Pest Analysis Of Louis Vuitton

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Louis Vuitton Moët Hennessy Key Issues
The company we know today as Moët Hennessy Louis Vuitton (LVMH) group was founded in 1987 with a merger between Louis Vuitton and Moët Hennessy. For the past two years, the organization has sustained rapid growth and profitability. Bernard Arnault, the CEO of Moet Hennessy Louis Vuitton, has to deal with the extensive high pressures of growing a business today. Arnault must keep growth and maintain a competitive edge while preserving the value, the heritage and the stones of the company.
External Analysis
An external analysis will be used to evaluate the company’s opportunities and threats based on its external environment.
PEST Analysis
Political
Moët Hennessy Louis Vuitton is a high quality luxury goods company focusing mostly on absolute and aspirational customers. LVMH constantly battles with domestic and international governments around the world to crack down on counterfeit items.

Economic
The recession in 2007 had a worldwide effect on business. However, according to exhibit 4, the luxury goods market maintained strong growth during the recession. Moët Hennessy Louis Vuitton had problems with tourists mostly from China LVMH buying products from Europe and selling back in China to avoid the duty fees.

Socio-Economic
Moët Hennessy Louis Vuitton focuses on the higher end of the market. The market is made up of three segments: absolute, aspirational and accessible customers. LVMH focuses on the top two segments; absolute customers are individuals of ultra-high net worth who value brands that are based on heritage and tradition and aspirational customers who are celebrities with high net income. Both categories of customers value high quality and exclusive buying experience. ...

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...me at some point.

Alternatives
1. Move to perfume market – to increase profitability and growth. The perfume market revenue in 2011 was 19 billion euro and was expected to grow 5 percent. Also the absolute and aspirational customers made up 25 percent of the market. LVMH has leading brand in the perfume industry; Christian Dior, Guerlain and Givenchy, those are all top perfume brands.

2. Minimize the use of technology use more artisan products

3. Carter to all three markets segments, use Fusion Alternative - produce “accessible goods’ use the automation since this groups cares solely about the brand image. Produce absolute goods using artisan labour this group care are heritage and tradition. They look for excellent craftsmanship, the use of high-end materials and excellent buying experience.

4. Continue with regular practices with friendly acquisitions

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