Analyzing LVMH Essay

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INBS 349-02 November 11, 2013 Case Studies (2) Starbucks 1. In the United States, about two-thirds of Starbucks outlets are company owned; the remaining one-third are operated by licensees. Outside the United States, the proportions are reversed: about two-thirds are run by licensees or partnerships in which Starbucks has equity stakes. What is the explanation for the two different market expansion strategies? When conducting business abroad, multi-national companies can use different market expansion strategies. The strategy of licensing is a contractual agreement where company A (the licensor) makes a legally protected asset available to company B (the licensee) in exchange for some form of compensation. Companies typically…show more content…
However, the brands positioning is typically affected by the current economic situation. Although Smarts sales were said to have come to a screeching halt in 2011, the fluctuation of gas prices provoked a spike in 2012’s sales--the company surpassed its 100,000 unit milestone by selling 103,738 automobiles worldwide. 2. Assess the U.S market potential for the Smart. Do you think the car will be a success? Why or why not? The current state of the U.S market shows an increase of sales for the Smart brand. Because of the current economic climate, consumers are interested in saving money in every way possible. Smart offers vehicles ranging from $12,000-$24,000, making them affordable to the majority of the “eco-friendly” market. With these factors considered, one can conclude that there is market potential for Smart in the U.S. In order to achieve the greatest success, they should consider revisiting the original design of the vehicle to make it look less like a “backpack on wheels.” Americans tend to associate social stature with the type of vehicle you drive. Also, the fact that the vehicle can only go 80 mph may force some potential customers to lose interest. 3. How does the Smart compare to the Honda Element, Toyota Scion, or Kia Soul? Are these models targeting the same consumers as the Smart? In view of Japanese carmakers success with these brands, do

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