“Building Empire of Desire in China” LVMH

Angelica Joyce T. JacalneBA 190 - Strategic Management

University of the PhilippinesProf. Mita Angela M. Dimalanta

• Formed in 1987 through a merger of two fashion houses: Louis Vuitton and Moët Henessy

Flagship Brand

MISSION“The mission of the LVMH group is to represent the most refined qualities of Western “Art de Vivre” around the world. LVMH must continue to be synonymous with both elegance and creativity. Our products, and the cultural values they embody, blend tradition and innovation, and kindle dream and fantasy.”

Serves as the “vision”

of LVMH

Commonly associated with

“Luxury”

Why is LMVH so successful in China?

LUCK= Preparation + Opportunity

At the Right Place and the Right Time

Luxury Brand

Chinese people love

Luxury Goods;

China is the world’s biggest luxury market

• China market for Luxury goods is very advantageous for LVMH since Chinese love luxury goods like Louis Vuitton.• LVMH expanded in China where the

Chinese population who love luxury goods is growing.• Only a few competitors were present

when LVMH expanded to China, thus LVMH had the first-mover advantage of luxury brands in China• Region expansion, not country expansion,

made LVMH more flexible and allowed LVMH more options on how and when to expand

Issues on handbags and accessories displaying and not displaying Louis

Vuitton logo

• LVMH is a luxury company and works on uniqueness (as stated in their mission).

Implications of issues on handbags and accessories displaying and not displaying the Louis Vuitton logo• LVMH is no longer viewed as “one-of-a-kind”

since there are a lot of products showing their logo.• LVMH’s status as a luxury brand dropped and

became a common brand for Chinese due to its identical and constant designs of their products.• LVMH’s status as a luxury brand may be

sustained when they used their logo as an accent and not as the pattern or main design of their products – it projected class and elegance, which further promoted uniqueness.

How can LVMH use its strengths to overcome threats

from counterfeits?China has lack of enforcement in

protecting Intellectual

Property Their products are easy to imitate and reproduce

How can LVMH use its strengths to overcome threats

from counterfeits?Focus on

custom made-to-order designs

Capitalize on Quality

SERVICES (especially on the “Maison” invite-only boutiques

Given the backlash in China against Conspicuous Consumption, what

recommendations can you give to LVMH?

Focus on expanding in second and

third tier cities where people still

crave luxury goods

Capitalize on the

uniqueness of LVMH’s

products

Focus on the customization

of products

Diversify the Product Lines

and Mixes

More for more strategy (building on the “brand”)

Offer products in China that are not

offered in other Louis Vuitton international

branches

Improve and Develop the idea of

“Maison” with invitation only floors

Capitalize on Quality Service

Create limited edition bags (ex. A bag that has only 6 stocks avalaible)

• 85% of women in Japan own a Louis Vuitton product

• Japan’s Intellectual Property laws are properly implemented

• Japanese culture hates fakes or counterfeits

• Japanese people encourages ownership of original branded products

EXPAND TO

JAPAN

Reference : Rothermael, F. (2015). Strategic Management. McGraw-Hill Education, New York