COMPETITIVE STRATEGY OF LOUIS VUITTON

Running head: COMPETITIVE STRATEGY OF LOUIS VUITTON
Competitive Strategy of Louis Vuitton
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COMPETITIVE STRATEGY OF LOUIS VUITTON1
Table of Contents
Introduction................................................................................................................................2
Summary....................................................................................................................................2
Diversification Strategy Issues in Louis Vuitton.......................................................................3
Application of strategy in Louis Vuitton...................................................................................4
PESTEL Analysis of Louis Vuitton...........................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

COMPETITIVE STRATEGY OF LOUIS VUITTON2
Introduction
Competitive strategy refers to the business approach that is undertaken by a company
that helps in attracting the customers and delivering the superior value to the people. It helps
in fulfilling the expectations of customers and strengthening competitive position of a
company in the market (Rothaermel 2016). The managers want to improve market position of
company by providing satisfaction to customers. It helps in prescribing the ways that can help
a business in building the sustainable competitive advantage. The management adopts the
action plan that helps a company in competing in a successful manner with competitors
within the market (Franco, Urcan and Vasvari 2016). Louis Vuitton refers to the French
fashion house and the luxury retail company that was founded in the year 1854. It is a leading
fashion house and it sells the products with the help of the boutiques, department stores and
with the help of the e-commerce section of the website. This report throws light on the
concept of the competitive strategy formulation model and the external environment of Louis
Vuitton. This report discusses about the importance of Corporate-level Diversification for
Louis Vuitton and the strategy issues that the company have to face in the case of
diversification in the company.
Summary
The company Louis Vuitton have been chosen as it is a leading luxury product group
and the net sales of company have grown in last two years. The corporation has achieved
strong earning growth in the midst of the slumping economy with the help of its successful
competitive strategies. Louis Vuitton Moet Hennessy (LVMH) is the largest luxury product
company of the world that helped it in earning sales of around 12.2 billion euros in the year
2012. It carried various kinds of prestigious brand names in various sectors including wine,
fashion, jewellery along with the perfume. The corporation has acquired the 50 luxury brands

COMPETITIVE STRATEGY OF LOUIS VUITTON3
like Donna Karen, Sephora along with Fendi. The corporation has also benefitted younger
brands with the help of the synergies that have developed in business group. The company
lays emphasis on the aspect of the core business design and the marketing that have helped in
providing benefits to the brand (Jang 2017).
The case of Louis Vuitton is interesting on account of the fact that the company have
been able to rise above the various competitors like the Mimco, Status Anxiety and The
Horse with the help of its effective business strategies. Louis Vuitton have adopted the
expansion strategy to increase the scope of the activity of the business (Linton and Kask
2017). It have helped in developing and introducing the products that have enabled the
company to penetrate existing markets and increase the market share, thus improving the
performance, growth and prestige of the company.
Expansion is also providing financial benefits and improving sustainability of the
company (Sakhartov 2017). The Corporate Level Diversification assists Louis Vuitton in the
co-ordination of the strategies and in developing the synergy that can help in the development
of the business (Parast 2017). It can help in the sharing of the departments and the resources
of the company that can help the company in experiencing economies of the scale that can
help the company in reaching the efficiency. The using of the PESTEL analysis model can
help Louis Vuitton in gauging the external environment that can help them in taking the
advantages of the opportunities and the threats.
Diversification Strategy Issues in Louis Vuitton
Louis Vuitton executed a strategy in the year 2001 with the help of the creation of the
diversified portfolio of the luxury brands that have helped the company in expanding in the
various regions. The company adopted semi-related diversification strategy to improve the
value chain of the company that can help it in getting competitive value strategic fit (Singh et