Applied Corporate Strategy

Applied corporate strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
External analysis ........................................................................................................................3
Porter's five forces ......................................................................................................................5
Resources of Lmvh ....................................................................................................................7
Value chain .................................................................................................................................8
VRIO..........................................................................................................................................10
Evaluation of strategy................................................................................................................11
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Corporate strategies is might be decision-making while looking across all business firms along
with that identified in how to create their value (Goethel And et.al., 2019). LVMH is
multinational corporation company with having many products such as clothing, cosmetics,
jewellery, perfumes, watches, wines. This report explains external and internal analysis plus
strategies evaluating of company with some different matrix.
MAIN BODY
External analysis
Business environment is a set of internal and external factor such as- employees, management,
customers, environment, political, economical etc. which affect the operations of an organisation
Political factors
Lvmh is a popular company in selling clothes, cosmetics, accessories, jewellery and perfumes all
over the globe. So the political changes of different countries affect the profit of the company.
Political factors includes the changes in laws, taxation policies and changes in political parties.
Government has a right to tighten or can liberalize the taxation policies to increase their revenue.
Same as government can impose new rules for the employees and for the wages. Like due to the
proliferation of Covid, government of many countries impose a rule to work with 50% of the
staff in companies and offices. It hits the working of Lmvh (Sholihah 2019).
Threat
Political factor has become a threat also for the company to expand the business in the world.
Country like china has imposed high import duties on the product of Lmvh which makes the
product more expensive and overpriced which becomes unaffordable for the people of china to
buy and on the other hand, Chinese product were cheap and affordable so the company has to
face huge loss in that country and bound to stop working in china.
Environmental factor
It refers to the economical, cultural, demographic, technological factors which impacts the
operation, profit and growth of the company. Environmental factors are hard to control by any
organization. In the case of Lmvh this factor has impacted badly to the company as it has faced
many obligations because most of its like- leather bags, wallets and jackets has been made from
the skin of animals so the animal welfare has claimed the company to harm the animals and
environment as well (Jelassi,2020)

Threat
Environmental factor has reduced the profit of the company. Due to the obligations of animal
welfare it has put a negative impact on the brand value and goodwill of the company. To not
harm to animals most of the people avoid buying product which made from leather. So the profit
of Lmvh has reduced. The impact of coronavirus also hit the profit of Lmvh. Due to the health
crisis many store and shops has remained close for months similarly all the stores of Lmvh
remains shut for weeks so it affects the margin profit and annual revenue of the company. It also
bounds the company to change it entire policies and strategies for the survival (Trimo, 2019).
Social factors
It refers the factors like lifestyle, buying habit, class of people, population etc. which impact an
organization. This factors work in the favour of Lmvh. Due to this sales of company's product
has been increased so it is an opportunity for the company.
Opportunities
Lmvh is enjoying its amazing brand value among the society. As it is a European company so
there is a belief among people that the products of European company is rich inn quality and
luxurious as compared to the products of Asian countries. Even people love to explore want to
try new brands and for more exclusive brands they can switch from their old brands. So it is an
opportunity for the company to expand the business (Yin, 2020).
Economical factor
This factor directly impacts the business and financial state of the company. This factor has put
negative impact on Lmvh.
Threat
economical factor is a threat for the company as the entire world is facing recession so people
preferring necessity goods over luxurious once. While Lmvh known to sell high quality and
expensive products.
Opportunity
Lmvh can take this as an opportunity they can invest in developing countries like- India whose
economy is in growth face and company can rule the market (Irfan, 2019).
Competitive factors