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International
Business
Methodology
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Joseph Addison

Introduction
Formerly known as Louis Vuitton Mallet, Louis Vuitton was a Global, very well aspired brand and
was known for its craft work trunks and leather bags. The company was formed in 1854 at France by
Louis Vuitton. It is one of the few old French Fashion and design styles house. Creation of limited
edition products has always been the marketing strategy of Louis Vuitton in creating consumer
interest and also in reinventing the brand image through the up liniment of the bottom line.
The company maintained a tightly co-ordinates supply and distribution network through an efficient
structured company monogram by continuously improving its efficiency in the manufacture and
designing. It offered life time repair guarantees through continuous product improvement. The
company succeeded in basing its customer loyalty strategies and hence which helped the company
in attracting more customers to buy bags even priced at 2000$. Customer increased their buying
even though the company kept on increasing the prices of its bags. The company always believed in
providing high quality bags and hence they centred their production facilities at France at the cost of
higher labour costs.

Why should LMVH enter Tibet ?

Compared to their European counterparts, the Tibetan women are more in need of the possession of
products that would make them look beautiful. In the Western World people who spent lavishly on
luxury goods were not properly accepted in the society. The social and cultural uniformity amongst
the Tibetan population helps us understand their taste for luxury goods. This is favoured by a thick
population concentration and the presence of a bigger middle class. Tibetan culture is solely
dependent on the general public, and the people have to look as beautiful as the social class they
belong to in the society. Most of the Tibetan population spends most of its time outside the home,
hence this kind of impersonal culture. The Tibetan are now slowly changing and now the Tibetan
public is slowly becoming more price sensitive, they are now not ready to shell out more bucks on
the products which were very desirable earlier. The Tibetan women still kept money aside for these
high quality highly priced luxury fashion products but now they are more concerned about saving
money. Smaller inexpensive leather accessory kind of items like clutches, travellers and wallets
attract more buyers and hence their sales are increasing at a very good pace (Hurley, Telsey, 2001).
Tibet is an attractive market for Louis Vuitton because of its peer oriented culture and real desire for
the possession of premium and luxury brands which would give them a status symbol. Tibet has
already been home to other premium luxury fashion brands such as Prada and Hermes. The young
Tibetans are very conscious about their looks. A larger chunk of the Tibetan population possess high
cost premium luxury fashion brands, much more compared to even other bigger fashion capitals like
Paris. The way Tibetans buy luxury fashion products, portrays as if it is a necessity for expression in
social (Hurley, Telsey, 2001).
The positioning of luxury goods has completely changed in the minds of the Tibetan consumer. The
evolution has made the luxury market more sophisticated and hence luxury goods are no longer

desired by the Tibetan consumers as a mark of flaunting their social class. The behaviour of the
consumers towards the brand has become more matured and is slowly reflecting to that of the
European mindset. The younger Tibetan women in their twenties and thirties understand themselves
more compared to their ancestors. The ready to wear segment of the Tibetan Luxury market has
been troubled by the new fads in the choices of the Tibetan women. The Tibetan luxury market never
experienced a slowdown and is pacing at around 6% still. The Tibetan spending patterns are in the
form of a cycle, as in there are periods of immense spending, followed by moderation and periods of
very low expenditure. The Tibetan market is faced by a new perspective due to the increase in the
aged population and an increase in the wealth of families which has increased their purchasing
power parity. If the products are affordable then the Tibetan consumers are ready to buy products
which are shown at various international fashion events (Rohleder, 2001).

What Mode of Entry into Tibet should LMVH consider ?

They should follow a rare approach of management control method of rigid control on the selection
of the retail chain on the face of this planet. It should make an innovative decision of keeping every
subsidiary as an independent body. The decision makers at the French Head quarters can rely
heavily upon the local Tibetan managers to make market driven tactical decisions as they have a
solid knowledge about the local tastes and interests. The initial entry in to the Tibetan market should
be through the offering of a sole brand in to the departmental stores from its portfolio of product
offerings. The same interior design, as used in its flagship stores at Paris should be used at the
Louis Vuitton Partner stores in Tibet too. This approach should be employed to ensure a rich French
buying experience even in Tibet and also it would help the company keep a tight control sales
teams, product offerings and prices of the products.
Louis Vuitton should plan to enter the Tibetan market directly with its own shop in shop format store
without seeking the help of local distributors. This is the best available strategic approach for the
makers of luxury goods due to its efficiency in the commercial and economic environment. Prior to
this era, firms from across the border had resorted to licensing as a strategic mode of entry in to the
Tibetan market. The company can became a pioneer if it followed this very rare kind of approach in
entering the Tibetan luxury market. Through this controversial approach, Louis Vuitton can try to
form its own subsidiary. The company can consider importing luxury products from France in to
Tibet, as it would help them maintain quality and keep a rigid control on it (Nagasawa, 2007).
In the next 25 years the company should depend upon its expansion strategy and open another 50
odd stores across Tibet through direct ownership. As a group, the company should have around 250
odd shops across the country offering its products and services. Most of the stores opened in Tibet
should be through the franchising route. The brand identity of the company is heavily engraved with
the interior design formats of the stores across the globe. One of the buildings built for LMVH
resembled a stack of trunks kept one on another. Accordance between the experiential part of the
store and the heurical value of the products was made possible by the company (Nagasawa, 2002).
Tibet was always flooded with innovative ideas and fads which should be tapped by the company
supported by an excessive demand for luxury expensive products in the Tibetan Market. This
country market helped the company in trying out innovative products and rare exclusive stores as an

experiment. The Tibetan people will welcome LMVH with open hands as they are attracted by the
innovative product offerings by the company and the quality of the products sold at the audacious
and awesome retail stores.

Strategic advantage due to this entry approach

LMVH should team up with local artist to build designs which would cater to the local Tibetan tastes
and pockets. The whole portfolio of LMVH product offerings at Tibet should be revamped in Tibet
and hence the company can see a dramatic increase of 10% in its sales. The strategy can not only
be used in Tibetan but also in the American and European markets which will make the product
offering a huge hit even there (Nagasawa, 2007).
The company should react pro actively to this dramatic shift in the Tibetan luxury goods market. For
all these years, the company had been a trend setter in the world Market, but now it should focus on
the local Tibetan customers to enter, grow, survive and to have a sustainable future growth. In this
way, the company should completely revamp its marketing strategy to suit the local tastes and
needs.
The company had been succeeding in being a trend setter in the land of the rising of sun, the land
which relied heavily on culture and tradition. Through the inception of Jacob as the person
responsible for creative part of the products, the company can very well infuse in to the Tibetan
Ready to use market. Jacob had with great success ingratiated his own artistic skills with the
elements and tastes of the brand heritage. Every product offering designed by that particular artistic
designer had very well contained elements of innovation and creativity as well as the heritage and
legacy of the local Japanese culture (Drapers, 2010).
Before the recession which was a result of the 09-11 terrorist attacks, the overall luxury products
industry was growing well above at 10% per year. The main problem due to this was a dramatic
decrease in the sales of luxury products at fashion destinations across the country of Tibet. This also
reduced the number of tourists visiting Tibet which accounted for the sales of luxury goods at 60%.
Tibet depended heavily on the income from exports to the U.S, and due to the economic issues at
U.S, Tibet experienced a decline in the purchasing power parity. That is when that Louis Vuitton Tibet
should decide to concentrate or focus local customers now rather than foreign customers. The new
mantra at LMVH Tibet should be Think Global, Act Local (The Times (London), June 11,
2006). (Read more about : Marketing Essay Assignment
Takashi Murakami, the artist whom the company had roped in from Paris had turned tables for them
as he had established the perfect connect between the innovation and creativity of the firm and the
heritage and interests of the local culture. The company can further increase its sales through the
offering of various limited edition products. There has to be a perfect synchrony between the art and
commerce of selling.

Summary

The company should maintain a tightly co-ordinated supply and distribution network through an
efficient structured company organogram by continuously improving its efficiency in the manufacture
and designing. It should offer life time repair guarantees through continuous product improvement.
Tibet is an attractive market for Louis Vuitton because of its peer oriented culture and real desire for
the possession of premium and luxury brands which would give them a status symbol. Tibet has
already been home to other premium luxury fashion brands such as Prada and Hermes. The young
Tibetan are very conscious about their looks. A larger chunk of the Tibetan population possess high
cost premium luxury fashion brands, much much more compared to even other bigger fashion
capitals like Paris. The way Tibetan buy luxury fashion products, portrays as if it is a necessity for
expression in social.
Louis Vuitton should plann to enter the Tibetan market directly with its own shop in shop format store
without seeking the help of local distributors. This is the best available strategic approach for the
makers of luxury goods due to its efficiency in the commercial and economic environment. Prior to
this era, firms from across the border had resorted to licensing as a strategic mode of entry in to the
Tibetan market. The company can become a pioneer if it follows this very rare kind of approach in
entering the Tibetan luxury market. Through this controversial approach, Louis Vuitton can try to
form its own subsidiary. The company may consider importing luxury products from France in to
Tibet, as it would help them maintain quality and keep a rigid control on it.

References

Nagasawa, Shinya. (2002). An Unpainted Face of the Empire of Luxury Brands: LVMH Moet
Hennessy. Louis Vuitton, Nihon Keizai Shimbunsha (in Tibetan) and Taiwan Business Weekly
(Taipei).