Lvmh Swot Analysis & Swot for Fcuk
1) Strategic Position: They only have brands for the luxurious sector, they keep doing what they know. They do not venture out into brands that do not go under their aesthetic (They have “Star” Brands). Under the LVMH parent brand are strong brands, who can make their own decisions. They keep their brands separate from the LVMH. Value proposition: The drive for quality and high standard. Always up-to-date, expand brand online (nowness).
Only group that has all luxury categories (but are cars not luxury? ). Profit proposition: They are at a leader position, therefore resources and collaborations are easy to achieve.
Continuous growth because of strong brands, large geographic balance, 32% market share in Asia (excl. Japan) & 28% in Europe (incl. France), 18% market share in the US.
High People proposition: They have talented and creative members throughout, from boardmembers, designers, marketing team, logistics. The founder Bernard Arnault, has a stabile and well known position in brand, and owns the most shares. They focus on quality and good product, the same goes for their staff.
2) Luxury brands, like LVMH, are usually less affected by e. g.
he recession, as the mass are less sensitive to price changes. Competitors: Gucci Group & Richemont * Star brands: LVMH (68), Richemont (20), Gucci Group (16) * Global distribution: LVMH, Richemont, Gucci Group * Diversification of products: LVMH (5 categories), Richemont (3 categories), Gucci Group (5 categories).
Low
3) SWOT ANALYSIS * Strengths: large portfolio in different categories, distributed globally, leader brands, good reputation = accessible resources, image consistency, leadership in the market. Suppliers are within the company.
Weaknesses: the idea of luxurious craftsmanship is not entirely true (they do not make the bags by hand, classic speedy bag is not real leather! ). * Threats: economical environment, cheap copies effect image. * Opportunities: Cars, boutiques & hotel categories. Emerging market (Latin America, Asia). Merges & Acquisitions, they can always acquire more brands.
4) Keep the focus on luxury, do not grow into the wrong markets.
5) At some point, the market might get saturated, and the strategy might need to change – not just grown the market, but ‘steal’ market shares from other companies.
French Connection
1) Since 2004 they had problems with image and losses in sales/profits. Their first slogan; “To create well designed stylish clothing that appealed to a broad market”, “Quality & Affordability”, they were trying to be everything, over promising to customers and under delivering. It is important to review the strategy to segment your customers, and determine which to reach and how to properly.
2) a. Market environment: Economic: They want to be a premium brands, but the pricing and quality of the product are not cohesive.
Because of the economy environment, the market is favouring quality over quantity – so they will not buy FC. Social: Management team should focus on the sales and profit, instead of the marketing campaigns that don’t relate to their product. Technological: They say that Toast is performing strongly, so they need to optimize that brand. Legislation: Optimize on their SEARS partnership (as a result of ? 2.
7 million increase) and gain more licensing. b. Threat of new entrants: the entry barriers are low in the high street industry, as well as mass produced, with new brands rapidly developing.
French Connection will already have distribution channels, good relationship with their suppliers, known by their customers, Power of the suppliers: Low cost & high volume, there needs to be a balance, so that they both benefit. Power of the buyers: Buyers are becoming more demanding, they want to pay less and better quality. Switching brands is easy, because there is so much choice.
FC do not have a strong brand image & presence, that would usually bring in loyal customers and regular ones as well.
The threat of substitutes: Online presences substitute for retail spaces. Other brands are using other forms of advertisement (such as films) for competitive advantage, as a lot of virtual mediums are substituting published advertisement. Rivalry among existing competitors: Other brands introducing new product categories, service improvement (f. ex. Topshop introduce hairdresser, nail bar, etc), customer loyalty through social media, promotional marketing (It seems other high street brands are utilizing this more than FC).
FC need to redefine the customer group, advertisement does not match the age group and the product in store. It seems FC product is older, and advertisement is young. c. Reiss Zara Topshop Low Benetton FCUK Low High Conclusion: They need to know their target market better (and make it coherent with the marketing, product and service). Highlight their strengths, or at least find out what that is.
Focus on sales and a stronger brand image. FC cut costs in stores, staff. Perhaps just focus on one market for now, and not expand.
