luxury goods industry situational analysis presented by: victoria dinkins trion king

Luxury Goods IndustrySituational Analysis

Presented by:

Victoria Dinkins

Trion King

Luxury Goods Industry

Definition of Luxury Goods IndustryExcellence, Superior ServiceElite PopulationFragmented Industry22% of worldwide industry salesMajor Competitors:

Louis Vuitton Moet HennessyGucciRichemontBulgariHermes

Obsession with excellence in everyluxury-goods company

E-Commerce/Net-Enhanced Organization

Internet/World Wide WebMakes it easy to market products overseas

Speeds up globalization

Aims to transform customers into “connoisseurs”

Allows for accessible informationestablishes ties between consumers and a brand, and enhances persuasion

Internet = Communication = More Informed Buyer

Threats & Opportunitiese-Commerce/NEO

Needs considerable local adaptationretailing is still very localized

Informality, community spirit, openness – similar to flea market

position between mass advertising and personalization is a real challenge

Lacks necessary quality of attention to detailImpersonal communicationAllows companies to build long run relationships with customers

converging possibility between internet user profiles and the luxury consumer

Economic Globalization & Outsourcing

Unconventional approaches to managing a multinational businessManage business in various countries as a single systemInternational acquisitions

LVHM – U.S. fragrances and cosmetics

Less dependent on outsourcing or licensing

move production capacity to China

Emerging markets equal to 7% to 9%Asian markets constitute 7% of global salesSales in Japan equals 38% of the industry

Threats & OpportunitiesEconomic Globalization/Outsourcing

Outsourcing labor has perception of cheaper products

Rising costs deteriorated marginsvalue-added taxes driving Chinese prices up 30%

high acquisition costs

Maintaining image and reputation

Threat of substitutes

QUESTIONS

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