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Louis Vuitton environmental analysis

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Louis Vuitton environmental analysis

  1. 1. Page 1 An Environmental Analysis for Louis Vuitton Gilberto Pena Full Sail University Project & Portfolio II: Business and Marketing 10/13/2019
  2. 2. Page 2 The STEEPLE Analysis PROVIDE at least one observation for each of the seven elements of the STEEPLE analysis (you can make more). These should be full paragraphs that include explanation and detail. These observations should also help you to make statements that go in the SWOT chart, below. Remember to put a “short form” citation in APA format after each observation here and list the corresponding APA “long form” reference in the Reference section at the end. Keep the focus on the division/brand. You may observe something that affects the parent company or the industry, and which will affect the division/brand, too. It’s okay to include those observations, but always remember it’s the division/brand you’re working for. Not the parent. SOCIOLOGICAL: The luxury buyers are shifting to a different direction that Louis Vuitton was not expecting. Logo- free pieces is shared by a growing number of wealthy shoppers, who prefer to search for unique, hard to find pieces instead of highly recognizable handbags from big recognizable brands such as Louis Vuitton. The inclination for more discreet luxury goods is also being moved by the political debate about income inequality, which is leaving some big spenders worried that it is very offensive to carry a purse that practically announces its four-figure price tag in times were income inequality is growing. As Louis Vuitton, is trying to boost their sales, luxury consumers are also spending their dollars into experiences rather than on goods. Things such as an extravagant island vacation or dinner at Michelin-star restaurant. (Halzack, S. 2015) TECHNOLOGICAL: Luxury is a synonym with Louis Vuitton and needs to serve like so. We live in a world where technology reflects purchasing power and exclusivity. In 2017 Louis Vuitton wanted to reflect their traveler’s heritage with the release of the Tambour Smart Watch and the Horizon Earphones because they travel with you. These accessories are equipped with Bluetooth technology. Created to take phone calls, listen to music, multitask and be alert without the look of popular Air pods. But with the exclusive design that Louis Vuitton grants. The traveler’s location is now synchronized with hot spots in more than seven capitals worlwide. (Wiliam, T. 2019) ECONOMIC: Despite a noisy year in global stock markets and trade tensions. There is only one branch of the world economy that came out of 2018 literally unscathed: the luxury goods sector. LVMH, the world’s largest luxury conglomerate, posted a record revenue of $53.4 billion, this was a 9% increase from 2017.18% of the sales, which are $9.6 billion, were net profits. Sales from Louis Vuitton alone reached $11.4 billion for the year. Spending on Louis Vuitton by Chinese consumers was a boost for the company. Domestically or on vacations, Chinese consumers double digits on spending in the fourth quarter of 2018. (Observer, 2019)
  3. 3. Page 3 ECOLOGICAL: Louis Vuitton is in the process of implementing a responsible sourcing program for all raw materials. In 2018, Louis Vuitton reached the LIFE 2020 target of 70% of leather goods tanneries becoming Leather Working Group certified. At the same time, the House’s jewelry activities have obtained the Responsible Jewelry Council certification, and diamonds are certified by Kimberley Process as conflict free. Louis Vuitton is finding new alternatives to raw materials that bring an equivalent or higher quality but with the goal of lowering environmental footprints. The LVMH Eco-Material Library is working on educating creative teams on the use of innovative and eco-friendly materials. one of Louis Vuitton strong commitments, is making sure these processes of cutting raw materials keep improving to limit waste in design and production. (Louis Vuitton, n.n.) POLITICAL: Louis Vuitton is just finishing their new factory in the U.S outside of Fort Worth, Texas. A large ranch just outside of Keene, about 28 miles south of downtown Fort Worth, has been purchased by Louis Vuitton for construction of a leather goods workshop to make luggage and purses. The factory is expected to be open by the end of 2019 and will employ up to 500 people. Louis Vuitton will receive a 45 percent property tax abatement in its first year and, once the company has 500 employees, it will receive a 75 percent abatement for 10 years. Vuitton's $1.1 million state grant will be used to improve roadways, according to this article. The Construction of the plant is expected to cost about $20 million. (Nix, M. 2019) LEGAL: In January 2016 LVMH lost for the first time in the District Court. Louis Vuitton filed formal claims for trademark dilution, violation of fair use, trademark infringement and copyright infringement, against My Other Bag. This brand introduces itself as an “eco-friendly canvas bag with a designer twist”. And its products price in a very low range from $28 - $55 compared to Louis Vuitton. The article states: “obvious differences in My Other Bag’s mimicking of Louis Vuitton’s mark, the lack of market proximity between the products at issue, and minimal, unconvincing evidence of consumer confusion compel a judgment in favor of My Other Bag on Louis Vuitton’s trademark infringement claim.” (Forbes, 2016) ETHICAL: Louis Vuitton views protecting the environment as not simply an obligation, but as source of competitiveness. Vuitton's success over the years has depended directly on preserving and respecting the natural resources they use to make their products. Taking environmental factors into account in their production processes makes their products more reliable and appealing for consumers. As well as setting the example for their competitors. Louis Vuitton social responsibility is based in the principle of respect for people and their individuality. The brand is committed to making excellence a tool to show their social and professional commitments in solidarity with their host regions and communities. (Louis Vuitton, n.n.)
  4. 4. Page 4 The SWOT Analysis Provide at least three statements in each of the four sections of the SWOT chart: Strengths, Weaknesses, Opportunities and Threats. Include explanations and details within the chart that make your points clear. A phrase is not enough. Each point should be a short paragraph. HELPFUL HARMFUL INTERNAL STRENGTHS 1. Strong brand with global presence: Vuitton’s logo and monogram canvas are worldwide recognizable. The company is named as the world’s most valuable luxury brand for consecutive years since 2016 to 2018. 2. Exclusive products: Vuitton’s products are highly priced due to their excellent quality and by the high level of exclusivity. It works with the best designers in the industry to deliver unique and scarce products. 3. Solid financial performance: LVMH, the world’s largest luxury conglomerate, posted a record revenue of $53.4 billion, this was a 9% increase from 2017.18% of the sales, which are $9.6 billion, were net profits. Sales from Louis Vuitton alone reached $11.4 billion for the year. (Nix, M. 2019) WEAKNESSES 1. Reduced customer market: Louis Vuitton target market is very limited due to the fact that customers consist mainly of the elite and high-income class who want to be distinctive from others, to have that exclusivity status. In other words, the wealthy 1% of the population is their only client. 2. Centralized decision making: Even though Louis Vuitton is the only brand spending more than average in research and development within the industry, decisions by teams need to be approved by certain officials. This reduces the efficiency in operations by making them more time consuming. It also leads to reduced innovation. 3. Brand relies on a strong economy: Based on its unique target market, Vuitton’s sales rely on a strong economy for consumers to have purchasing power. If the economy is depressed, the sales growth slows down sharply.
  5. 5. Page 5 EXTERNAL OPPORTUNITIES 1. New digital era: Exploring the digital media space for brand advertising. There is an opportunity for Louis Vuitton to expand their presence online; by using the internet to interact with its customers. Louis Vuitton can use social media to promote its products, connect with customers and collect feedback from them to monetize those connections. 2. Environmental policies: Now that the world is very concerned for our environment searching for new ways to protect it. It is a great opportunity for Louis Vuitton to invest in new technologies that can help reduce pollution in the making processes of a product or perhaps to develop a textile to avoid using animal furs and preserve the species. 3. Reducing cost of marketing in international markets: A new electronic commerce business model can help Louis Vuitton to reduce the cost of entering new market and reaching to customers at a significantly lower marketing budget thanks to social media. For example: fashion shows. Vuittion can use media to show their upcoming collection around the world without spending all the money on shows were the audience is very limited and can only assist by invitation. THREATS 1. Trends: The luxury buyers are changing their taste to luxury brands such as Louis Vuitton to other companies, which offer more selective products and hard to find pieces, that grants a more exclusive product. Rather than spending on product that is identified worldwide by its logo and monogram canvas. 2. Target Market: Vuitton’s target market relies on the high-income class between 35-60 years old. However, every year its customers are younger people. Vuitton needs to adapt before it affects their business model in a matter of time. 3. Regulations: Increasing costs for working in developed market because of environmental regulations Louis Vuitton has to deal with these costs as governments are trying to increase environmental taxes to promote cleaner options. This may result into higher logistics costs and higher packaging costs for the brand.
  6. 6. Page 6 Conclusions: Findings lead to Conclusions. In two or three well-developed paragraphs, provide conclusions for the company based on your analysis of the findings. This means talking about the meaning of your findings. For instance, is there growing negative feedback from customers based on perceived changes to quality? Then it would be fair to say that the brand probably has a public relations crisis looming in the near future. Try to assess the fit of the current market position for your product. How does it compare to its competitors and its industry as a whole? Where does it excel? Where can it improve? How does the company’s financial health factor into what it can and can’t do? With this exercise, you should begin to identify what questions your client hired you to answer. Note what should be new goals and actions for the future. Note whether there should be any changes to product/service line, target market or message. You will elaborate in Week 4 when you make specific, future oriented and actionable recommendations for your company. Louis Vuitton has many strengths that will help them continue to be a reference in the fashion industry. The quality of their products can be recognized like no other brand because they implement different materials and technology in their products that are only offered by Louis Vuitton. The brand works with the most iconic designers to deliver unique products every season for different markets around the world. Louis Vuitton differs from competitors by using high quality raw materials in all of its products, the company has an empowering position to observe its products quality by marketing them through its own stores all over the world. Also, there is no other brand that has been named as the world’s most valuable luxury brand for four consecutive years since 2016. And the 12th most valuable brand in the world. (Forbes, 2019) Louis Vuitton is yet to face some challenges that could be a problem along the way such as shifts in the luxury consumers trends, shifts in target market and new environmental policies. Luxury consumers are always on the hunt for exclusive products. As long as companies like Louis Vuitton do not lose their essence, stay loyal to their heritage and finds new ways to use storytelling to connect with clients, people are likely going to buy it. Because Louis Vuitton has the strongest brand presence in the world and their logo a synonym of exclusivity. (Halzack, S. 2015) Various companies such as Chanel or Gucci keep growing and innovating year by year. Vuitton needs to continue to use data gathered from consumers as a tool to keep developing new products that appeal the client’s concepts of what luxury really means. In order to continue to be a dominant luxury brand. This can be done by better marketing of their products so people will connect better with the brand. Overall, Vuitton shall continue to be the brand that rich and famous will always recognize as a luxury icon.
  7. 7. Page 7 References: In APA format, list each reference you used (at least five). Each reference in this section should have a corresponding “short form” citation in the STEEPLE section or the Conclusions section. Halzack, S. (2015, June 16). Why Louis Vuitton, Gucci and Prada are in trouble. Retrieved October 10, 2019, from https://www.chicagotribune.com/business/ct-why-louis-vuitton- gucci-prada-are-in-trouble-20150615-story.html. Cao, S. (2019, January 31). Amid a Tumultuous 2018, Shoppers Sought Escape By Splurging on Louis Vuitton. Retrieved October 11, 2019, from https://observer.com/2019/01/louis-vuitton- lvmh-profits-surge-despite-us-china-fears/. Teh Sen, W.-L. T. S. (2019, April 8). How Louis Vuitton is slowly blending luxury fashion with technology. Retrieved October 11, 2019, from https://www.lifestyleasia.com/kl/gear/tech/louis-vuitton-slowly-blending-luxury-fashion- technology/ Nix, M. (2019, October 11). Trump's visit to Texas will include stop at Louis Vuitton workshop in Johnson County, Fort Worth fundraiser. Retrieved October 11, 2019, from https://www.dallasnews.com/news/politics/2019/10/10/trumps-visit-to-texas-next-week- will-include-stop-at-louis-vuitton-plant-in-johnson-county/. Eytan, D. (2017, January 3). Louis Vuitton Loses Lawsuit (Again) Filed Over Allegations of Trademark Infringement. Retrieved October 11, 2019, from https://www.forbes.com/sites/declaneytan/2016/12/31/louis-vuitton-loses-lawsuit-again- filed-over-allegations-of-trademark-infringement/#447c28f120e1. Vuitton, L. (1n.d.). News By Louis Vuitton: LOUIS VUITTON REINFORCES ITS COMMITMENT TO THE ENVIRONMENT . Retrieved October 11, 2019, from https://eu.louisvuitton.com/eng-e1/articles/louis-vuitton- reinforces-its-commitment-to-the-environment. Louis Vuitton on the Forbes World's Most Valuable Brands List. (2019, May). Retrieved October 11, 2019, from https://www.forbes.com/companies/louis-vuitton/#7dd782f06dbe.

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