The detailed analysis shows that the firm cannot be beaten despite the tough competition and hence promises a bright future. Thus the report essentially points out the strategic position of the firm and its present and future prospects. The world’s largest luxury commodity retail group, Louis Vuitton Moet Hennessy (LVMH) functions on the basis of four parameters viz. its product line, the pattern of distribution, style of communicating its product offerings to a large number of consumers and its price points.
The luxury goods group renders greater impact on the first three activities for which the stress rendered by charging high prices gets mediated. Louis Vuitton had used its distribution and communication styles to lure huge groups of customers to its beautifully ordained stores spread along the region. Furthermore, the company spends a lot on advertising activities to create mass awareness of its products and shops. The price strategy followed by Louis Vuitton helps the company earn a huge margin of around 40 to 45 percent.
A comparison drawn on the revenue margins of other luxury brand companies reflects that Louis Vuitton stands far ahead in the race. The world-renowned luxury goods brand states that the maximum number of consumers belongs to the middle-level groups while the rich elites constitute only a niche segment. However, Louis Vuitton observes that owing to the event of recession the structure of consumer spending has countered a radical change. The consumers of the luxury goods retail chain who were not price-sensitive previously became highly aware of the changing economic situation.
This resulted in a huge drop in sales of such luxury commodities, which came to be observed as objects of lesser importance. Owing to the change in the market condition brought about by recession the company felt the need to redesign its products to focus on their basic usage parameters rather than making it gaudy. .
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