Luxury Goods Industry Situational Analysis

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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: - PowerPoint PPT Presentation


  • Luxury Goods IndustrySituational AnalysisPresented by:Victoria DinkinsTrion King

  • Luxury Goods IndustryDefinition of Luxury Goods IndustryExcellence, Superior ServiceElite PopulationFragmented Industry22% of worldwide industry salesMajor Competitors: Louis Vuitton Moet HennessyGucciRichemontBulgariHermesObsession with excellence in everyluxury-goods company

  • E-Commerce/Net-Enhanced OrganizationInternet/World Wide WebMakes it easy to market products overseasSpeeds up globalizationAims to transform customers into connoisseursAllows for accessible informationestablishes ties between consumers and a brand, and enhances persuasionInternet = Communication = More Informed Buyer

  • Threats & Opportunitiese-Commerce/NEONeeds considerable local adaptationretailing is still very localizedInformality, community spirit, openness similar to flea marketposition between mass advertising and personalization is a real challengeLacks necessary quality of attention to detailImpersonal communicationAllows companies to build long run relationships with customersconverging possibility between internet user profiles and the luxury consumer

  • Economic Globalization & OutsourcingUnconventional approaches to managing a multinational businessManage business in various countries as a single systemInternational acquisitionsLVHM U.S. fragrances and cosmeticsLess dependent on outsourcing or licensingmove production capacity to ChinaEmerging markets equal to 7% to 9%Asian markets constitute 7% of global salesSales in Japan equals 38% of the industry

  • Threats & OpportunitiesEconomic Globalization/OutsourcingOutsourcing labor has perception of cheaper productsRising costs deteriorated marginsvalue-added taxes driving Chinese prices up 30%high acquisition costsMaintaining image and reputationThreat of substitutes



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