Swot Analysis Louis Vuitton

Strengths :
Louis Vuitton’s quality reputation: they qualify themselves as a traditional brand( long history) and as the largest producer of Luxury Goods . they tend more recently to become creative . Consumers across the world : European countries (21% , United States but also a new emerging market in Asia (27% in 2011) *

Bernard Arnault named Marc Jacobs in 1997 as an artistic Director of Louis Vuitton Marketing with different star icons : Gisele Bundchen ,Gorbatchev , Caterine Deneuve, Bono , Keith Richards , Madonna => helps to identify to the product . Project an image of the product. They sell their product only in their own stores , in Paris , London , New York , Asia ( new Chinese store opened in Shangaï ) called « maisons ».This permits to stay leader in the sell of their product ,and avoid any discount sales , or promotion of their product. Tight Control on the quality, and the sell of their product . Personalize your own wallet, bags and other leather goods : « Mon Monogram » . It adapts its design to consumers’ tastes.

Louis Vuitton continue to explore new markets , THIS will enable Vuitton to continue producing double-digit growth for years to come: They opened their first shop in Latin America : Sao Paulo , another store in China in Shangaï( 39 boutiques in China others in Beijing, Changchun…).=> aims at projecting exclusivity for top-ends costumers . Being too accessible can lead to “banalization,” The Paris company, which doesn’t anticipate a slowdown in second-half sales in China, plans to protect its image by limiting store expansion, opening at most 20 shops worldwide in the next five years, he said. *

Growth of 17% for the clothes and bags => Growth of 25% for the whole group in April 2012. Online website which allows customers to buy Louis Vuitton products everywhere in the world. Vuitton sells reasonably priced handbags—the smallest Speedy Bag costs €430 in Paris *

Weaknesses :
Louis Vuitton even though try to be creative with the new designer Marc Jacobs , remain very classic , and don’t update their collection. ( collection of last year inspired by nazism, inspired by the movie the porter … , constant evolution, pushing too far) They sell their products at very high prices , their customers represent a certain elite . They tend to target rich and wealthy customers. They don’t do discount sales

Were it not for Vuitton, estimates one analyst, LVMH’s sales would have fallen by 3% in the first half of 2009 and profits would have plunged by 40%. In normal times Vuitton contributes about half of the group’s profits, and most of the rest comes from Moët Hennessy. In the first half of this year, however, Vuitton contributed an estimated 70% of profit. That leads some people to question whether LVMH is overly dependent on the leather-goods firm. *

Threats of New Entrants of Luxury Industry in Emerging Markets : Lancome ,Gucci , Chanel… *  Banalization of Louis Vuitton but it is difficult to reach the brand. *

Opportunities :
Louis Vuitton even though is traditional and reliable , needs to extend its product range : as it started for its personalized products line « mon monogram » Possibly endorse their products in movies : as they do for the movie Charade with Audrey Hepburn. REPOSITIONING : Vuitton has since rapidly established a strong position in what it hopes will become another Japan: China. “The Chinese consumer is in a love affair with the Vuitton brand,” says Ms Flouquet. According to LVMH, in the first half of 2009 sales to Chinese people (at home and travelling) made up 18% of Vuitton’s revenue. Despite widespread concerns about counterfeiting in the country, the Chinese are now Vuitton’s biggest customer base after the Japanese.

Threats :
Counterfeit : there are lots of fake products in the market , being passed on as Louis Vuitton. Bernard Arnault CEO of LVMH wanted to get his fortune out of France in order to avoid taxes . This was a scandal that tarnished Louis Vuitton’s image. Ethical problem : there had been many protestations in 2006 in front of their parisian store because they used real fur for their decoration and accessories . Many scandals with some singers ( Britney Spears ) or Movies ( The Hangover II) for using « false » Louis Vuitton Bags ,with the Louis Vuitton logo. Five or so years ago Vuitton depended to a large degree on one market, Japan. Most Japanese women owned at least one Vuitton product. Yet the Japanese market for luxury goods was souring. Spending on such items in Japan has fallen sharply since the end of 2005, according to a recent report by McKinsey, a consulting firm.

Young women are more individualistic than their mothers, and are seeking out lesser-known brands. Now, Chinese tastes are changing in ways that may hurt the brands that expanded most aggressively in the country. Chinese are becoming much more sophisticated about the products that they buy,” said Fflur Roberts, global head of luxury goods research at Euromonitor in London. “It’s not just about the bling aspect.” China is the world’s fifth-biggest luxury market, accounting for 92 billion yuan ($14.6 billion) of sales in 2011, according to Euromonitor. Vuitton remains known for high quality, but the work isn’t all artisan. Indeed, last year two of its ads showing workers making things by hand were banned by Britain’s advertising watchdog for potentially misleading consumers.

* Recommendations for Louis Vuitton
They should create a special line , collection more affordable , more accessible to people. However, this collection would have lower prices , it would not decrease the quality , or ternish the brand image. Maybe they could use more excentric , original and less expensive materials ,so that their prices would be lower , and the brand would be less traditional. Maybe Louis Vuitton should begin some collaborations with movie makers or some artists . So that it will make us some advertising , and communication and increase the desire of brand in customer’s mind . And that will avoid Louis Vuitton some useless and silly scandals ( like Britney Spears or the Hangover)

Political impacts on Louis Vuitton :
The Anti-Counterfeiting Trade Agreement (ACTA) aims to establish an international legal framework for targeting counterfeit goods, generic medicines and copyright infringement on the Internet, and would create a new governing body outside existing forums, such as the World Trade Organization, the World Intellectual Property Organization, or the United Nations. a response to “the increase in global trade of counterfeit goods and pirated copyright protected works”

Technological impacts on Louis Vuitton :
Its factories use techniques from other industries, notably carmaking, to push costs down ruthlessly and to allow teams of workers to be switched from one product to another as demand dictates. It has adopted methods of quality control, too: one quality supervisor came from Valeo, a French auto-parts supplier. The result is long-lasting utility, beyond show, which is valuable in difficult times.` Vuitton’s growth over the years means it is constantly bumping up against its full production capacity. The company owns 17 factories that manufacture bags and accessories. The new site, in Marsaz, could accommodate all of Saint-Donat’s 200 workers plus some. Each step of production was analyzed for potential gains. The program determines where to cut out the dozens of different pieces of a bag, a process that has drastically reduced the amount of wasted leather. *

New website : online shopping
App : first social network for luxury travel. “Amble with Louis Vuitton”, is an avant-garde iPhone application that meshes perfectly with the Louis Vuitton City Guides. Designed for chic, modern travelers, the app shares the favourite addresses of stars in the world’s great cities.

Read more: http://theasiacareertimes.com/2011/05/louis-vuitton-creates-its-own-luxury-social-network-for-travel-discover-amble/#ixzz2CdBMdZ3b New line for
Apple products such as iPads , iPhones…

Environmental Impact :
In 2004, LVHM conducted a Carbon Inventory and displayed the results at the World Exposition in Japan and making adjustments where necessary. For example, when it was discovered that air transport was their biggest contributor to greenhouse gases (coming in #1 at 37%), they shipped instead. In 2006, 60% of leather goods were transported by sea. They’ve eliminated unnecessary plastic wrapping, their buildings have become more energy efficient, and so on. Louis Vuitton North America announced that 15% of all sales made through their online store would be donated to The Climate Project. Louis Vuitton has been actively pursuing efforts to reduce its carbon footprint and overall impact on the environment over the past few years.

reviewed transportation methods of products (use of sea, river and rail wherever and whenever possible)
reviewed packaging (use of eco-labelled paper for all packaging)
reviewed store energy consumption (all new stores consume 30% less energy due to new lighting concept)
reviewed all environmental friendly actions at Louis Vuitton headquarters (which has received the ISO 14001 certification in Octobern 2008)
created green buildings (Louis Vuitton central warehouse in Cergy, France (2007); Louis Vuitton Shoes Workshop in Fiesso, Italy (2009)…)
created an internal “Environment Task Force” worldwide to exchange best practices between different regions and countries http://www.louisvuitton.co.uk/front/#/eng_GB/Journeys-section/Values/Environment Louis Vuitton gave some money to Red Cross in Japan after the natural disaster of March 2011

Reflective essay :

Consistent about our presentation ,
Add more substants , supports about the whole presentation.
Take a look of guidelines and FAQs
Referencing , Structure and Layout.
Not restate the swot peest …try to be objective , and think what we could have done better. It should not be a complaint session.provide more information about what the group was talking about.what would have been the result if we had more time ? How do we think this could be improve ?

The PEEST Analysis analyses which aspects of the macro environment influence the company and how. Political factors that can impact on Louis Vuitton are surely anti counterfeiting laws. For instance the Anti Counterfeiting Trade Agreement settled in October 2011 in (USA, Canada, Japan…) is banning counterfeited products . Colbert Committee in France launched a huge campaign against counterfeited luxury goods . As we know it, Louis Vuitton is constantly counterfeited and it leads to a loss of earnings. Also counterfeited goods are poor quality products and the brands counterfeited can be associated to this quality issue. Therefore, consumers have a negative view of the brand. Anti Counterfeiting laws can help Louis Vuitton solve this problem.

Economically , Louis Vuitton is not affected by the recession. The 2009 Economist Figures prove Louis Vuitton participates in half of the profits of LVMH group (70%).Louis Vuitton sales in 2011 reached 6.5 billions of euros . Another economic fact that can have an impact on Louis Vuitton is the growing power of emerging countries .A few years ago, Louis Vuitton used to depend strongly on Japan. However, for the past 20 years ,China’s economy soared by 9.5% and India by 6%. “The Chinese consumer is in a love affair with the Vuitton brand,” says Ms Flouquet and according to LVMH’s data , 18% of Louis Vuitton’s sales were released in China in 2009.China is now their biggest customer after Japan. Ecologic issues had a lot of impact on Louis Vuitton. They had been through several changes.