LVMH: Diversification Strategy into Luxury Goods Essay -- CGSE Busines

LVMH Diversification Strategy into high life GoodsStrategic IssuesBy 2002, Moet Hennessy Louis Vuitton was the worlds largest sumptuousness products smart set, enjoying annual gross sales of 12.2 billion euros. LVMH carries the most prestigious defect names in wine, champagne, fashion, jewelry, and perfume. Upon overtake of this luxury product industry, LVMH was aw ar that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, do consumers feel as though they must buy it, or else they leave alone not be in the moment, and thus will be remaining behind.The LVMH business concern portfolio began to take shape in 1987 with the merger between Louis Vuitton and Moet Hennessy which was a four billion dollar merger. Over the course of time, LVMH has acquired over 50 luxury brands, such as Donna Karen, Fendi, and Sephora. They c entirelyed it, a collection of star brands and locomote stars. LVMH foun d this industry to be timeless and modern, highly profitable, and very fast growing.Despite all of the above mentioned, LVMH did experience some bumpy times. approximately of these times were induced through internal problems, while others were caused by externalities, equivalent Sept. 11. With such a wide range of product offerings, LVMH was on poll of the industry in certain aspects, but has room for growth in other areas. One instance in particular nearly caused a division in the company. Hennessy believed the company should focus on wine, spirits, and champagne, however Vuitton treasured to focus on fashion and leather goods. The decision fell into the transfer of Bernard Arnault, who became president of LVMH, and sided with Hennessy.Analysis and EvaluationUnder Arnault, the company was the worlds leading luxury product group. Arnault believed that LVMH control of retail chains was unfavorable to luxury brand success. The finer points of retailing were believed to be, inf luencing of the overall image of luxury products, as much as the product attributes.LVMH was able to broaden the companys media operations, create new retail outlet, enhance their line of champagne, and propagate fashion houses, like Fendi. LVMH found their corporate strategy was diversification into a wide variety of luxury products. They grouped all of their brands into six assorted business units. Their wine/spirits unit poss... ...at divulges attention to a few aspects in order to do it the best, as opposed to LVMH who does it all.RecommendationsIt is important for LVMH to watch to distinguish themselves from other luxury brands, and by continuing to acknowledge that their products are desires and not necessities. They sell luxury, and image. It would be advisable to have better dealings with their customers, to sum up customer loyalty, but to also get into the minds of the consumer to give the consumer what they desire, all the while staying ahead of the competition. Rese archers should be assigned to from each one specific business unit it would be a good idea to treat each unit as a separate entity, all-contributing to the same end. By individually enhancing each unit, and eventually collaborating in the end, LVMH will be most profitable. net income ventures are very important, we live in a time that thrives on technology, and making efforts easier for consumers will be key. Continuing to portray an image or a message with each product will contribute to the brand differentiation. The continual acquisition of profitable names and organizations will continue to increase the profitability of LVMH.