Rivalry Industry: Louis Vuitton

Threat from New Entrants There are currently no new threats from new entrants in this market. Company G’s technology, testing and production process that is very efficient for profitability cannot be easily replicated.

In luxury marketing, there is a delicate relationship between 4 factors that most strongly influence the purchase of the luxury consumer. They are the exclusiveness of the brand, the reputation of the brand, forms of distribution and price/value affiliation. Exclusivity cannot always be ensured due to immense competition. But by consequence, it is not the key requirement of a luxury consumer. The consumer bases their

By 2002, Moet Hennessy Louis Vuitton was the world's largest luxury products company, enjoying annual sales of 12.2 billion euros. LVMH carries the most prestigious brand names in wine, champagne, fashion, jewelry, and perfume. Upon entrance of this luxury product industry, LVMH was aware that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, making consumers feel as though they must buy it, or else they will not be in the moment, and thus will be left behind.

The industry does not possess major threat from new entrants due to strong barriers to entry and strong competition for retail space. There is also a strong rivalry between competitors as limited space is being contested by major players alongside

Threat to new entrants: There is no barrier to entry in this industry but it might be difficult for newcomers to compete against existing well establishing companies.

The threat of new entrants is measured by the level of entry barriers, brand reputation and customer loyalty, potential for existing competitors to expand, growth of buyer demand,

An increasing economic interdependence of national economies across the world experiences a rapid cross-border movement of goods, service, technology and capital. Luxury goods industry, serve as one of the most competitive industry, emerging and developing rapidly all the time. To a great extent, globalization promotes the development of luxury goods industry significantly in spite of the big shock hit by several times of economic crisis.

To open a business in this industry requires a large amount of start-up capital and is quite difficult to acquire the needed inputs due to high prices. In addition, it is hard to get in contact with the suppliers and government agencies needed to successfully run the business. New entrants also face the challenge of attracting and retaining customers. The business is currently in the growing phase with multiple firms already pining for customer attention or have acquired a large pool of loyal customers. That being said the threat of new entry is low to this industry. Starting a new company is so difficult that it is unlikely that firms in this industry will pay new entrants much mind. More likely than not firms trying to enter the industry will not be seen much of a threat. However, it would be wise for those already active to be on their guard to make sure that they don’t underestimate their new competitions potential to outwit them.

In the luxury goods industry, the rapid development has brought the market more brands and the latest design products. Industry matures has caused the accelerated development of a wide range of luxury goods (Chiari, 2009). However, one thing was constant, no matter how much increased production costs, the large luxury brand of origin will not be transfer. Long cultural history is an integral part of the luxury brand, and the origin of products have also brought a certain cultural value for luxury goods (Heine, 2012).Especially for Asian consumers, it seems that in the far west, craft superb tailoring and rich cultural history of the western area are the pursue of Chinese consumers (Sombart, 2001).Louis Vuitton 's president has said that (2013), “when customers buy our products, they expect Western quality. The mystery of the origin of our brand is closely linked with our brand”. Although with the close of trade, many luxury goods in the production and sales process will cooperation with other country’s companies, the final product definitely launch in the country of origin. Gucci is a legendary brand in Florence (Italy), and it will also strictly control the production done in Tuscany (Italy), to ensure pure and high-quality products (Gucci, 2015). Therefore, a regional feature has brought an intangible value and more local cultural characteristics to the luxury goods.

Threat from New Entrants : Threats to company G success are possible. New companies may enter the market, looking to take advantage of producing a product to challenge Company G’s product. They may have access to lower cost distribution, which in term may offer their product at a lower cost. Startup is not that expensive, which may encourage new entrants.

At the apex of the market was haute couture with it very high-end “custom” product offering that catered to the extremely wealthy. Luxury goods manufacturers believed diffusion brand’s lower profit margins were offset by the opportunity for increased sales volume and the growing size of the accessible luxury market and protected margins on such products by sourcing production to low-wage countries. Eye-catching utilization of their products by prominent figures in society leads to increasing demands for luxury good items and it is a growing industry with the global luxury goods market growing 9% per year. These consumers buy their products for satisfaction and to boost their self-esteem rather than for ease or comfort. All these components blend in the context of a successful business of the luxury goods.

New Entrants – The threat of new entrants is moderate. Moderate because of the high cost of entry, but the relatively successful business model Best Buy has outlined.

A luxury brand may have profound influence on an overall product strategy since its position may determine how the company is going to make its next step. A luxury brand like Coach epitomizes elegance and combines classic beauty with modern design. According to John E. Gamble, not only has Coach become one of the most respected and known brand names in the ladies’ handbags and leather accessories luxury brand industry, it is also one of the most best-selling luxury brand companies in the world, with net sales reaching 2.1 billion in 2006 (Gamble). When a company like Coach decides to set up a product strategy for the next season, the

Luxury product sales boost in the emerging marketing like China, which has extraordinary growth and strong potential consumers for the development of luxury goods in the China market. With gradually lower and lower increase of revenue in the European countries, Louis Vuitton (abridged as LV in the following sections) commits itself to set up more stores in China. However, LV is faced with the problems of declining profits in China, which urges it to adjust its entry strategy into the China market. In this case, this report will focus on distinguishing the factors that influence LV’s development in China and

Louis Vuitton(LV) was est. in 1854 in France and is known as one of the oldest French luxury fashion houses. The brand became famous for its exclusive leather bags and trunks. Over the years the LV line expanded from leather goods to fashion, selective retailing; wines & spirits; perfumes & cosmetics; watches & jewellery making the brand one of the most luxurious brands worldwide.