Louis Vuitton MÃ¶et Hennesey (Lvmh) Essay
Suppliers The power of suppliers could be considered medium. The industry is 100% dependable on a supplier that can assure a supreme quality. However the supplier has limited choices since the market is controlled by few operators.
Buyers Considering the buyer as the final consumer; where the decision to buy is nurtured by the fantasy and desire of style; buyers would only buy if all their expectations are fulfilled. In this context it is considered to be a medium competitive pressure since buyers can easily switch brands. However brand awareness and uniqueness can prevent the easy switching.
In the case of retailers as buyers; the competitive strength is considered medium. Shelf space is a key element for luxury companies. Indeed in the 20th century the expansion of the retail industry to specialty stores, chain stores and retail centres has changed the business. Discounts, cooperative advertising, volumes and exclusivity are some of the elements that put pressure on the industry (Frings 2005).
Moreover there is a possible integration strategy affecting the retailers' power.
Substitutes Considering the industry as a whole; the analysis should take in account the