Introduction to Management Essay
Introduction to Management
This report will discuss about company background, country background, SWOT analysis, Pest analysis, Porter’s analysis and give recommendations. At this report the brand chosen is Louis Vuitton. Louis Vuitton Mattenier also known as Louis Vuitton and shorten to LV. The Louis Vuitton label was founded by Vuitton in 1854 on Rue Nueve Des Capucines in Paris, France. As well as the headquarters its self which located in Paris. Louis Vuitton is French house fashion design at that time which becoming one of the world’s valuable brand with 40% profitable (Constant, 2012).
2. Company Background
Louis Vuitton is one of the most valuable’s brand in its category which is Luxury in goods. Its products includes of leather goods, handbags, trunks, shoes, watches, jewelry and accessories. Most of people adorned with the LV monogram which designed by well known designer and easily noticeable with simple live style as the idea. Louis Vuitton with a brand Value of $28.4 Billions in USD with a sales of $9.4 Billions (Reuters, 2013).
3. Country Background
Louis Vuitton headquarters is located in Paris, they had open many outlets all around the world and Singapore have 3 big outlets and the latest which located in Marina Bay Sands that open unique “island” store that will “float” on the water. Singapore it’s a developed country which also attract tourist from other countries to come to visit as a traveler as well as shopper. The three outlets can be found in Takashimaya, ION and Marina Bay sands.
4. SWOT Analysis
Swot analysis are the shorten words of Strength, Weaknesses, Opportunities and Threats. SWOT analysis are mainly used for a company to build their outlets/factory in overseas to extend their products and profits.
Brand Value ( the brand is one of the oldest fashion houses with more than 150 years) Easily recognizable (the logo and monogram) The brand has it own outlets in most of the large shopping center. Well known Designer Custom Tailored available for elite customers
The Shops only available in exclusive stores making it difficult for developing countries The most expensive price compare to other competitors
Rarely to give discounts to customers
The company needs to make new current fashion trends
Large market for luxury goods
Synergy between brands/merger
Increased market for counterfeit products
Resources are decreasing
5. PEST analysis
5.1 Political and legal
The anti-counterfeiting trade agreement (ACTA) aims to establish and international legal framework for targeting counterfeit goods. Where as in Singapore has become one of the biggest shopping country in Asia, furthermore Singapore is a Bureaucratic country and extremely centralized, with 17% corporate tax, less tax regimes; investors are not subject to capital gains tax, dividend tax, and foreign exchange controls (Mehamer, 2013). On august 9 1965 Singapore became and independent nation and consistently increased their economy, by maintaining their productivity with a stable government and has severe laws in place and due to strict governance and associated fines less corruption, efficient and transparent government. Singapore has ranked the 1st in the global enabling trade index and 18 FTA with trading partners in their trade policy.
Singapore itself have a strong economy statistics. It was recorded and the data shown as interest rate:0.2%, Growth rate; 6.90%, Jobless Rate 2.10% and GDP per Capita $37,293 (Mehamer, 2013). This massive record shows that Singapore have strong basis economy in their government. Louis Vuitton with a sales of 7.2 billions in 2012 were involved in Singapore Trade to GDP ratio of 270.8%, and high dependency on global market trends and fluctuations in macro economy.
Singapore citizen with excellent education and healthcare (Sirikan C, 2013). Literacy rate of 92.5% and a multitasking language where they lived as a multinational country that supports every citizens to speak 2 languages, as their mother tongue is Mandarin or English. A significant percentage of non-residents who lived in Singapore with a Gini coefficient index of 48.1 shows that Singaporean can easily adapt with foreign where the employee of the company can interact with customers behavior and promote their products relay on their cultures behavior and difference.
In the last tens of years ago, technology in Singapore has a massive evolved of their needs. The growth of technology helps Louis Vuitton to communicate with their headquarters, due the change of currency, products release, transactions and supports more efficient. Furthermore it give a huge impact for both companies and countries to safe their times to manage their needs. Whereas Singapore had become a developed country the change of technology to renew their materials use its not problem for them to follow the world trade business.
6. Porter’s Analysis
Porter’s Five Forces
6.1 Threat of New Entrants
Competitor : GUCCI, Yves Saint-Lauren, Channel, Bally.
Jewelry; Montblanc, Bulgari, Cartier, Officine Panerai.
Even though LVMH have a strong many competitors Luxury goods, LVMH offer a strong and unique in their products such as; high quality products, well service for every customers and brand value. Furthermore, LVMH has no worries with their competitors they have a loyal customers who always bought the products and advertise to their friends, longstanding commitment to quality and Investment required would be extremely large for those who do businesses. Besides that for a new goods brands wont give an impact to LVMH (Dang, 2013). 6.2 Bargaining Power’s of Suppliers
For a big company LVMH have a Suppliers and subcontractors are required to comply with strict environmental guidelines. Where LVMH needs lots of materials they will have many offers which the company produce the materials with the lowest deals and highest quality needs (Dang, 2013).
6.3 Bargaining Powers of Customers
With branded name and value customers had become the most loyal of companies buyers, from the experience that they ever had, has build the trust and set their mind become a loyal buyer. Fashion is a trend with a strong name LVMH has put their products into the top levels and Louis Vuitton products are never on sale.
6.4 Threats of Substitute Products
High profile luxury goods LVMH brands have high quality products
differentiations and believe. 6.5 Rivalry Among Competitors
In every company will always have their own competitors in this case LVMH are working in Luxury industries in a big scale to have an competitors will always be a positive things to brought new ideas and trends, in fact competitors do not sell exactly same products and different brand value (Dang, 2013).
To make LV more appealing to the consumers, some products of the brand can be made available only in small quantities, by limiting its production of certain products from time to time, or producing special edition of the same handbag in different markets. LV product could become even more premium, Create products for collection of limited editions, expend the trend by increasing the popularity by adverstiment. Open their outlets store only in high end malls all around the world. To become more premium in their products LVMH may consider to concentrating its business model to production of leather goods only becoming specialist in their interest.
Louis Vuitton is one of the leading fashion trends industries in the world which has significant every year. Louis Vuitton will always have their loyal customers where they bought their new products, with a strong brand value LVMH has no worries with their competitors. On the other hand due the change of time they have to consider with their resources that year by years will decreased their materials. Louis Vuitton shall put more concern on their weakness in both internal and external put them in the higher level of luxury goods market. They may consider to merge with other company in different products offer to increase and fasten their sales. Working in Luxury markets sales is stable jobs and it wasn’t easy but they have to stable their sales and increase the value to become a premium brand
Constant, J. (2012, 11 02). lvmh. Retrieved 01 14, 2014, from Louis Vuitton:
Reuters, T. (2013, 11 02). World’s Most Valueable Brands. Retrieved 01 14, 2014, from Forbes: http://www.forbes.com/companies/louis-vuitton/
Mehamer, C. (2013, 09 13). http://prezi.com/bin1bd1_2zt1/pest-analysis. Retrieved 01 29, 2014, from http://prezi.com/bin1bd1_2zt1/pest-analysis
Sirikan C, r. (2013, 07 28). A Cultural & Economic Analysis of Singapore for making Market Entry Decisions. Retrieved 01 29, 2014, from Slide Share: http://www.slideshare.net/SrikiranCRai1/a-cultural-economic-analysis-of-singapore-for-making-market-entry-decisions
Dang, A. W. (2013, 01 23). Louis Vuttion Moet Hennessy Presentation. Retrieved 01 29, 2014, from SlideShare: http://www.slideshare.net/mraldang/louis-vuttion-moet-henness