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Unit 4 Louis Vuitton in Japan Case Study Analysis

Kaplan University

School of Business

MT460 Management Policy and Strategy

Author: <insert your name>

Professor: Dr. Jonathan Green

Date: September 5, 2016

 

Case Study Analysis – Louis Vuitton in Japan

 

Company Name: Louis Vuitton Malletier

Topic of the Week: strategic management

Synopsis of the Situation

Louis Vuitton, one of the world’s biggest luxury-goods firms was incorporated in 1854 by its founding father Louis Vuitton and it soon become a household’s name after it hit the French luxury fashion houses by storm. Despite the firm being French based, it took over the Japanese markets with its craftwork leather bags and trunks which were inspired by the Japanese and oriental designs of the Victorian age making it popular among many (Socha, 2008). Despite the occurrence of the First World War between 1914 -1918 the company was not severely affected considering that it had already adopted global expansion by opening stores in new York, Bombay, Alexandria, Washington, and London. By applying the craftwork and design of its leather to smaller goods, the company was able to expand its product line making it a global company.

Through the recruitment of high talented designers such as Marc Jacobs and the merger between the company Moet et Chandon and Hennessey, the company was able to increase its profit and market share. Apart from designing leather bags, the company ventured in other products such as shoes, watches, perfumes and cosmetics and wine and spirits. By 2004 the company had opened major stores in Sao Paulo, Johannesburg and China and most of its products were being sold in over 130 countries in the world. By 2004 the company was making $ 3.8 billion sales making it one of the world largest company and easily beating off competition from other companies such as Prada and Gucci.

The company expansion can be attributed to such qualities as efficient management practices, quality products, production and quality control and aggressive advertisement. Louis Vuitton is popular and famous for its strictly controlled distribution network that is as a result of the efficient structuring of the company (Glenn Smith, 2009). Moreover, constant improvement of their products have ensures that they have remained at the top for over a century now.

 

Alternative Solutions

  1. Tapping new markets not only in Japan and Europe but rather in other parts of the world such as Africa.
  2. Production of high-quality commodities at a lower price to aid in fighting counterfeiting.
  3. Recruitment of new exciting talents those are conversant with the new trends in the fashion industry.

Selected Solution to the Problem

The shift in the market from the luxury brand to fashion brand is one of the biggest challenges of the Louis Vuitton Company. The easiest and cheapest way out of this challenge is the employment and recruitment of new young talents who are aware of the new patterns and trends in the fashion field. The fashion industry is ever changing and to cope with the changes the company needs an individual who is alert to notice the slightest changes in the industry.

The largest consumer market in the world today is made of youths who are from the mixed economic background. Thus, those from the poor economic background will apparently favor cheap but high-quality products. Thus, the company needs to shift its focus from producing luxury products to producing fashionable but cheap products. The only way to achieve this is to have youths in their designing team.

Implementation

To implement the plan, the company needs to hold designing competitions from various parts of the world regardless of the country or the economic status of the country. They have to choose the best designers from the competition and train them by including and integrating them with their designing teams to give them a new dimension and perspective (Toda, 2008).  With time, the youths and the new recruits will become well acquainted with the job and will definitely put the company in a better competitive position.

Recommendations and Conclusion

Louis Vuitton may be one of the largest companies in the world, but changes in the consumer market may put the company’s position in the market in jeopardy. To be able to remain at the top, the company needs to adapt to the changes in the market to gain a competitive edge over their competitors.

  1. The company needs to not only focus on the Japanese market but rather shift their focus to other parts of the world.
  2. The company needs to recruit new talented designers and not solely depend on Marc Jacobs.
  3. The company needs to produce high-quality products at a lower price to help fight counterfeiting.

 

References

Glenn Smith. (2009). “Luxury sector loses its recession-proof status,”. Media, , 19.

Socha, M. (2008). “Vuitton, Dior to Lower Prices in Japan,”. Women’s Wear Daily, .

Toda, K. (2008). “Mobile-phone auction sites flooded with fake brand products,”. Nikkei            Business,.

 

Appendix

Figure 1. SWOT Analysis based upon the topic of the week for the company case.

Strengths

  1. Large customer base
  2. High-quality products
  3. Efficient management practices

Weaknesses

  1. Overdependence on Japanese market
  2. Overdependence on Marc Jacobs
  3. Rigid organization structure

Opportunities

  1. The new Asian market
  2. The ever growing fashion industry
  3. New product line in terms of watches

Threats

  1. Counterfeiting
  2. Stiff competition
  3. Unpredictable consumer Japanese economy

 

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