Louis Vuitton in Japan

1. What has made Louis Vuitton’s business model successful in the Japanese luxury market?
According to Hill, Wee and Udayasankar, the success of the company’s strategy can be measured by the value created for shareholders. To maximize the value, managers can increase the profitability by picking a position in the efficiency frontier with supportive internal operations and appropriate organization structure. In fact, Louis Vuitton had outstanding performance on that.

In the primary activities, several measures are taken to control cost and create value. LV reduces cost by learning modern manufacturing method from auto makers and other industries. Although the Louis Vuitton’s production is still a labor-intensive process, increasing efficiency and productivity were achieved by reaching perfect balance between machines and labors. To adding the value of products, LV pays much attention on the improvement of quality. Since “made in France” is a guarantee of high quality, Louis Vuitton never builds factories out of France or outsources the production to a location with cheap labors. Although the labor price in France is extraordinarily high, the benefits such as customer loyalty and commercial reputation obtained by the company obviously outweigh the pay. Apart from that, test laboratories are established for quality checking. In the laboratories, bags are lifted and dropped again and again and jewelries are shaken strongly to make sure every customer get merchandizes of high quality. Since quality is a significant factor to measure a product in Japan, these strict quality control process satisfies Japanese customers. Customer service is another important factor in primary activities. According to the LV regulations, once a product i...

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...specific, the prices of leather goods, accessories, watches, jewelry, shoes and ready-to-wear of Louis Vuitton dropped by seven percent in 2008. Besides, Fujii takes some actions to face the challenges. For example, he sets an Internet business to follow the world trend and to enlarge the distribution channel. Also, he increases the product line to cover the children clothes and enlarges the market by opening stores in mid-size and small cities. Since Japan is still a developed country with wealthy families, the Japanese luxury market would still be a healthy and attractive market for Louis Vuitton and these challenges could be overcome in large extent.

Works Cited

Paul, J. and Feroul, C. 2010. Louis Vuitton in Japan. [Accessed: 12 Dec 2013].

Hill, C., Wee, C. and Udayasankar, K. 2012.International Business:An Asian Perspective. 8th ed. Singapore: McGraw-Hill.