LVMH

World's Largest Luxury Goods Conglomerate

Introduction
Full name (Mot Hennessy Louis Vuitton S.A.) Founded in 1987. Grew in the 1990 under leadership of Bernard Arnault through acquisition and development of new products. 56000 employees in 2003 with 12 billion Euros in revenue.

Divisions
Wines and Spirits Fashion and Leather Goods Perfumes and Cosmetics Watches and Jewelry Selective Retailing

Luxury market
Traditionally ,luxury sector has been fragmented, characterized by large number of family owned and medium sized enterprises. In the past 20 yrs it has been increasingly dominated by multibrand conglomerates. World luxury goods market sans cars stands at $58 billion.

Full list of LVMH Brands

Wines and Spirits Mot & Chandon Dom Prignon Veuve Clicquot Krug Mercier Ruinart Chteau d'Yquem Hennessy The Glenmorangie Company Belvedere Domaine Chandon California Bodegas Chandon Domaine Chandon Australia Cloudy Bay Cape Mentelle Newton Terrazas de los Andes Cheval des Andes Cane Rum Wenjun Numanthia Fashion and leather goods Louis Vuitton Loewe Cline Berluti Kenzo Givenchy Marc Jacobs Fendi StefanoBi Emilio Pucci Thomas Pink Donna Karan NOWNESS Fashion and leather goods Parfums Christian Dior Guerlain Parfums Givenchy Kenzo Parfums Benefit Cosmetics Fresh MAKE UP FOR EVER Acqua di Parma Perfumes Loewe Emilio Pucci Parfums Fendi Perfumes Watches and lJewelry TAG Heuer Zenith Hublot Dior Watches FRED Chaumet De Beers Selective Retailing DFS Miami Cruiseline Services Ephora Le Bon March Rive Gauche Samaritaine

Functioning of the LVMH Group

Decentralized into production and distribution subsidiaries. Decentralization helps foster efficiency. Gives each brand almost complete freedom to pursue its creative vision. Synergy realized thru advertising discounts. Entrepreneurial executive teams.

Luxury for the Masses

Trend in market towards mass elitism. According to BCG, new luxury ranges from personal care, home wares and appliances, oral care ,toys restaurants and wines. Consumers often address feelings of being overworked, isolated, lonely ,worried and unhappy by shopping for premium products. Premium purchases gives them a sense of indulgence and personal fullfillment.

Market Trends
Luxury sector is cyclical and partially correlates with economic conditions. Current luxury market drivers are Japan, western Europe, and United states Eastern Europe and china are emerging markets for luxury goods.

Competition
Growth and acquisition strategy has become the key strategy for all major players in the market. Now the dynamics of the industry are finance focused rather than creativity focused.

Managing a Multi Brand Conglomerate

Luxury brands must foster and appreciation and tolerance for creativity that is unconstrained by commercial or production constraints. If you think and act like a typical manager around creative people- with rules policies, data on customer preferences, and so forth- you will quickly kill their talent (Bernard Arnault) On the contrarary, bernard is also a profit centric leader. Poor performing brands are threatened to be sold off.

Managing Star Brands

Star brands created based on innovation, quality and capturing new markets. Star brands have a strong appeal. Innovation: Innovation is achieved by hiring creative people and giving them the freedom to perform and follow their instincts. Quality: Quality is essential in production as well as product development.

Managing Star Brands

Managing People: Have the best managers People with the determination to make a difference. Company hired bright novices and trained them thoroughly. De-compartimentalized people and their jobs.

Future
With so many brands, will LVMH be successful in making them all profitable? Will standards of creativity be maintained?

CBBE
Brand Salience: Luxury goods Brand Imagery: Luxury, indulgence, extravagance Brand Performance: High quality, practical, creative Consumer Feelings: satisfaction, pride, confidence Consumer Judgments: Reliable brands, authentication in fashion statement Brand Resonance: High degree of loyalty (money spent despite being in short supply),Strong appeal

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