Download - Luxury Goods Industry Situational Analysis
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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