Juan Camilo Gallego, Paulina Vicente, Uriel Jimenez,

Kenza Rabah, and Hithyshi Gopalkrishna

1.Describe hermes growth

strategy

Differentiation Strategy

Internal Strategy

Supply-driven strategy
The e-commerce distribution strategy
Internationalization strategy
Mono strategy
VRIO analysis:
Valuable: High, because the prices of this company are high due to the value of the product.
Rare: High, High, because this brand use a different materials like animal skins.
Costly to imitate: High, because the materials that they use are expensive and they have a high brand
position.
Non substitutable: No, because they have a different substitutes like: Other luxury goods, fakes and
imitations, status symbols and counterfeit.

2. What position is Herms

holding on the luxury
market?

Herms is following a focused-differentiation strategy, because the range of products that the
company is offering are very high priced and made with expensive materials.
The company has focused on offering a product with a unique design for those people who are
attracted by uniqueness.
The company only owns the brand Herms and its Chinese version Shang Xia. The focus strategy
allows the Herms group to offer the best quality their customers expect.
Herms has a strong brand position that enables the firm to gain a competitive advantage, and
customer loyalty to dominate over its rivals .

3.Describe hermes
financial performance
On 2008, the groups market capitalization was at 10.5 billion
Herms shares price on the market went up.
On 2012, Herms revenues were 3 484.1 M and kept on increasing until they reached 4 841.0 M on
2015.
Compared to LVMH revenues, Hermss are much less, but LVMH is a multinational luxury
conglomerate that owns more than 60 brands in France and other countries.

4.how is the family owners

trying to keep control over
the company?
Less than 50%
CEO

Shareholders

Family

Robert Dumas
Commitment strategy
Partnership limited by shares: of limited liabilities that prevent bigger companies like LVMH to own the
majority of the company
Maintaining the CEO or the most important jobs to people that are inside the family

5. What are the threats to

Herms?
LVMH: Acquired +20% of Herms capital. Herms used regulations to stop LVMH from taking over.
Big known luxury brands: usual competition Prada, Dior, Richemont, Louis Vuitton, Kering.
Suppliers: leather providers had to sign contracts to not enter in the market or were bought by Herms
to prevent them from entering.
Counterfeiting manufacturers: legal procedures were taken such as the Intellectual Property Code
and the Comit Colbert.