Louis Vuitton Case Analysis
Key Issue Louis Vuitton is a flagship group of LVMH, which had double digit growth during 2010 and 2011. Michael Burke, the new CEO of LV group is uncertain about whether the group can grow sustainable. The main issue he current encounter is that how to push LV to grow steadily and protect LV’s values and heritage from being undermined.
PESTEL Analysis Political: The global luxury goods market can separate into America, Europe, Japan, Asia-Pacific, and rest of countries by region. Overall, the major luxury goods consumption countries have relatively stable political environment in recent years. However, in southern Europe, the
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Sociocultural: In the global luxury goods industry, most of customers regard luxury goods that made in Europe as more valuable products than those made in Asia and US. This behavior brings competitive advantages to the European luxury brands. Moreover, customers in different countries have different purchase behaviors. For instance, some countries’ customers are willing to move away from common recognized brand, because they want to purchase more exclusive products. Furthermore, because of the increasing speed of globalization, people are more likely willing to travel between different countries. These travelers will buy luxury good during their trips. In fact, Chinese tourists contributed over one third of sales in Europe. The luxury goods industry should notice to adjust the actual demand between local people and tourists in Europe region. Technological: As the popularization of online shopping method, most of luxury companies opened their online shop to provide more convenient shopping experiences for customers. This method can help companies reach more potential customers who live in areas that do not have brands’ physical stores. The technology development also helps the industry manufactories products more efficiently. The introduction of automotive machine partly reduced employees’ level of specialization and increased productivity. However, the improvement of automation also can undermine the appeal of the