Biggest luxury-goods firmJapan being its profitable market, contributing 50% to its profitabilityBy 1989, it has entered 130 countries across the worldAfter conglomeration, LVMH has been into 5 business divisions: Fashion, leather

goods, selective retailing, wines & spirits, perfumes & cosmetics, watches & jewelry Bernard Arnault bought the company in 1989Boost in manufacturing productivity by 5% per year,200030% hike in earnings in 2003Success of new line product, Murakami in 2003Focused on problem solving, whenever problem arises, in more efficient way(zipper

problem)Advertised through every possible medium: print Ads, billboards, magazines, Ads on

TV etc.Adopting expansion strategy by 2007New strategy adopted by focusing local customers in JapanWorking on reinventing itself and regained what it used to be in JapanFocusing children as well now

Establishing the brand as a consistent trendsetter in highfashion Attracting young buyers is a big problemTo maintain the same brand in JapanVL’s move into new product line could result in Brand

Dilution, is a big problem.Problem arising due to counterfeit of LV products from

Seoul, Hong Kong, Tokyo, Los AngelesJapanese consumers’ eagerness to buy LV bags at

inexpensive priceChange in Japanese mindset after global recessionMarket leading towards saturation.

LV had been following aggressive marketing strategy in the country,opening extravagant stores

Japan contributing 20% to its revenue and 25% contribution is done byrest of Asia(exhibit 4)

LV has decreased its investments in Fashion & Leather goods The more the prices were raised, the more the customers come

back(Brand building focused) Young buyers were attracted by Brand Image and older clients by quality

and lifetime free repairs Manufactured products in France, bearing the expenses of high labor

cost. Cultivated a celebrity culture and employed famous models and actresses

Situational Analysis

Reducing dependency on Japan by focusing on otherdeveloping countries

Reduce the no. of limited edition throughout the year. Generating awareness among children by using Social media Focusing high-end consumers through LinkedIn Limit its product line, which is leading to customer suspicion Launch a new brand and use predatory pricing to kill

counterfeits.

Problem Definition

Recommendation

Sonia Grover