6 0.9 Ability to match rivals on key
0.15 6 0.90
Strategic fits and resources fits product attributes
with other industries in 0.1 6 0.6 Bargaining leverage 0.05 6 0.30
portofolio
Strategic fit relationship 0.10 8 0.80
Resources requirement 0.05 7 0.35
Technology and innovation
Emerging industry opportunities 0.20 7 1.40
0.1 8 0.8 capabilities
and threats
How well resources match KSFs 0.20 8 1.60
Seasonal and cyclical influences 0.2 7 1.4
Degree of profit relative to rivals 0.10 6 0.60
Social, political, regulatory, and
0.1 8 0.8 Sum of weight 1.00
environmental factors
Competitives strength rating 7.10
Industry uncertainty and
0.1 5 0.5
business risk
Sum of weight 1.00
Industry attractiveness 6.75
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Fashion and Leather Goods

Weighted Weighted
Attractiven Strenght
Industry Attractive Fators Weight Industry Competitives Strenght Measure Weight Strenght
ess Rating Rating
Rating Rating
Market size and projected Relative market share 0.20 9 1.80
0.20 9 1.80
growth Cost relative to competitors 0.10 8 0.80
Intensity of competition 0.15 8 1.20 Ability to match rivals on key
0.10 7 0.70
Strategic fits and resources fits product attributes
with other industries in 0.10 8 0.80 Bargaining leverage 0.15 6 0.90
portofolio
Strategic fit relationship 0.10 7 0.70
Resources requirement 0.10 9 0.90
Technology and innovation
Emerging industry opportunities 0.20 9 1.80
0.10 6 0.60 capabilities
and threats
How well resources match KSFs 0.10 8 0.80
Seasonal and cyclical influences 0.05 5 0.25
Degree of profit relative to rivals 0.05 7 0.35
Social, political, regulatory, and
0.20 8 1.60 Sum of weight 1.00
environmental factors
Competitives strength rating 7.10
Industry uncertainty and
0.1 6 0.60
business risk
Sum of weight 1.00
Industry attractiveness 7.75
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Watch and Jewelry

Weighted Weighted
Attractiven Strenght
Industry Attractive Fators Weight Industry Competitives Strenght Measure Weight Strenght
ess Rating Rating
Rating Rating
Market size and projected Relative market share 0.10 5 0.50
0.10 8 0.80
growth Cost relative to competitors 0.10 6 0.60
Intensity of competition 0.10 6 0.60 Ability to match rivals on key
0.05 4 0.20
Strategic fits and resources fits product attributes
with other industries in 0.10 5 0.50 Bargaining leverage 0.10 4 0.40
portofolio
Strategic fit relationship 0.10 3 0.30
Resources requirement 0.15 7 1.05
Technology and innovation
Emerging industry opportunities 0.25 6 1.50
0.10 7 0.70 capabilities
and threats
How well resources match KSFs 0.20 6 1.20
Seasonal and cyclical influences 0.10 4 0.40
Degree of profit relative to rivals 0.10 4 0.40
Social, political, regulatory, and
0.10 5 0.50 Sum of weight 1.00
environmental factors
Competitives strength rating 5.10
Industry uncertainty and
0.25 5 1.25
business risk
Sum of weight 1.00
Industry attractiveness 5.80
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Wine and Spirits

Weighted Weighted
Attractiven Strenght
Industry Attractive Fators Weight Industry Competitives Strenght Measure Weight Strenght
ess Rating Rating
Rating Rating
Market size and projected Relative market share 0.10 6 0.50
0.10 5 0.50
growth Cost relative to competitors 0.10 5 0.50
Intensity of competition 0.05 4 0.20 Ability to match rivals on key
0.20 6 1.20
Strategic fits and resources fits product attributes
with other industries in 0.10 5 0.50 Bargaining leverage 0.05 4 1.20
portofolio
Strategic fit relationship 0.10 5 0.20
Resources requirement 0.20 6 1.20
Technology and innovation
Emerging industry opportunities 0.05 7 0.50
0.20 6 1.20 capabilities
and threats
How well resources match KSFs 0.20 7 0.35
Seasonal and cyclical influences 0.15 7 1.05
Degree of profit relative to rivals 0.20 6 1.40
Social, political, regulatory, and
0.15 6 0.90 Sum of weight 1.00 1.20
environmental factors
Competitives strength rating 5.85
Industry uncertainty and
0.05 6 0.30
business risk
Sum of weight 1.00
Industry attractiveness 5.70
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Recomendation
Market development : Developing existing brand in emerging countries
Concentrate on emerging country : China, India, Latin America
Marketing : use of existing marketing skills to conduct market research to find
consumer insight in these countries.
Build partnership with local retailers
Pruduct development : Focus on developing product through e-commerce
Have online stores and social media webpage
The company will follow the existing organizational culture : share knowledge
between brands to save costs
Human resource : hire some specialized web designer to create websites

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