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Louis Vuitton SWOT & PESTLE Analysis

ID : 52113453| Dec 2018

COMPANY PROFILE -Louis Vuitton

Business Sector :Luxury Fashion

Operating Geography :Europe, France, Global

About Louis Vuitton :

LVMH Moët Hennessy Louis Vuitton SE, is one of the world's leading international fashion houses, with products ranging from luxury trunks and leather goods to ready-to-wear, shoes, watches, jewelry, accessories, sunglasses and books. It sells its products through standalone boutiques, lease departments in high-end department stores, and through the e-commerce section of its website. The company was founded in Paris, France in 1854. It became famous for introducing the flat-topped trunks with trianon canvas, making them lightweight, airtight, stackable, very convenient for voyages.
A globally unrivalled group of powerfully evocative brands, this iconic fashion retailer, synonymous with the history of luxury, employs over 145,000 employees worldwide and command a global leadership in the manufacture and distribution of luxury goods. This world’s leading fashion house sells through multiple channels - standalone boutiques, lease departments in high-end department stores, and through the e-commerce section of its website. The Company is acclaimed as world's most valuable luxury brand – maintaining its No. 1 position for consecutive years since 2006 to 2018. The Louis Vuitton brand and the LV monogram feature amongst the globe’s most valuable brands.
Louis Vuitton Mission statement reads “To represent the most refined qualities of Western “Art de Vivre” (art of living) around the world; to be synonymous with both elegance and creativity; to blend tradition and innovation, and kindle dream and fantasy.” Louis Vuitton’s USP or unique selling proposition is being the world's most valuable luxury brand commanding a global leadership in the manufacture and distribution of luxury goods.

Louis Vuitton Revenue :


€ 42,636 million – FY ended December 31st, 2017 (y-o-y growth +13%)
€ 37,600 million – FY ended December 31st, 2016

Ownership / Major shareholders :


As of January 2018, the major shareholders of the company are as follows –
1) Arnault family group (46.8%)
2) French institutional investors (13%)
3) Foreign Institutional investors (34.4%)

Competitive Analysis of Louis Vuitton

SWOT
PESTLE
The SWOT analysis for Louis Vuitton is presented below:
Strengths
Weaknesses
1. Strong brand with global presence
2. Sound financial position
3. Superior craftsmanship
4. Exclusive products
1. Limited customer base
2. Confined retail market
Opportunities
Threats
1. Revamping brand image and retaining an insatiable lust for innovation
2. Capture emerging markets
3. Investing in digital capabilities
1. Counterfeit products eroding brand image
2. Slowing economic growth
3. Intense competition
4. Adverse foreign currency movements
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Detailed SWOT Analysis of Louis Vuitton

 

Strength

1. Strong brand with global presence: It is one of the most well-known fashion boutiques in the world with more than 160 years of history. The brand is easily recognizable because of its logo and monogram canvas on most of its products. The Louis Vuitton brand and the LV monogram feature amongst the globe’s most valuable brands. The Company is acclaimed as world's most valuable luxury brand – maintaining its No. 1 position for consecutive years since 2006 to 2018. LV has a strong brand image and has its identity in the world’s leading financial hubs such as China, Japan and Hong Kong, which have high concentrations of high net worth individuals. It also has an international high profile clientele base including a cultivated celebrity following comprising of famous musicians, actors and models like such as Jennifer Lopez, Keith Richards, Madonna, Sean Connery, Michelle Williams, Matthias Schoenaerts, Jennifer Connelly, Hayden Christensen, Angelina Jolie, Gisele Bündchen and most recently David Bowie, to name a few. Due to the popularity of the Brand's products and its strong performance, total number of stores of the LVMH Group worldwide almost doubled from 2314 in 2008 to 4374 in 2017. The Company operates in some 70 countries across the globe selling over 70 brands as of 2018.

2. Consistently sound financial performance: Fiscal 2017 has proved to be a record year for the Louis Vuitton Group with revenues crossing Euro 42.6 billion mark and witnessing a robust 12% organic growth. Profit from recurring operations, grew 18% and surpassed €8 billion mark. Group share of net profits spiked 29%. Free cash flow touched €4.8 billion (up 20%) with the net debt to equity ratio remaining at 24%. Christian Dior Couture also came under the umbrella of LVMH Group since July 2017, giving a great boost to the fashion house’s Fashion and Leather Goods business group. Fiscal 2017 dividend shot 25% whereas the average annual growth rate for the gross dividend per share over a 5 year period has been a remarkable 12%. The Group witnessed solid growth in US (+9%), Europe (+10%) and Asia (excl. Japan) (+17%) in FY2017 over the previous year.

3. Superior craftsmanship: They individually hand craft products which uses exquisite materials and also make custom tailored products for its few elite customers. Attention to finer details along with their “no discounts or promotions” and “immediate disposal of defective products” policies give them an edge over their contemporary competitors. The Group makes significant investments in production to ameliorate the quality of finished products and ascertain that they are the most perfect expression of the terroirs from which they originate. In order to meet the growing demand of their products in all our business groups and untiringly enhance production processes, Louis Vuitton Maisons have increased their production capacities. Post the launch of a manufacturing facility in Auvergne, central France, Louis Vuitton has scheduled to open several more production facilities in France in 2018. Bvlgari has built itself a state-of-the-art manufacturing facility in Valenza, Italy. The inaugural of the Pont Neuf bottling plant, near Cognac, in October 2017 bears testimony to both Hennessy’s expansion potential and its confidence in the potential of the cognac vineyards.

4. Exclusive product portfolio: Louis Vuitton produces exclusive products which showcase the latest fashion and style. The products are highly priced because of its superior quality and by the high degree of scarcity and exclusivity, which is evident in the procurement to production policies practiced. It offers a holistic scoop of luxury products in leather goods, ready-to-wear, shoes, watches, jewelry, fine jewelry, accessories and writing. The strategic priority of the Group is to work with the best designers in the industry that breathe the spirit of each brand. Karl Lagerfeld and Silvia Fendi have been the primary driving forces behind the success of the Rome-based Maison. More recently, the creative duo formed by Carol Lim and Humberto Leon played catalysts in Kenzo’s spectacular revamp. LVMH credits its global leadership in premium wines and spirits to a unique group of exceptional Maisons. The Group operates over 70 Maisons, which are all busy hubs of creativity and engagement. Hennessy, in particular, has reserves of eaux-de-vie in its cellars that boast of an age of over two centuries. The legendary fashion house’s long and proud history of imperial uncompromising craftsmanship, tradition in combination with modernity and proven innovation, excellence and creativity, lofty standards, comprises an arterial part of the brand identity of the company.

Weakness

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Opportunity

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Threat

This section is available only in the 'Complete Report' on purchase.

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Open Table Preview
Name
Business Segment
Year
Type
Objective/Synergy Achieved
Christian Dior CoutureFashion2017AcquisitionThe acquisition helps LVMH Group combine Dior’s entities under one roof and help brand expansion and benefit from economies of scale.
RimowaSuitcases 2017AcquisitionThe acquisition helps LVMH Group expand its travel portfolio and the brand will benefit from the development of air travel in coming years.
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in Louis Vuitton Analysis Report

1. Revenue 2018- https://r.lvmh-static.com/uploads/2018/07/q3-2018-revenue-va-10-10-2018.pdf

2. Company Website- https://eu.louisvuitton.com/eng-e1/homepage?campaign=sem_GG-IN-ENG-SH-BRAN-OTHE

3. Counterfeit Report- https://thecounterfeitreport.com/product/192/Louis-Vuitton-Handbags.html

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Louis Vuitton SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & PESTLE.com (2020). Louis Vuitton SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/louis-vuitton/ [Accessed 11 Jul, 2020].

In-text: (SWOT & PESTLE.com, 2020)

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Louis Vuitton SWOT and PESTLE analysis has been conducted and reviewed by senior analysts from Barakaat Consulting.

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Louis Vuitton SWOT & PESTLE Analysis
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