Essay on Lvmh Equity Valuation

2010 Words Sep 28th, 2013 9 Pages
Gucci Group N.V.
Case Brief
Group: Synergy

BI4242 Global Strategic Management
Section 404
Submitted to A. Pattana Boonchoo
November 25, 2005

The mission of the company is to be a successfully managed multi-brand group in the fashion industry, producing luxury products that will be enjoyed by affluent, style-conscious consumers.
Internal analysis:
Performances: After the new CEO get on the stage, the company starts increase its revenue. Now the company use acquisition strategy to growth. And now they already acquire 2 companies YSL and Sergio Rossi.
Current strategies: At the corporate level, the company operates in two directions, which is vertical and horizontal. Horizontally, the company purchased
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However, it has to also realize that just because it has a significant brand; it is not enough to retain customers. Customers now like to switch between brands just for the sake of it. Thus the company has to focus on areas where the risk is high, such as threat of substitute products, threat of competitive rivalry, and the threat of the barrier to exit.
Integration of major strategic issues: (See appendix 2 for detailed analysis of SWOT) The main strength that Gucci possesses is their creativity in establishing their business, no matter in the case of the design of clothing or their brand image and their management. Their main weakness is their lack of multi-brand experience. They have to adjust their management styles to fit the changes in the corporation. The opportunity they should seize is how to better use the internet as a tool. Maybe they don’t have to sell their products on line, but it is definitely suggested to create a stronger presence of the brand “Gucci” on the internet. The main threat now can come from two aspects: consumers are much less loyal to one brand than before, and that many counterfeit products can be bought in many places, causing not only a loss of sales but also corrupting the brand name.
Critical issues:
CI1: exclusive competition of market for example, LVMH and PRADA. 35 companies shared 60% of the luxury goods market. From the revenue excess 1 billion, LVHM topped the first.

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