Individual Research Report

L.V.M.H., or Mot Hennessy Louis Vuitton, in a nutshell, is a French multinational firm

specializing in luxury products. Sales of wine and spirits account for 20% of LVMH Group's
income, while sales of apparel and leather goods account for 34%, sales of perfume and
cosmetics account for 16%, sales at duty-free shops account for 25%, and sales of jewelry
and watches account for 5%. In 1987, Louis Vuitton and Moet Hennessy joined to form
LVMH for an estimated $4 billion. Both Mot-Hennessy (which was originally two different
wineries, Mot & Chandon and Hennessy) and Louis Vuitton are well-known luxury brands. It
seems that the current CEO of Mot Hennessy and the current president of Louis Vuitton have
been at odds about who should have the most control within LVMH since the 1987 accord.
Louis Vuitton's president, Racamier, approached Bernard Arnauld, the most influential figure
in LVMH and the luxury business as a whole at the time, to help elevate his status inside the
LVMH organization. In time, though, Bernard Arnauld began to show signs of being
someone with loftier aspirations, and this made Racamier wary of him.

Luxury stores offer a different range of products and market themselves in a different way
than more general stores. Even though PP&E isn't essential to LVMH's business model, the
company still needs a strong marketing plan to become the leader in a profitable market.
Based on Porter's generic strategy framework, LVMH dominates the hybrid market. They
advocate for companies to employ attractive visuals and are always experimenting with new
offerings and marketing strategies (like green practices, celebrity endorsements, and
environmental impact).

Even though many important European markets are still hurting badly because of the
economic shutdown, LVMH has still become Europe's most valuable group. Statistics looked
at by Finaria show that the French luxury goods company LVMH made a staggering $319.4
billion (€264.6 billion) in sales on February 26, 2021. With this achievement, LVMH
surpassed even Nestlé, the Swiss food behemoth, to become the biggest company in Europe
by value. It is a tribute to the success of building a very strong brand value in the market and
getting consumers to know about the brand. The Baader-Meinhof effect is the second
strongest contribution to earnings that can't be questioned, and its importance can't be
overstated. LVMH's chain shops in major shopping malls all across the nation are always
placed in very visible and accessible places. This not only raises the value of brand awareness
but also makes it simpler for LVMH's clients to learn about and recall the company's many
brands. While LVMH is the only organization that brings together the majority of items from
high-end brands, this does not make it much more difficult to turn a profit; on the contrary, it
boosts the level of confidence that consumers have in the company. As a result, LVMH is a
group that, in comparison to other groups in the same product area, has a high degree of
consumer loyalty to the brand (according to Global Times).

Nonetheless, this enormous firm has a great deal of room for improvement. LVMH is a
conglomerate that unites almost all aspects of the fashion industry; yet, in comparison to its
competitors, the jewelry brand does not actually provide a diverse selection of products that
are appealing to buyers. The product's cost is an additional deficiency that can be overlooked
as a potential issue. Although all of LVMH's goods belong to the luxury market, the company
nonetheless sells them at prices that are much higher than those of other major companies.
The third factor, which is also the most significant issue influencing the income of the firm, is
that LVMH does not place a primary emphasis on selling products via online channels.
According to Statista, the market share of online sales has increased at an unprecedented rate,
going from 1.1% in 2004 to 64% in 2020, which is an increase of 64 times in only 16 years.
On the other hand, it is unusual for luxury firms that fall into this category to sell their wares
via their own websites. On the majority of their websites, you can only find images and
information pertaining to their most recent collection. It is highly challenging for customers
who live a great distance away or who do not have the time to go to the shop in order to
purchase items from LVMH.

Even though LVMH's management plan is too smart to ignore, you can't deny that it works.
There are six ways that human resource management, organizational design, and leadership
work together to make a company as strong as it is today. As a first point, the decentralized
organization's efficiency is not to be discounted. The guiding principles of LVMH's
operations and organizational structure allow the company to be flexible and responsive to
the requirements of its clients. By keeping operations decentralized, a company may be more
accessible to its consumers and make more informed, timely, and appropriate strategic or
decision-making calls. In addition, LVMH's staff would be boosted by this operational
strategy. That demonstrates real entrepreneurial spirit and motivates them to take greater
initiative. Taking this course of action would strengthen LVMH's reputation as an employer
and draw a more diverse and talented workforce into the company.

One further factor that contributed to the success of the firm was its policy of organic growth.
The LVMH organization has placed a strong emphasis on organic growth in recent years. It
makes significant investments in the development of its subsidiaries and brands, which has
resulted in the acceleration of the brand's expansion and has helped to preserve its
uniqueness. Also, the LVMH corporation understands that its employees are one of its most
valuable assets, which is a factor that helps to its organic growth. As a result of this, it is very
important to support their professional growth.

A third concept is a vertical integration. The ability to exert command over the whole value
chain, from raw materials to finished goods to targeted retail, is a key benefit of vertical
integration. In this way, LVMH can better manage and maintain its brand's reputation.

Since LVMH is such a massive corporation, the employees there have been able to pool their
respective resources and produce significant synergies. It promotes synergy while preserving
the individuality of each brand at the same time. This approach has been beneficial for each
of the company's brands. Because of this synergy, both brands, as well as Maison's, would be
able to enjoy continuous success.
LVMH has maintained its riches and continued to thrive throughout the years thanks to the
preservation of its savoir-faire. The LVMH conglomerates approach both their thinking and
their actions with an eye toward the future. They are all striving to preserve their uniqueness
while still keeping their pricing high. The main business, LVMH, together with its
subsidiaries, have developed innovative initiatives to facilitate the dissemination of specialist
knowledge. Also, it makes careers in the creative industries more enticing to members of
Generation Z. (those younger than 25).

When looking at LVMH's performance across all of its divisions and regions, they did an
excellent job of striking a balance. It would let the LVMH houses keep growing at a steady
rate with a balanced set of resources and a presence in many places. This stability would give
the company the strength to weather the effects of economic shifts and fluctuations.

As new fashion labels appear at a rapid pace, competition in the industry becomes quite
tough. For this reason, LVMH is under continual pressure to develop new product policies
and marketing strategies in order to sustain and expand its profit margins. Also, the fashion
industry has in recent years grown cognizant of the importance of environmental
considerations. Governments in certain areas have enacted regulations designed to help
businesses reduce their environmental impact. Making use of only eco-friendly components.
The business's expenses would rise as a result of this. The value-added tax (VAT) rise would
have an effect on LVMH's bottom line and the environment. As consumers would have less
discretionary spending after the VAT hike, LVMH may see a decline in sales and an
influence on customer purchasing behavior.

LVMH's business operations and plan for growth have helped the company grow in a good
way. As a result, LVMH has become a leader in the market for luxury products and has
gained a significant market share. It is not inferior to rivals like Richemont and Kering, even
when compared to such companies. He is also making slow but steady progress toward
recovery from the effects of COVID-19. Even if it has had a successful year, it has to pay
even closer attention to the external environment and the activities of its rivals in order to stay
ahead of the game. The competition has also gotten tougher in a number of different markets,
which means managers need to be more aware than ever. LVMH's business plan not only
gives the corporation a distinct path to follow but also leaves room for expansion.

Word Count: 1506 words.

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