1 / 15

Louis Vuitton

Louis Vuitton. Market Entry Strategy RTW in South Korea Group B-1, RSM MBA FT2005 Mark Amritanand, Edo Avraham, Are Hofstad, Weiming Li, Kelly Pender, Stefan Salzer Strategy Management Rotterdam, 16.04.2004. Agenda. Objective Global Luxury Goods Market

Download Presentation

Louis Vuitton

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Louis Vuitton Market Entry Strategy RTW in South Korea Group B-1, RSM MBA FT2005 Mark Amritanand, Edo Avraham, Are Hofstad, Weiming Li, Kelly Pender, Stefan Salzer Strategy ManagementRotterdam, 16.04.2004

  2. Agenda • Objective • Global Luxury Goods Market • Louis Vuitton Moët Hennessy (LVMH) • The South Korean Opportunity • Market Segmentation • Competition • South Korean Luxury Goods Market • Louis Vuitton Analysis • Conclusion • Recommendations Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  3. Objective Whether or not Louis Vuitton should launch its women’s ready-to-wear (RTW) clothing line in South Korea. Currently, Louis Vuitton has eighteen retail locations in South Korea, carrying only its luggage, handbags, accessories, and shoes. Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  4. Global Luxury Goods Market • Total market $66bn in 2000; expected $75 bn in 2004 • Gross margins for clothing approx. 70% • Dominated by large luxury goods conglomerates Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  5. Luxury Goods Industry Trends • Horizontal consolidation • Reliance on one star brand • Professional management • Move away from licensing • Investing in multi-million $ stores • Recruiting international designers • Democratization of fashion Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  6. Louis Vuitton Moët Hennessy • Fashion & Leather Goods (14) • Louis Vuitton • Fendi • Kenzo • Wines & Spirits (13) • Moët & Chandon • Dom Pérignon • Hennessy • Perfumes & Cosmetics (10) • Guerlain • Parfums Christian Dior • Watches & Jewelry (5) • Tag Heuer • Chaumet • Selective Retailing (6) • DFS Duty-Free Stores • Le Bon Marché • eLUXURY.com • Other (2) • Media & publishing 33% of Revenue 66% of Profit! Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  7. GDP: $425bn GDP Growth: 2002: 6% 2003: 3% Population: approx. 50m GNI per Capita: $9,800 Retail Sector: 2001: $99bn Consumer Goods Imports 2002: $15.3bn The South Korean Opportunity Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  8. South Korean Developments • Decreased tariff & import restrictions • Reduced on luxury goods tax (11/01) • Influx of upscale shops & restaurants • Luxury goods lead consumer goods imports • 5-day work week = more leisure time • Core inflation stable • Decreased regulation • Foreigner can now own land (1998) Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  9. Target Market Segment • Women 25+ • Early-adopter • Urban • Medium/High disposable income • “LV sect” • Grow along product lines • In South Korea:Bohemian Bourgeois (BoBos) • High-spending, brand conscious Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  10. Competition Stores in SK Pricing Main Strength Main Weakness 24 + Cross-Selling Allegra Beck Versace 18 === 14 = / - Product Variety Giorgio Armani 12 + Privately Owned Couture Collection 11 + Jean Paul Gaultier Older Target Market 8 + PPR Ownership Tom Ford’s departure 8 + Holds 42% of LVMH Couture Collection FENDI 5 + LVMH Brand Higher Prices Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  11. South Korean Luxury Goods Market Players not yet in SKMarket share of existing players No discounts or sales Waiting lists Emotional switching barriers Rare brand-loyalty Small Manufacturers Reciprocal Benefits Real Estate Owners Noteworthy, but not fierce Rivalry for design talent No price competition Haute Couture Designer flight Cars, Watches… Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  12. Louis Vuitton SWOT Analysis • Strong financials • 150 years of excellence • Existing presence in SK • Marc Jacobs (designer) • Cross-sell from accessories • Clothing not as well- known as handbags • Risk of brand dilution INTERNAL S W O T • Most competitors don’t sell in their own stores • Strong SK economy • LV brand already popular • Young BoBos target market • Currency fluctuations • Political instability • Democratization of fashion • Counterfeiting & grey market • Marc Jacobs could leave EXTERNAL Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  13. Conclusion • Launch RTW Line in South Korea • Expand into new market to fight mature markets in Eur. & N. Am. • Complete distribution control in own stores • Leverage existing store investments • Grab mindshare before competitors Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  14. Recommendations Pilot Program • Launch in Seoul flagship store • Market to BoBos • Cross-sell to existing customers • Use competitive intelligence from DFS stores • Evaluate results & roll-out nationwide • Maintain brand exclusivity • Knowledge transfer within LVMH to introduce conglomerate’s other brands Group B1 – Final Strategy Project MBA FT2005, Semester II, 16.04.2004

  15. ? Any Questions

More Related