Lv Value Chain Analysis

costly. LV needs to make sure it protects its suppliers and all of the talent it currently has for healthy growth in the future.

Internal Analysis

Value Chain

Value Chain is set of activities that a company does in order to deliver the product or service for the market. It was firstly conceived my Michael Porter in 1979. It can be divided into the Primary and Support activities.

Main attribute of value chain for fashion brands like LV is the design of the products. Every single designer has their own style of work. But usually steps are as follows: designer makes a sketch, gets a more detailed working pattern and finally chooses from the available materials for the cloth (Chuong, 2013).

The designed clothes then go to the fashion shows,

It stands for Value, Rarity, Inimitability and Non-substitutability (Barney, 1991).

LV’s resources are highly valued. As it is in luxury business, pretty much everything is expensive. Consumers want to differ from those that don’t have as much money. So pretty much every single resource identified above, can be regarded as valuable. The only non valuable resource LV has is the transporting of its goods, which is why LVMH is conducting transportation of all of its brands together.

The same thing can be said about rarity. The high-skilled workers that LV has are very rare. It is extremely important for the company to keep hold of them. The same can be said about some of the supplies on offer. So the contacts that LV as a brand has give it the competitive advantage for getting the necessary goods.

Inimitability mainly concerns the designers. Although, LV products often get counterfeited, the quality of those goods is obviously nowhere near what LV has to offer. In general, trademark rules defend LV from being imitated, but these days fashion trends are very important to follow, if LV was to put out an original concept that had some success, competitors would be likely to follow the same trend. Even though the goods wouldn’t be exactly the same (as that would be illegal), it could still be seen as an imitation of some

It offers 3 main strategies for companies to pursue: Differentiation, Cost Leadership and Focus, it suggests that if the company tries to follow all 3 at once it won’t succeed.

Luxury brand customers demand differentiated products, they want to feel unique and be distinguishable from others, which is why pretty much every single luxury fashion brand has to follow the differentiation strategy. LV does it by having unique designers and suppliers that offer the highest quality products possible. Since luxury customers are prepared to pay premium, cost leadership strategy would be unwise and could lead to major revenue loss.

LV gained its market share at the start by focusing on geometrically stackable mallets. Now that it is a global brand, it does not seem to be focusing on any particular niche product, rather it has differentiated into several markets and the main goal seems to be the continual of the trend.

Issues and Challenges Facing the