INTERNATIONAL MARKETING STRATEGY OF MOËT HENNESSY - LOUIS VUITTON

Executive Summary In the dawn of various phenomenons such as globalization, industrialization and technological advancement, the international marketplace including the particular areas and systems is overly affected. Among the observable impacts of such emerging conditions in the business world is competition. Competition among the various industries in every given economy is rapid and stiff. It is as if ‘survival of the fittest, extinction of the weakest’ trend. Today, as various industries are aiming for competitive advantage and sustainable development among its management and operations, there are numerous actions that are being implemented and are directed to the eventual success and growth of the company’s assets. In competition, there is motivation in every business to improve and develop their objectives. For an enterprise to succeed in global competition, hence, there is a continuous plan to develop marketing techniques such as innovation of new products with higher quality than its competitors. This paper discusses the international marketing strategy of the world’s largest luxury goods multinational company – Moët Hennessy - Louis Vuitton or simply LVMH. Specifically, this report presents the background of the organisation, its driving forces for globalisation as a primary motivational factor in its international marketing (macro, external/internal) operations, and impacts,

Their products and the cultural values they embody combine both tradition and innovation and stimulate dream and fantasy. LVM remarkably established its more than 1. LVMH holds an exclusive assortment of over 60 globally celebrated brands.Louis Vuitton is considered as the world’s largest luxury goods conglomerate and home of most expensive brands. In realization of this mission. five priorities reflect the fundamental values shared by all Group stakeholders namely: Be creative and innovate Aim for product excellence Bolster the image of our brands with passionate determination Act as entrepreneurs . LVMH aims to symbolize the most sophisticated qualities of Western "Art de Vivre" around the world. According to the information available in their corporate website. fashion and leather goods. perfumes and cosmetics. Since its creation in 1987.Background of Louis Vuitton (LVMH) The LVMH or Moët Hennessy . the group was formed through mergers of champagne producer Moët et Chandon and Hennessy and Louis Vuitton in 1987. Today. watches and jewelry. and selective retailing. The group also continues to be tantamount with both elegance and creativity. LVMH incessantly excel in the chosen field of industry by using its brand development strategy and uninterrupted expansion of its international retail network. The Group offers exquisite brands ranging from wines and spirits.800 stores worldwide through its strong growth dynamics.

69% of whom are based outside France. the Group is also involved in culture and heritage. education and supporting young artists and designers as part of it truthful vocation as a patron. FINANCIAL HIGHLIGHTS Fiscal Year End: Revenue (2005): Revenue Growth (1 yr): Employees (2005): Employee Growth (1 yr): December 16473.088 2.10% Currently.LVMH carries out a number of initiatives through its commitment to protecting the environment” (LVHM 2007).- Strive to be the best in all we do ( 2007).000 employees. the Group is prominently breaking the grounds of international marketing. the Group was led by as Chairman and CEO. the LVMHESSEC Chair and the LVMH Asia Scholarships .84 billion US in 2005. LVHM reached a total of $16. “Besides its community action for human development .60 M (-4. Additionally.30%) 61. . For the record. Accordingly. With the help of its more than 61.for example LVMH House. humanitarian action.

economic and political. cultural. External / Internal) Globalisation is currently the catchphrase for the perils and promises facing humanity in the 21st century (1999. and technology. Among these relations are those created by the progressive emergence of a global economy. And (2003) stated that globalisation has invaded our consciousness in many forms. Globalisation of both the economy and the society has confronted the world over the past decade (2000. forms of communication. A shift of focus and interest from the local market to the international setting has demanded innovation not just in corporate leadership as new information. it suggests that political. 2000. 2003). and cultural events in one part of the world quickly come to have significance for people in other parts of the world (2004) and is often branded as the triumph of capitalism (2000). These are being offered to be utilised in encouraging and reinforcing interaction among individuals and the operating enterprise through international trade ( 1990). 2000. it suggests that there has been an intensification of levels of interaction and interconnectedness among the states and societies ( 1991). According to (1991) contemporary processes of globalisation have several dimensions: technological. political. it is an inclusive term for the emergence of a global society in which economic. 1990).Driving Forces for Globalisation (Macro. The process of globalisation is commonly recognised to be characteristic of contemporary international developments. environmental. 2000. economic and social activity is becoming worldwide in scope. Secondly. the expansion of transnational links which generate . religious. Basically. First.

Globalisation has become identified with a number of trends. Globalisation represents the shift of the main venue of capital accumulation from the national to the supranational or global level ( 2000). money.new forms of collective decision-making and the development of intergovernmental and quasi-supranational institutions. the two companies seemed to be cut out of the same mold from the very beginning . has acquired considerable emotive force. Globalisation. this phenomenon has both positive and negative effects.both Moët-Hennessy and Louis Vuitton were in the business of producing luxury goods. 2002). However. In globalisation. and infrastructures to allow this movement which includes ( 2004. and the development of technology. a key to the future world economic development and also inevitable and irreversible. both were based in France. and ethical values (2004). For some. believing that it increases inequality within and between nations or organisations. and each had product lines that required and had instant . Goods and services produced in one part of the world are increasingly available in all parts of the world. threatens employment and living standards and thwarts social progress. i. and uncontrolled migration. International travel is more frequent. terrorism. information. organisations. technology. investments. they thrived on cultivating a certain "image". resources. illicit drugs. On the other hand. crime. These include greater international movement of commodities. Included in the negative aspects are the rapid spread of diseases. legal systems. International communication is commonplace ( 2004).e. and people. Others regard it with hospitality even fear. globalisation is a process that is beneficial. globalisation’s benefits are a sharing of basic knowledge. In the case of KVHM. information and money flow more quickly than ever. most of which have developed since World War II. among others (1990).

Since globalization represents the shift of the main venue of capital accumulation from the national to the supranational or global level (2000) and due to the adverse effects of such phenomenon. 1995. Generally. 1985). product lines ( 1990). The technological upheaval and intense international competition tender significant challenges to an organisation’s capability to keep up their competitiveness (1998.name recognition. competitiveness is defined as sustainable development in productivity motivated by . there are many driving forces for globalisation namely: competition and competitive advantage. 1993. Competition among the various industries in every given economy is rapid and stiff. In LVM. the competition among various industries increases. they recognized the benefits as well as drawbacks of the phenomenon and used it on their own advantage. It is as if ‘survival of the fittest. For LVHM. LVHM’s driving force for globalisation is competition. 1991. 1989. extinction of the weakest’ trend. R 魹 Cointreau. international businesses plan to venture into new horizons catering to the needs of the new markets and countries. they had similar. their major competitors are PPR (formerly Pinault-Printemps-Redoute). As the world becomes smaller in terms of business coverage and operations and as companies capitalize on intercontinental borders. In a micro economic sense. To combat competition. 1990. and Compagnie Financi 貥 Richemont. Competitive advantage is also among the driving factor for globalisation in LVHM. (1995) states that the global market is considered to be in hyper competition mode and its rate is increasing as technology and industry concentration also intensified. 1989. and in some cases competing. Every management wanted to break even and gain competitive edge among its competitors.

This is evidently projected in the case of LVHM wherein the challenges of global competition and technological advancement triggered or contributed to its eventual economic progression. its current business plan aims to strongly be in command of the brands it manages with the purpose to maintain and increase the perception of luxury relating to their products. Louis Vuitton products are sold exclusively in selected Louis Vuitton boutiques found in chic locations in wealthy cities worldwide. As of 2003. . the Group accumulated approximately 12 billion euros with a net income of 2 billion euros as earnings. the quality of business and environment and the prevalent macro economic environment ( 2001). while simultaneously maintaining and expending the real incomes of its people over a long term (2002). Also. Aside from expanding and maintaining its luxurious collection of brands. This practice goes greatly in contrast with the less exclusive brands distributed and bought in shopping malls worldwide. Today. In a macro economic point of view. Impact of Globalisation on the International Marketing Strategy of LVMH • Situation analysis LVHM operating in the globalised setting allows its products to reach every continent or part of the world. produce goods and services which meet the test of international market. the products are in concession in other luxury goods shops like Harrods in London.the quality of business strategy and operations. the Group incessantly expands its operations globally. To implement such aim. competitiveness is the degree to which a country can under free and fair market conditions.

As case. • Competitive advantage and market position The rise of the global economy has been an important element in the international business agenda since the 1980s (2002). Being the most counterfeited brand. It is their products that define their market position. As stated. Louis Vuitton fakes accounted for 18% of counterfeit accessories apprehended in the European Union in 2004. firm and sub- . particularly strategic alliances and international joint ventures of LVMH served as its competitive advantage. This alone can identify their monopoly in their area of industry. Today. LVMV is considered the largest luxury goods conglomerate. Not to mention. Plans to achieve competitiveness were formulated at national. spontaneous. its outstanding brand development strategy distinguishes them from other luxury brands. the efforts of its management to prevent such criminal acts increases its worldwide marketing status.The Louis Viutton brand is also implementing its worldwide battle against counterfeiting. the Group holds a relatively prestigious and profitable standing. outwardly focused approaches to international strategic planning needed to be superseded by more formal models of global strategy and the multitude ways of doing international business. Competitiveness often was taken to mean simply out-competing rivals in the global market (2002). LVMH offers a wide assortment of luxury brands. • Strategic fit and strategy at different levels The notion of competitiveness became prominent to LVMH. With the excellent brand development strategy and the effective application of globalisation trends. industry. The infrequent.

and the associated risks bestowed on the Group. this move could pave the way to increase even more its market shares and revenues. the firm must not lose sight of its core competencies while pursuing these tie-ups. 1993). A tie-up or merger with various related companies offers tremendous benefits in terms of access to LVMH consumers. the collaboration with its major competitors can be seen as a ridiculous move at first. A national level formulation of this interpretation (how to do better than your rivals) was famously formulated by (1990) and his "diamond" framework and it attracted criticism and modification from international business scholars (1997. However. The strategic option can even be used as marketing tool where the focus is on staying close to the customers and listening to their feedbacks. upon close examination. Meanwhile. The bottom line is both sides would be able significantly gain . knowing what the market demands and the latest trends could help LVMH to fully exploit its research and development capabilities and come out with new practical and applicable strategies or plans which are costeffective but high in quality and performance.unit of the firm (1988). infrastructures and even its resources. On the flip side of the coin. However. there are various strategic options available for LVMH. understanding the strategic importance of its subsidiaries is something LVHM has to be familiar with. At the network level strategy. there will be huge mobilization of resources involved. Otherwise. At the business level strategy. At the corporate level strategy. The LVMH management applied such strategic planning scheme. its image might be put in jeopardy. This allows information dissemination to be retained at the corporate headquarters of the whole company ( 2002).

Another possible setback could be whether any of competitors has the need to form alliances. Thus. By paying attention to customer wants and needs. it also facilitate the achievement of an organization’s objectives.financially in such an alliance. In terms of planning and control of LVMH. By doing so. organizations are more likely to achieve their objectives in the marketplace (2002). One possible setback. and whether these options can be acceptable to the key stakeholders. The benefits of these alliances should outweigh the costs in the long run. all options are able to directly address the current issues brought about by globalisation. • Planning and control Marketing is about satisfying the wants and needs of customers. strategies and resources of businesses and their products or services is very essential as it allows the management to determine how they will progress in the years to come. It is important to note that any merger transactions would have many implications on the firm’s values and culture as well as the resources. it will be able to overcome this . however. is the differences in the cultures of the companies involved. Somehow. Any further merger or alliances may also involve the sharing of expertise. LVMH has traditionally relied on the inside-out approach. the question remains whether LVMH could be able to implement any of these options. Analyzing the status. the management is solely in control with what will be taken as next strategic option. The key stakeholders definitely would be concerned with such options and need to be convinced of the positive aspects. The third option also focuses on alliances. but this time with either one of the suppliers specializing in manufacturing of software technologies. However.

reduce risks in the organization’s business. and the ability of the management to preserve the most appropriate marketing strategy that will ensure that these systems are successful and are able to perform its planned tasks or functions. The discussion above also revealed that through effective and efficient strategic planning and management. Conclusion Based on the discussions above. reduce the costs of business development and service delivery and encourage improvement in internal business processes and external service implementation. it is found out that the marketing strategy of LVMH is influenced by globalisation trends. the opportunities. Having an experienced strategist in helping the management utilizes its resources. and the effectiveness in the locale or the setting. employing the trends of globalisation in business operations require a lot of strategic planning and careful studying of processes. the organization’s resources and systems. economic progression and corporate growth and success is promising. In the case of LVMH. use. organization administrators can add value to the services delivered to customers. The shaped information regarding marketing strategy and strategic planning will have value and increases insight into LVMH’s organizational needs and the way the business is looked at. Adding more and more advantages to the whole organization and solving the problems as they occur will eventually lead to success and growth as mentioned. Intensiveness is needed to consider the risks. .barrier in managing strategic changes in the process of implementing any of the above mentioned strategic options.

com/term_paper_topics/2009/10/international-marketingstrategy-of-mo%C3%ABt-hennessy---louis-vuitton. eventual growth. and success are not really far at hand. Regardless of the unprecedented drawbacks of such when being used. every company and its management like LVMH. competitive edge. Read more: http://ivythesis.The emergence of technological advancements and globalization in all operating industries in the world paved way to the further improvements of all the aspects related to marketing and management techniques. market dominance. With the right marketing and management strategy as well as strategic planning.html#ixzz1Xqe9zwBo .typepad. Every decision made by the management must be directed to the welfare of the whole industry. must manage and control the best possible and beneficial ways possible.

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