Comprehensive Analysis of LVMH's Applied Corporate Strategy Report

This report provides a comprehensive analysis of LVMH's corporate strategy. It begins with an introduction outlining the importance of organizational strategy and the use of various analytical tools. The report then delves into an external analysis using PESTEL and Porter's Five Forces models to assess the political, economic, social, technological, environmental, and legal factors influencing LVMH, as well as the competitive forces within its industry. An internal analysis follows, examining LVMH's value chain and applying the VRIO framework to evaluate its resources and capabilities. The report concludes with an evaluation using the TWOS matrix, assessing the suitability, acceptability, and feasibility of strategic options. The analysis covers financial, technological, intangible, tangible, and organizational resources, providing a detailed overview of LVMH's strategic position and potential for growth within the luxury goods market. The report also highlights key strengths, weaknesses, opportunities, and threats affecting the company, and how it deals with the competitive environment.

Applied corporate strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
Question 1) External analysis ....................................................................................................3
PESTEL analysis.........................................................................................................................3
Porter's five forces analysis.........................................................................................................5
Question 2) Internal analysis of company...................................................................................7
Value chain analysis....................................................................................................................8
VRIO framework........................................................................................................................9
Question 3) Evaluation................................................................................................................9
TWOS matrix..............................................................................................................................9
Suitability .................................................................................................................................11
Acceptability:............................................................................................................................11
Feasibility..................................................................................................................................11
REFRENCES ................................................................................................................................13

INTRODUCTION
Organisation is very important for success as well as growth by enhancing employment
opportunity and increase living standard of individual person. There are various tools and
techniques adopted for analysing micro as well as micro atmosphere of organisation. In this
current assignment, Louis Vuitton is the company is taken into account that is considered as a
LVMH. The focus is on providing different types of luxurious products like clothes, accessories
in various countries. This organisation is depending upon France and they possess 60
subsidiaries around the world. This assignment deals with PESTEL, Porter five force models for
analysing internal as well as external environment of company. Moreover, they also focus on
various strategies which are important to expand organisation at large level (Breliastiti and
Josephine, 2017).
Main Body
Question 1) External analysis
PESTEL analysis
PESTEL analysis is a technique that is adopted to organise different external environment
which imposes direct effect on company. This analysis helps n in implementing strategic plan
that help in growth of environment of company. The primal concept is assessed political,
economic, technological, environment and legal as well as social. Therefore, the LVMH adopted
PESTEL analysis is going to be mentioned below:
Political factor this element considers the impact of different governance connected to
decision of organisation. These elements involve stability in political condition around the
organisation for investment, policies tax and many more. Therefore, the Brexit focuses on deal
with outcomes that help in enhancing tariff and also bringing political stability at UK. There are
different issues and problems which are faced by organisations that are connected to trade union
of French that imposes negative impact on corporation named as LVMH. Due to having a
political stability in different nation of Asia, the organisation explores their organisation and also
provides cheap labour in nations and enhance profit margin during the period of time.
Economic factor there are different element that is connected to economic atmosphere of
organisation like employment rate, disposal income, interest rate as well as many more that
impose direct effect on outcome of organisation. In reference of chosen company, due to rising

covid-19 pandemic that imposes direct effect on disposable revenue of consumer. It is
determined as a threat for business organisation. In addition to this, due to enhance in need of
luxury item around emerging market of Asia offer organisation an opportunity that help in
enhancing profit margin (Corduan, 2017).
Social factor this factor offer the organisation detail regarding basic characteristic as well
as changes as well as preferences of consumers that impose direct effect on sales of organisation
like, lifestyle changes, growth rate and many more. Therefore, due to having good brand image
of organisation that help in marketing their goods at high price that help in increasing profit
margin in future period of time. In addition to this, due to frequently change in demand or need
of customer that imposes negative effect on income and profit of business organisation.
Technological factor Technology plays a very important role for implementing different
kind of operation of business organisation. It involves technological automation, incentive and
many more. Hence, due to enhance in automation in industry related to fashion increases
opposition from Union of worker and that is determined as a threat for organisation. Due to
implement different E-Commerce portal of organisation offer opportunity to market their goods
online and enhance their user as well as brand visibility.
Environmental factor like weather condition, corporate pollution are determined as a
major concern of different organisation. Due to alteration in climate as well as international need
for practices related to sustainable organisation. There are different kind of program related to
social responsibility organised by specific organisation by adopting Ozone friendly clothing item
that help in decreasing carbon footprint that imposes positive effect on the company. In addition
to this, there are different products which are provided by organisation that possess animal skin
imposes negative impact on reputation of organisation. It is determined as a threat for success
and profitability of company (Helmold, 2020).
Legal factor of organisation involves different legislation, lawsuits as well as regulations
that impose direct effect on operation and functions of company. These elements involve licence,
labour law and many more. Herein, the organisation focuses on decrease different counterfeiting
goods that are sold at market place and grab around 10% share of market which is taken by
counterfeiting company. This policy of the company grabs opportunities and increase
profitability by reducing level of competition within business organisation. Therefore, demand

related to Labour Law and increases in wage rate that imposes negative impact on business
organisation and enhances the cost of production during particular phase of time period.
Porter's five forces analysis
Porter five force model adopted by company to assess structure related to industry as well
as potential probability related to present strategy of organisations that help in understanding
level of competition during particular phase of time period. In addition to this, these forces is
determined as a model to assess threat of new entrants, competitive rivalries, substitute products,
bargaining power of consumer as well as bargaining power of supplier. Therefore LVMH adopts
Porter five forces model that is going to be mentioned below:
Competitive rivalry it is determined as a first component that helps in measure level of
competition within an industry and also helps in attracting large number of users within business
organisation. In reference of chosen industry, the threat of competitive rivalry is determined as
low and that is completely depend upon quality uniqueness as well as elegant presentation
related to goods. In addition to this, the primal competition related to this industry is image and
capability of goods that is considered as a status symbol for user other than price. Therefore, it is
not easy for other organisation to implement their business at that level in which LVMH
operates.
Threat of new entrants this model signifies the chances of threat of new entrants within
business organisation is determined as high as organisation provide superior quality product to
its customer in order to satisfy them. But due to entrance of new brand named as Hermes
imposes negative impact on chosen organisation during particular phase of time period. They
attract middle class customer because they provide this brand at less price during particular phase
of time period. Hence, it is not easy for organisation to increase trustworthy customer base
within business organisation. (Köhler and Zerfass, 2019).
Power of suppliers this model assess the power related to supplier that help in influencing
decision taken by business organisation. The power of suppliers and capability to take decision
of organisation is determined as a low. In reference of chosen organisation, the company focuses
on dealing with supplier in less monetary worth for providing superior quality goods. In addition
to this, the company adopt supplier consignment administration strategy to decrease risk that is
connected to raw material while providing superior quality goods. Hence, the organisation
focuses on providing superior quality products and services to its customers for satisfying them.

Power of consumer herein, the organisation focuses on assessing bargaining power of
user within an organisation. The company focuses on targeting customer of high level or middle
level by providing superior quality product and services to them. The organisation focuses on
implementing different kind of strategy that helps in satisfying its customers.
Threat of substitute this element measure threat of substitute which is confronted by
organisation. In this context, the threat of substitute products is determined as high. In reference
of LVMH, due to availability of another luxurious brand at cheaper rate that erode profit of
chosen organisation. Therefore, it is necessary for company to provide superior or unique quality
product to its customer in order to tackle these threat during particular phase of time period
(Landreth, 2016).
Question 2) internal analysis of company
It is important to assess internal analysis of organisation for monitoring and controlling
resources as well as competencies that help in achieving competitive advantage over rivalries at
marketplace. In reference of LVMH, there are various sources which are going to be mentioned
below:
Financial resources it signifies sales as well as profit margin of company that is
necessary for survival of organisation in market. It has been assess that the focus is on using
financial resources in an appropriate manner that help in increasing profit in future period of
time. Finance is important for business organisation in their growth as well as expansion. In year
of 2014, the organisation emphasis on earning profit which is around $5.6 billion.
Technological resources To grow as well as expansion of organisation, it is important to
use innovative technology for achieving competitive edge. In reference of LVMH, they adopt
latest e-commerce tactics to attract large number of buyer. In assistance of this, the company
focuses on using their own website that is determined as a user-friendly and offer ease to its user
to place essential orders. The management team of business organisation adopt innovative
approaches related to digital marketing that increases sales as well as profitability level in future
period of time. The focus is on using robotics to make sure that durability related to bag and
adopt advanced machine in process of production. Appropriate computer software as well as
tools which are adopted by management team to assess recent trend prevailed in the markets. The
main focus is to meet a desired and wants of user in proper way. Therefore, the main focus is to
achieve competitive edge over rivalries at marketplace.

Intangible resources there are various intangible resources such as innovation, creativity,
potentiality of subordinates that is determined as invisible but offer competitive advantage to
organisation. The management team of chosen company focuses on providing superior quality of
fashionable clothes, jewellery and many more for satisfying is customer. The organisation
focuses on having superior brand value that help in attracting large number of user. Furthermore,
it is necessary to have appropriate coordination and cooperation among organisation and its staff
member which is important to achieve pre-decided goal and objective. The resources are
determined as strength of company and offer or achieve higher competitive advantage over
rivalries at marketplace (Lee and Shin, 2018).
Tangible resources signify the resources which is visible for external party and that help
in attracting large number of user. In reference of chosen organisation, there are various tangible
resources such as machinery, tools and many more. There are different plants in France, Italy
Spain as well as other country. Furthermore, the organisation focuses on operating 3700 outlets
as well as around 120,000 subordinate operate their business around the world. There are
different offices, building which help in satisfying need and wants of its user. It has been assess
that the base of customer of company is limited and this is determined as a main weaknesses of
organisation.
Organisational resources signify those kinds of resources which are adopted by
organisation to execute various functions of organisation in appropriate way. It has been assess
that LVMH focuses on using organisational resources that is differentiate from other. These
includes appropriate planning, distribution, administration, controlling that assists organisation to
offer appropriate goods to its user and also focuses on satisfying need in pre-decided period of
time. In addition to this, the management team of organisation focuses on taking help of this
model that help in promoting products at larger level. The focus is on advertising products like
Vanity Fair, Vogue as well as many more in addition to this they also make appropriate use of
platform related to social media for purpose of promotion (Menghua, Yongfang and Guanglin,
2017).
On the basis of above given analysis, it has been said that the organisation possess various
resources are both tangible as well as intangible which is helpful in achieving goal in pre-decided
time period. In assistance of this, the chosen organisation focuses on having a large number of
customer for achieving goal as well as objective in timely manner.

Value chain analysis
It is determined as a framework which is used for offering finish well to end user during
the period of time. It signifies different activities that are undertaken with the purpose of
providing superior quality products to its user. In context of chosen company, the value chain is
going to be mentioned below:
Operation herein, the operation of business organisation is executed in France as well as
Spain that help in satisfying need and want of user in proper way (Naklicka 2020).
Logistic There is appropriate logistic administration system adopted by organisation for
offering goods to its user in pre-decided period of time. Herein, the focus is on adopting sea
route as well as another method so that goods are easily prepared by international audience.
Sales and marketing there are different kind of marketing and sales promotion techniques
adopted by LVMH to increase awareness regarding product between target segments which offer
digital platform magazines which is adopted by a company to advertise or popularize their goods
at larger level.
Post sales services herein, the manager focuses on connecting with consumer after sales
by offering various discounts that is important for attracting large number of customer. And, the
organisation focuses on using value chain for offering better level of experience to its user along
with LVMH in longer run.
VRIO framework
Basis Valuable Rare Inimitable Organised
Financial
resources
Yes Yes No Yes
Human resources Yes Yes Yes Yes
Brand Yes Yes Yes No
Innovation Yes Yes Yes Yes
Quality Yes Yes Yes Yes
Core competency it is assess that core competency related to LVMH is quality related to
goods as well as innovative approaches that offer for achieving competitive benefits over

rivalries at marketplace. Herein, the organisation focuses on offering fashionable goods to its
user in order to retain them for a longer period of time. They have various designer units which
are determined as independent and operate by individual person as well as capable designers. In
assistance of this, there are various innovative approaches which are adopted by chosen
organisation that is important to make sure that sustainability of business organisation in long run
at Marketplace (Pasha, 2020).
Question 3) Evaluation
TOWS matrix
TOWS Opportunities
Company possess strong
presence within Asia- Pacific
region
Staff member of LVMH are
determined as experienced as
well as highly capable.
Threats
Spreading awareness related to
environment.
There are various substitute
prevailed within business
organisation in the market.
Strength
Capable to satisfy need and
wants of its user in quick
manner.
Appropriate brand image
High innovation
SO
By using innovative
approaches, LVMH is
determined as staff member of
company and their main focus
is to satisfy need and want of
its user.
By satisfying need and wants
of its user, they are capable to
achieve growth in Asia Pacific
market.
ST
Its specific brand image
focuses on attracting large
number of user in the market.
Higher innovation offer
competitive advantage to
LVMH, hence it is difficult or
complex for other to imitate
products.
Weaknesses
Lower customers
WO
Through experienced staff
member, they are capable to
WT
It is assessing that increase
awareness regarding protection

Higher competition prevailed
in the market
offer specific goods to its user.
They focus on serving
audience of various nations
and offer goods to them
according to culture and value
that assists in attracting large
number of its user.
of environment; it is important
to better utilization of
resources that helps in
achieving competitive
advantage over rivalries in the
market.
There are various substitutes
prevailed for goods of LVMH,
they require to adopt
innovative as well as creative
approaches that helps in
achieve goals.
There are various strategies adopted by business organisation for retaining them for a
longer period of time. The other innovative approaches offer designer goods to its user during
particular phase off time period. Their focus is on range of goods for attracting large number of
customer in marketplace. Therefore, they focus on exploring their organisation by using local
organisation. They focus on open different outlets in various countries like Asia, America as well
as so on.
Suitability on the basis of given strategy options, the more appropriate for chosen
organisation is it assists in enhancing brand image as well as reputation of company in the
market. It has been assess that organisation focuses on performing their work in luxurious
industry for attracting large number of customer at marketplace.
Acceptability there are different kind of categories related to stakeholder that is depend
upon power as well as interest that is going to be mentioned below:
Keep satisfied the individual person possess higher power as well as interest that help in
satisfying need of user that help in achieving goal in timely manner (Pidun, 2019).
Monitor closely the individual person possess higher power but low rate of interest that
help in tackling customer in an appropriate manner.
Keep informed herein, this person possesses higher power but interest is low in
organisation that is it is important to offer essential information on continuous basis.

Monitor herein, the individual person have low interest and power but do not need to
keep more contribution.
In context of acceptability strategy, it is determined as a highly acceptable. It is essential
for organisation to put stakeholder satisfied in order to stay within organisation named as
LVMH. It has been analysed that customer is determined as the most important stakeholder of
company herein it is important to satisfy its user that help in achieving goals as well as objective
in timely manner.
Feasibility study is determined as a first and foremost strategy for attracting large
number of customer at marketplace. This type of strategy like opening innovative outlets and
expand organisation in various nation require investment. So it is feasible for chosen company to
enhance present product mix by involving innovative perfumes in present product range (Surijah,
2016).
CONCLUSION
On given report, it is assess that organisation is very important for success as well as
growth by enhancing employment opportunity and increase living standard of individual person.
There are various tools and techniques adopted for analysing micro as well as micro atmosphere
of organisation. This assignment deals with PESTEL, Porter five force models for analysing
internal as well as external environment of company. Moreover, they also focus on various
strategies which are important to expand organisation at large level.

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