1 DECLARATION I, …, declare that I am the sole author of this assignment, and the work is the result of my own investigations, except where otherwise stated. All references have been duly cited. 1 Table of Contents INTRODUCTION .................................................................................................... 2 I. 1. BACKGROUND LOUIS VUITTON ................................................................................... 2 2. AWARDS AND REGOGNITION ....................................................................................... 3 II. INTERNAL ANALYSIS .............................................................................................. 3 1. FINANCIAL PERFORMANCE .......................................................................................... 3 2. SWOT ANALYSIS ............................................................................................................. 4 3. BUSINESS STRATEGIES ............................................................................................ 5 4. ANSOFF MATRIX ......................................................................................................... 6 III. INTERNAL ANALYSIS ............................................................................................. 6 1. MARKET TREND/SIZE /SHARE/GROWTH/OPPORTUNITIES ................................. 6 2. PENETRATION ................................................................................................................. 8 3. TARGETING /SEGMENTATION – BRIEF TARGET MARKET ...................................... 8 IV. COMPETITIVE ANALYSIS ...................................................................................... 9 1. POSITIONING MAPPING ............................................................................................. 9 2. PORTER’S FIVE FORCES ......................................................................................... 10 3. BCG MATRIX .............................................................................................................. 10 V. EVALUATE THE EXTERNAL ENVIRONMENT – PESTLE ................................. 12 VI. VEVALUATE THE MARKETING COMMUNICATION STRATEGIES ........... 13 VII. CONCLUSION .................................................................................................. 13 1. ADDRESS THE QUESTION ON DECISION MAKING FOR COMPETITIVE ADVANTAGE ...................................................................................................................... 13 2. REFERENCES ............................................................................................................ 14 1 INTRODUCTION I. Marketing data analytics is the process of collecting, analyzing, and interpreting data related to marketing activities to understand better the company and its competitors and make informed decisions. Marketing data analytics is vital and essential for companies like Louis Vuitton (LV) to gain a competitive edge in the marketplace. With the help of data analytics, Louis Vuitton is able to better understand customer behavior, optimize marketing spend, improve product development, and create a competitive advantage by offering innovative and unique products, and experiences tailored to customers. 1. BACKGROUND LOUIS VUITTON Louis Vuitton (LV) is a French luxury fashion brand known for its iconic monogrammed leather goods, including handbags, luggage, and accessories. The company was founded in 1854 by Louis Vuitton, who opened his first store in Paris. Today, Louis Vuitton is part of the LVMH Group, which is the world's largest luxury goods conglomerate. Louis Vuitton is renowned for its craftsmanship, attention to detail, and innovative designs. The company has expanded its offerings to include ready-to-wear clothing, footwear, jewelry, and watches. Louis Vuitton operates over 460 stores worldwide and has a strong online presence, reaching customers in over 100 countries. The company is committed to sustainability and ethical practices, using environmentally friendly materials, and implementing measures to reduce its carbon footprint. Louis Vuitton has also launched initiatives to support education and art, including the Louis Vuitton Foundation, which promotes contemporary art and culture. 2 2. AWARDS AND REGOGNITION Louis Vuitton has received numerous awards and recognition for its products, services, and sustainability efforts, which have contributed to the company's competitive advantage. For exemple, best Global Brand - Forbes, 2021: Louis Vuitton was named the world's most valuable luxury brand by Forbes, with a brand value of $47.2 billion. Second, Best Luxury Brand - Luxury Daily Awards, 2020: Louis Vuitton won the Luxury Daily Award for the best luxury brand for its digital marketing campaign during the COVID-19 pandemic. Additionaly, Best Environmental, Social, and Governance (ESG) Practices - Corporate Knights, 2021: Louis Vuitton was ranked first in the fashion and accessories category in Corporate Knights' Global 100 index of the world's most sustainable companies…. II. INTERNAL ANALYSIS This section will include analysis and evaluation of LV's internal , market , competitive , external environment , marketing communication strategies. The purpose is to gain a comprehensive understanding of the factors that influence the brand's performance and success in the luxury fashion industry. 1. FINANCIAL PERFORMANCE Louis Vuitton is a subsidiary of the French luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton SE, and as such, financial performance information is reported at the corporate level. Here's an overview of LVMH's financial performance and how it impacts Louis Vuitton's competitive advanatge: 3 : Diagram 1: Swot analysis (LVMH Annual Report, 2020) LVMH, the parent company of Louis Vuitton, has seen consistent revenue growth despite the impact of COVID-19, reaching €44.7 billion in 2020. LVMH also boasts strong profitability, with a gross margin of 67% and an operating margin of 21% in the same year. The company's strong financial stability, with a net cash position of €9.6 billion in 2020, enables it to invest in strategic initiatives to enhance the competitive position of its brands. Louis Vuitton, one of the world's most valuable luxury brands, has a brand value of over $51 billion, which allows it to command premium prices for its products and further enhance its competitive advantage. Overall, LVMH's solid financial performance and stability provide a strong foundation for Louis Vuitton's competitive advantage, allowing it to continue innovating and differentiating itself from its competitors in the luxury goods industry. 2. SWOT ANALYSIS Louis Vuitton's SWOT analysis highlights its strengths, weaknesses, opportunities, and threats. The company's strengths include a globally recognized brand reputation, a diverse product portfolio, strong distribution network, financial efficiency, and innovation in design and marketing strategy. However, weaknesses such as over-reliance on a few product lines and high prices may limit market share. Furthermore, the company's opportunities include diversifying its product lines, targeting millennial and Gen Z consumers, and expanding into new categories such 4 as beauty and home appliances. The threats faced by the company include intense competition from other luxury brands, counterfeiting, and changing consumer preferences. To maintain its competitive advantage, Louis Vuitton needs to capitalize on its strengths while addressing its weaknesses. This could be achieved by expanding into new markets and product lines, investing in sustainability initiatives, and addressing threats posed by competition, economic uncertainty, regulations, and changing consumer preferences. By doing so, Louis Vuitton can continue to differentiate itself and maintain its position as a leading luxury brand. 3. BUSINESS STRATEGIES LV’s business strategies focus on differentiation and innovation to maintain its position as a leading luxury fashion brand. The brand differentiates itself by offering high-quality, unique, and exclusive products and services that cater to the tastes and preferences of its target audience. LV employs various strategies to differentiate itself from its competitors. One of the primary strategies is product innovation, where the brand continuously introduces new and unique products that appeal to its customers. For example, LV has launched collaborations with artists and designers, such as Jeff Koons and Virgil Abloh, to create exclusive collections that differentiate the brand from its competitors. Another key strategy is brand building, where LV invests heavily in marketing and advertising to build a strong brand image and increase brand awareness. The brand has a strong social media presence and has partnered with influencers and celebrities to promote its products. In terms of pricing, LV positions itself as a premium luxury brand, with prices that reflect its exclusivity and quality. This pricing strategy targets high-end consumers who are willing to pay a premium for luxury products and helps the brand maintain its 5 position as a leader in the luxury fashion industry. Overall, Louis Vuitton's business strategies are focused on differentiation and innovation, as well as brand building and pricing, to maintain its competitive advantage in the luxury fashion industry. 4. ANSOFF MATRIX The Ansoff Louis Vuitton (LV) employs several expansion strategies, as outlined in the Ansoff Matrix, to maintain its competitive advantage in the luxury fashion industry. LV's Ansoff Matrix strategies include market penetration, market development, product development, and diversification. LV's market penetration strategy aims to increase market share in existing markets through aggressive marketing, expanding product offerings, and distribution channels. In contrast, the market development strategy focuses on expanding into new geographic markets, such as emerging markets, and opening new stores in popular tourist destinations. LV's product development strategy emphasizes introducing new products and services to existing markets through collaborations with artists and designers. The brand's diversification strategy focuses on expanding product offerings beyond traditional leather goods, such as ready-to-wear, footwear, and accessories, as well as entering new service areas, such as luxury hospitality with the Cheval Blanc brand. Overall, LV's Ansoff Matrix expansion strategies aim to increase market share, expand geographic reach, introduce new products and services, and diversify offerings to maintain its competitive advantage in the luxury fashion industry. III. INTERNAL ANALYSIS 1. MARKET TREND/SIZE /SHARE/GROWTH/OPPORTUNITIES 6 The global luxury fashion market has been growing steadily due to increasing disposable income, urbanization, and changing consumer preferences. The market is expected to grow at a CAGR of 3.5% from 2020 to 2025. Consumers seek luxury products that reflect their personal values, lifestyles, and aspirations, and Louis Vuitton's focus on timeless elegance, quality craftsmanship, and innovative design is well-positioned to capture this trend. Louis Vuitton is one of the leading players in the luxury goods market, with a market share of around 4.4%. The luxury goods market was valued at $303.38 billion in 2020, and it is expected to reach $390.66 billion by 2025, growing at a CAGR of 5.1%. Louis Vuitton has been expanding its presence in emerging markets such as China, India, and Southeast Asia, which are expected to drive growth in the luxury goods market in the coming years. Louis Vuitton is the third-largest luxury fashion brand in the world, with a brand value of $47.2 billion. Despite the challenges posed by the COVID-19 pandemic, LV has continued to experience growth, reporting revenue of €14.7 billion in 2020, up from €13.7 billion in 2019. The company's revenue growth has been driven by strong demand for its products in Asia and the Americas and its ability to adapt to changing consumer preferences and market conditions. The global luxury goods market is expected to rebound and grow at a CAGR of 6-8% from 2021 to 2025, providing further growth opportunities for Louis Vuitton. The company can leverage its strong brand identity, reputation for quality and innovation, and its extensive distribution network to expand its product offerings and reach new customers. LV can also focus on sustainability and ethical sourcing, which are increasingly important to consumers in the luxury goods market. Additionally, LV can invest in digital technologies and e-commerce to enhance the customer experience and reach a broader audience. 7 2. PENETRATION Louis Vuitton (LV) has opportunities to increase its market share through penetration in the luxury fashion market, particularly in Asia and the men's luxury fashion market. LV can tailor its product offerings and marketing strategies to the preferences and values of Chinese consumers to capitalize on the growing luxury goods market in China. According to a report by Euromonitor, the global men's luxury fashion market is expected to grow at a CAGR of 4.8% from 2020 to 2025.V should also leverage its brand identity and reputation for quality and innovation to capture a larger share of the global men's luxury fashion market. To develop a competitive advantage, LV should focus on product differentiation, customer experience, and distribution strategies, including leveraging its innovative designs and high-quality materials, focusing on sustainability and ethical sourcing, investing in digital technologies and personalized services, and expanding its distribution network. 3. TARGETING /SEGMENTATION – BRIEF TARGET MARKET LV targets high-income consumers who value quality, craftsmanship, and exclusivity. The company's target market includes both men and women who are fashion-conscious and have a strong desire to own luxury goods. The company uses a variety of segmentation strategies, including geographic, demographic, and psychographic segmentation. Geographically, LV targets consumers in both mature markets such as North America and Europe, as well as emerging markets such as China and India. Demographically, the company targets consumers who are typically in their 30s to 50s, with a high income and a college degree. Psychographic ally, Louis Vuitton targets consumers who are sophisticated, stylish, and appreciate the unique design and craftsmanship of luxury fashion. 8 To develop a competitive advantage, Louis Vuitton can refine its targeting and segmentation strategies by leveraging customer data and insights to better understand the preferences and behaviors of its target market. By using data-driven approaches, the company can tailor its product offerings and marketing strategies to effectively reach and engage its target market, ultimately driving sales and brand loyalty. IV. COMPETITIVE ANALYSIS 1. POSITIONING MAPPING Diagram 2: Louis Vuitton positioning map (2022) In terms of positioning mapping, Louis Vuitton occupies a unique position in the luxury fashion market, with a strong brand identity and recognition worldwide. The company's positioning is often associated with other high-end luxury brands such as Chanel, Gucci, and Hermès. To develop a competitive advantage through positioning, Louis Vuitton can continue to focus on product differentiation, brand identity, and customer experience. The 9 company can leverage its reputation for quality and craftsmanship to create unique and innovative products that differentiate it from competitors. Additionally, Louis Vuitton can continue to invest in marketing strategies that reinforce its brand identity and appeal to its target market. 2. PORTER’S FIVE FORCES Porter's Five Forces is a framework used to analyze the competitive dynamics of an industry. When applied to Louis Vuitton, the framework suggests that the luxury fashion industry is characterized by high barriers to entry, a relatively small number of competitors, and a high degree of supplier and buyer bargaining power. Additionally, the threat of substitutes and new entrants is relatively low. To develop a competitive advantage, Louis Vuitton can leverage its strong brand reputation and invest in product innovation to differentiate itself from competitors. Additionally, the company can focus on expanding its distribution channels to reach new markets and further reduce the threat of substitutes. By developing strong relationships with suppliers and offering a unique and exclusive customer experience, Louis Vuitton can also reduce the bargaining power of suppliers and buyers. 3. BCG MATRIX 10 Diagram 3: BCG matrix for Louis Vuitton (2022) The BCG matrix is a tool used by companies to evaluate their product portfolio and allocate resources effectively. In Louis Vuitton's product portfolio analysis using the BCG matrix, their star products are their leather goods, which have high market share and growth potential. These products generate significant revenue for the brand and are strategic priorities. The brand's cash cow products are its perfumes and cosmetics, which generate consistent revenue despite being in a mature market. These products require minimal investment but generate significant profits for the brand. Louis Vuitton's question mark products are its ready-to-wear clothing and footwear, which are in a growing market but have low market share. These products require significant investment to grow market share but have the potential to become stars in the future. Finally, the brand's dog products, such as sunglasses and watches, have a low market share in a mature market and may require divestment in the future. 11 LV’s product portfolio is well-positioned for competitive advantage, with highperforming products generating significant revenue and having a strong market position. The brand also has opportunities to invest in question mark products to grow its market share in those categories. By using the BCG matrix, Louis Vuitton can make informed decisions about resource allocation and prioritize investments in products with the greatest potential for growth and profitability. V. EVALUATE THE EXTERNAL ENVIRONMENT – PESTLE Louis Vuitton is a global luxury brand that operates in various countries and is subject to various external factors that affect its business operations. Using the PESTEL framework, we can analyze the external environment of the company. Political factors affect the cost of production and distribution, but Louis Vuitton has maintained good relationships with governments by complying with ethical labor practices and environmental regulations. Economic factors such as exchange rates, inflation rates, and consumer spending can impact the company's revenue and profitability, but Louis Vuitton has maintained its profitability by focusing on high-end luxury products and adapting to changing consumer demands. Sociocultural factors such as cultural values, lifestyle, and demographic shifts influence Louis Vuitton's brand image, and the company invests in marketing and branding strategies that resonate with consumers. Technological factors have enabled Louis Vuitton to improve its business operations by launching e-commerce platforms, developing sustainable materials, and reducing its environmental impact. The company's commitment to sustainability has given it a competitive advantage in the luxury fashion industry. Legal factors such as intellectual property laws and regulations that impact the fashion industry are also important for Louis Vuitton to comply with. Overall, Louis Vuitton's ability to adapt to changing external factors has enabled it to maintain its relevance and profitability in the luxury fashion industry. The company's focus on high-end luxury products, marketing strategies, and commitment to sustainability has given it a competitive advantage. By complying with regulations, 12 using innovative technologies, and engaging in ethical practices, Louis Vuitton has established a strong reputation that resonates with its customers. VEVALUATE VI. THE MARKETING COMMUNICATION STRATEGIES LV’s success as a top luxury fashion brand can be attributed to its effective marketing communication strategies. These include influencer marketing, event sponsorship, brand collaborations, emotional storytelling, and digital marketing. By partnering with celebrities and social media influencers, sponsoring events, and collaborating with other brands and artists, Louis Vuitton has been able to connect with its target audience and create a unique brand identity. Additionally, the brand's emotional storytelling approach, which inspires consumers to travel and experience new cultures, helps to create an emotional connection with consumers. The company's embrace of digital marketing has also enabled it to reach a wider audience and engage with consumers online through its e-commerce website, mobile apps, and social media platforms. Overall, Louis Vuitton's effective marketing communication strategies have helped the brand to maintain its relevance and appeal to younger audiences. VII. CONCLUSION 1. ADDRESS THE QUESTION ON DECISION MAKING FOR COMPETITIVE ADVANTAGE LV's success as a top luxury fashion brand can be attributed to its effective decision-making strategies. The brand's decision-making process is based on datadriven analysis, innovation, maintaining a strong brand identity, and strategic partnerships. Louis Vuitton relies on data to anticipate consumer needs and tailor its products accordingly. The brand invests heavily in research and development to create new materials and technologies that enhance its products. 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