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Louis Vuitton Case Analysis

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Early signs of trouble Reviewing the company’s performance in 2010 and 2011, although it gained handsome profits, there are obvious some early signs of trouble which are needed to be emphasized. The financial turmoil in Europe, together with changes in consumer buying behavior, leads to an unfavorable situation for Louis Vuitton. Also, too much reliance on automated manufacturing process might dilute brand image. The spread of the counterfeited products can also undermine the brand value.  Weakening demand in Europe market Although the largest luxury goods market is in Europe, which constituted 37% shares of the total luxury market in 2011, the demand has decreased due to recession. The estimated growth rate in Europe in 2012 is about 3%. The slowing down of the economy has caused great impact on the luxury market. Also, to reduce the price differences, the company strictly controls on pricing for each sales regions. For instance, the company increased prices in Europe by …show more content…

Although the growth rate in Europe is lower than other regions, it is important to maintain the quality of products and services. In addition, LV can put emphasis on Asia-Pacific market as this market has the highest growth rate, which is about 10%. The fastest growing region is in Great China, where its sales have grown by almost 30% (Pearce& Robinson, 2013). Since the company does not have its online shops in China, it can expand the market by selling products through online channels. In this way, LV may offset the decline of growth rate in Europe by increasing purchases from China. Also, in China, there is one unique characteristic of the market. The youth in China has strong motivations towards luxury (Ngai &Cho, 2012). Therefore, when considering the market, the company can consider the differences existing in the generation in order to target the market

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