Louis Vuitton Moët Hennessy

louis vuitton moët hennessy, usually abbreviated to LVMH, is currently the world leader in the luxury market, which was emphasized by the recorded profit in 2006 implying the best performance of the company in their history. This was acknowledged by the present CEO of the group, Bernard Arnault, who stated that the excellent performance in 2006 illustrates the vitality of the major brands of the company, which continue to strengthen and gain market share (Finanznachrichten.com, 2007). As mentioned in his speech, LVMH consists of various autonomously run sub-companies, composed of distinct brands. In 1987, the conglomerate was established through consolidating Moet et Chandon, hennessy and louis vuitton, three producing and designing companies of the luxury products champagner, cognac and fashion respectively. However, being located in the exclusive luxury market brings several opportunities as well as complications. Offering exclusive and therefore expensive products creates one major limitation in this industry, the counterfeit of products. How the company decided to deal with this problem by going through the various steps of strategy formation is an interesting topic worthwhile a discussion. A further arising issue to the conglomerate is the environment through further regulations and increasing responsibility recognized by the LVMH itself. The paradox of strategic change, whether a company tackles concerns revolutionary or evolutionary, applied to this issue also seems to be of absorbing nature. Additionally, in order to analyse the industry of the company a analysis of the five forces of Porter's model seem to be an adequate tool.
The paper will cover the following mentioned points. An introduction of the strategy of the LVMH group will be given. After evaluating the performance of the company over the period of 2005 until today a depth discussion about the strategic formation with respect to counterfeit will be addressed. The paradox of strategic change, mentioned above, will be applied. Following, the third point, being an analysis of the industry will be provided through the application of Porters five forces to this case. Recommendations on how to improve and sustain the performance of the company will be provided in accordance to the issues highlighted beforehand. In order to clarify the implications of the arguments and mentioned matters a conclusion will bring these together and summarize the outcomes.