1. Country specific advantages are the advantages which can be captured by any producer in that particular country. For LVMH, which is originated from France, can benefit from some privileges of France:
Country of Origin: ¡§Made in France¡¨ represents classics and quality so that people are loyal to the luxurious products manufactured in France. France is also a leading luxurious market worldwide which brings France reputation on high-end product.
Good supply: Excellent and the best textiles, leather or even grapes are possessed by France or maybe its neighboring countries (for example, Italy). Those are important raw materials of LVMH¡¦s major products like leather for briefcase, grapes for champagne, etc. In addition to the tangible…show more content… Penetration to different market: Different sub-brands should be based at different countries so that the vision of the individual brands will be more adaptive to each location and enjoy the particular specific advantages so as to increase efficiency.
5. Counterfeit products dilute the market share and harm the brand integrity of LVMH, especially in the business area of fashion and leather. The factories and merchants in Asia are growing more sophisticated in counterfeiting, enabling them to penetrate and export many of their products and worldwide. In order to cripple the rampant counterfeiting industry, the primary step for LVMH is to communicate with Asian government (especially PRC government), and to seek legal assistance of local customs authority to clear away the distributions of the counterfeiting products. However, this may not be effective as WTO has recently asked China to impose laws to monitor the condition, but no remarkable and effective result is drawn since then. The company should further contract the distribution channels to reduce the chance for the counterfeiting parties to reach the raw materials of LVMH¡¦s products. In addition to exclusive retail stores, it is important for LVMH to limit the use of vendors and suppliers; or else, LVMH could integrate the distribution channels vertically by acquiring the suppliers companies directly. This should be able to reduce the