The case discusses the key elements of corporate and business strategies used by LVMH. He first developed in the context of the luxury business, providing a comprehensive view of the performance of drivers, the major players and their strategies. Nestled into the landscape, he then examines the specific strategies adopted by major players LVMH. The company wants to double its current sales ($ 10 billion $ 80 billion industry) and profits in 2005. In going to this goal, LVMH entered into several business areas, ranging from leather goods to wines and spirits at art auctions. Many of these gains have come at steep premiums and none of them was arrived yet. Investors and analysts believe that the company should deprive some of its assets and the return to their roots in the leather goods and wines. Mr. Arnault, CEO of the company, however, believes that there are significant synergies that arise when working with a portfolio of brands across the landscape of luxury business. This forms the basis for a good estimate of its value chain and value-added activities, promised cooperation and their potential impact on revenues and profits. It also raises questions about how LVMH can grow in this business, which geographic region should invest, and what product market should be maintained.
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by Kannan Ramaswamy Source: Thunderbird School of Global Management 15 pages. Publication Date: June 17, 2003. Prod. #: TB0151-PDF-ENG
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