Luxury Goods Industry
Situational Analysis
Presented by:
Victoria Dinkins
Trion King
Luxury Goods Industry
Definition of Luxury Goods Industry
Excellence, Superior Service
Elite Population
Fragmented Industry
22% of worldwide industry sales
Major Competitors:
Louis Vuitton Moet Hennessy
Gucci
Richemont
Bulgari
Hermes
Obsession with excellence in every
luxury-goods company
E-Commerce/Net-Enhanced
Organization
Internet/World Wide Web
Makes it easy to market products
overseas
Speeds up globalization
Aims to transform customers into
“connoisseurs”
Allows for accessible information
establishes ties between consumers and a
brand, and enhances persuasion
Internet = Communication = More Informed Buyer
Threats & Opportunities
e-Commerce/NEO
Needs considerable local adaptation
retailing is still very localized
Informality, community spirit, openness –
similar to flea market
position between mass advertising and personalization is
a real challenge
Lacks necessary quality of attention to
detail
Impersonal communication
Allows companies to build long run
relationships with customers
converging possibility between internet user profiles and
the luxury consumer
Economic Globalization &
Outsourcing
Unconventional approaches to managing a
multinational business
Manage business in various countries as a
single system
International acquisitions
LVHM – U.S. fragrances and cosmetics
Less dependent on outsourcing or
licensing
move production capacity to China
Emerging markets equal to 7% to 9%
Asian markets constitute 7% of global
sales
Sales in Japan equals 38% of the industry
Threats & Opportunities
Economic Globalization/Outsourcing
Outsourcing labor has perception of
cheaper products
Rising costs deteriorated margins
value-added taxes driving Chinese
prices up 30%
high acquisition costs
Maintaining image and reputation
Threat of substitutes
QUESTIONS
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