Slide 1

Zeeshan Halim

2014/10/16

IntroductionIssuesAlternativesAnalysisImplementationRecommendation INTRODUCTION

IntroductionIssuesAlternativesAnalysisImplementationRecommendation INTRODUCTION

IntroductionIssuesAlternativesAnalysisImplementationRecommendation INTRODUCTION

IntroductionIssuesAlternativesAnalysisImplementationRecommendation INTRODUCTION

IntroductionIssuesAlternativesAnalysisImplementationRecommendation INTRODUCTION

IntroductionIssuesAlternativesAnalysisImplementationRecommendation INTRODUCTION

IntroductionIssuesAlternativesAnalysisImplementationRecommendation INTRODUCTION

IntroductionIssuesAlternativesAnalysisImplementationRecommendation INTRODUCTION

IntroductionIssuesAlternativesAnalysisImplementationRecommendation PROBLEM

How to grow sustainably without undermining the value of LV?IntroductionIssuesAlternativesAnalysisImplementationRecommendation ISSUESLimited capacity results from handcraftOne-third of the sales in Europe were made to Chinese touristsCounterfeits and copies in the marketPotential financial risk Current ratio is low (1.58) Current ratio=Current Assets/Current LiabilityIntroductionIssuesAlternativesAnalysisImplementationRecommendation ISSUES

IntroductionIssuesAlternativesAnalysisImplementationRecommendation SWOTStrengths

QualityControl of end to end ProductionNo upper limit to pricing for absolute luxuryBrand ImageDominant player in the market

Weaknesses

Limited Capacity for hand made itemsLow Asset to Liability RatioBusiness units with low profitabilityBusiness units with low growth

Global Luxury Goods Market by Region and Estimated Growth RatesShare of Total Market in 2011Estimated Growth 2012 (Euro)Americas 30%13%Europe37%5%Japan9%8%Asia-Pacific19%18%Rest Of The World5%8%IntroductionIssuesAlternativesAnalysisImplementationRecommendation SWOT contd..

Opportunities

High Growth in Asia PacificPeople Becoming Richer in Asia PacificExpansion in the rest of the worldAcquire other Luxury Brands

Threats

Dilution of Brand ImageCurrency Exchange fluctuationThreat to Quality and UniquenessCounterfeiting

IntroductionIssuesAlternativesAnalysisImplementationRecommendation DECISION CRITERIALABELDEFINITIONDESCRIPTIONIMAGEBrand ImageHow much will the alternative benefit LVMHs brand image?PROFITProfit Growth PotentialHow much growth will the alternative bring to the bottom line?AFFORDCost of ImplementationHow affordable is the alternative to implement?SPEEDTime to implementationHow quickly can the alternative be implemented?IntroductionIssuesAlternativesAnalysisImplementationRecommendation DECISION CRITERIAWEIGHTIMAGEPROFITCOSTTIME2X1X1X1XIntroductionIssuesAlternativesAnalysisImplementationRecommendation DECISION CRITERIASCALEAll criteria are rated on a scale of 1 (lowest) to 3 (highest)132IntroductionIssuesAnalysisImplementationRecommendation Alternative1:Consolidation

IntroductionAlternativesIntroductionIssuesAlternativesAnalysisImplementationRecommendation Alternative1:Consolidation

IssuesAnalysisImplementationRecommendation IntroductionAlternativesIntroductionIssuesAlternativesAnalysisImplementationRecommendation Alternative 2: Diversification

IssuesAnalysisImplementationRecommendation IntroductionAlternativesIntroductionIssuesAlternativesAnalysisImplementationRecommendation Alternative 2: Diversification

Less focus on innovationPromote weaker brands with stronger brandsIssuesAnalysisImplementationRecommendation IntroductionAlternatives22IntroductionIssuesAlternativesAnalysisImplementationRecommendation Alternative 3: Expansion

IssuesAnalysisImplementationRecommendation IntroductionAlternativesIntroductionIssuesAlternativesAnalysisImplementationRecommendation Alternative 3: Expansion

Focus on high profit businessLower brand valueIssuesAnalysisImplementationRecommendation IntroductionAlternativesIntroductionIssuesAlternativesAnalysisImplementationRecommendation Decision Matrix

AlternativesImage (2X)Profit(1X)Afford(1X)Speed(1X)Net ScoreConsolidation323314Diversification22129Expansion331212IntroductionIssuesAlternativesAnalysisImplementationRecommendation RECOMMENDATIONConsolidation

Focus on the high-growth fashion and leather goods marketTake resources out of low-growth market. Sell low-growth brands and partial ownership of other brandsImprove the exclusivity of the Louis Vuitton brand.

IntroductionIssuesAlternativesAnalysisImplementationRecommendation SALES PLAN:READY TO WEARFocus on sales in Asia-Pacific and U.S.Accelerate planned LV store openingsFocus innovation on new LV productsSell limited products only in EU stores

IntroductionIssuesAlternativesAnalysisImplementationRecommendation SALES PLAN:MADE TO MEASUREIncrease private fittings in Asia/U.S.Train French employees to work overseasFocus on exclusivityFittings only in EU for limited products

IntroductionIssuesAlternativesAnalysisImplementationRecommendation FINANCING PLANConsolidate profits by selling Partial ownership positionsUnaligned brandsUse profits to fund focus on LV brandIncrease pricing selectively

$IntroductionIssuesAlternativesAnalysisImplementationRecommendation BRAND IMAGEFocus on exclusivityBetter personal relationships for key customersEnhance membership program using mobile technologyBy invitation only events

IntroductionIssuesAlternativesAnalysisImplementationRecommendation SUMMARYFOCUS ON LOUIS VUITTONBE EXCLUSIVEBE THE BEST

Thank youQ&A