3. Background
● In 1948, Jean Cassegrain turned a Partisan tobacco
shop into a shop that sold tobacco pipes with the
finest exotic leathers
● By the 1960’s Longchamp products were sold in
more than 100 countries
● In 1972, Philippe took leadership in growing the
business, Sophie Delafontaine and Olivier
Cassegrain later joined the business
● In the 2000’s, Cassegrain brought in outside
expertise to expand the business
4. Longchamp SWOT
Strengths
● Family operation
● Craftsmanship expertise
● Timeless designs
● Available in 100 countries
● Le Pliage
Weaknesses
● Not much focus on marketing
● Customer service
● Brand image confusion (high luxury
versus accessible luxury)
● No clear positioning strategy, current
and future
Opportunities
● New product category: “optimistic
luxury”
● E-commerce
● International expansion
● Product line expansion
Threats
● Available in many locations - sales
dont always cover rent/expenses
● Oversaturation of market
5. Competitive Advantage
Why has Le Pliage been so successful?
○ Stylishness
○ Timelessness
○ Luxury
○ Quality
○ Discretion
○ Whimsy
○ Elegance
6. Louis Vuitton SWOT
Strengths
● Long history with a strong brand
● High level of craftsmanship
● Largest luxury brand with exclusivity
Weaknesses
● Luxury pricing
● Limited target audience
Opportunities
● Growing luxury market
● Continuous innovation
Threats
● Counterfeiting
● Animal rights issues (materials used)
7. Michael Kors SWOT
Strengths
● Celebrities featured Michael Kors on
red carpets
● High brand recall
● 30 years in the industry
● Well-known brand in US and other
developed cities
Weaknesses
● Affected by recession and economic
downturns
● Geographic presence is not globally
known
Opportunities
● High brand salience
● Positive affirmation has influenced
demand in domestic market
Threats
● Competition with more variety
● Many cheaper alternatives in the
market
8. Coach, Inc SWOT
Strengths
● Artistic craftsmanship of leather
● Modern designs
● Very well established brand image
● Multiple Channel and geographical
coverage
● Innovation, Relevance, & Value
Weaknesses
● Spread across many different
segments - low inventory turnover
● Unable to tap the growing economies
with huge potential
Opportunities
● Increasing online sales globally
● New and improved marketing
initiatives
Threats
● Counterfeiting
● Large amount of competition in the
luxury goods segment
9. External Analysis
Supplier power
Switching Costs
Cost Impacts of Change
Buyer power
Alternative Brands
Buyer Price Sensitivity
Reduction in Quality
Barriers to entry
Existing Brands
Access
Capital Requirement
Threat of substitutes
Competitor Prices
Product Substitutes
Industry Rivalry
Innovation
Level of Advertising
11. LongChamp
Financials
What We Know:
● Private, family-owned company
● Decision making more internal, not
influenced by stockholders
● 495M € company. Much smaller than
public competitors.
● Healthy growth rate (13%, on average),
very consistent. Revenue can be very
volatile in the industry, so this is a
strength.
12. Managing Le
Pliage’s
Mythical Status
● Continue to be innovative
● Le Pliage is a “white page” You can
redesign it with new colors and
designs that will always make it
relevant
● Continue to maintain its status in
both the affordable and luxury
markets
○ Also, create products that fall in
between
13. Recommendations
Customization
● $145-$640 gap between the Le Pliage
Nylon and the Le Pliage Cuir
○ Lessen the price gap through
customization
● Current customization option is
limited
○ Allow customers choose designs
& accessories
○ Option to mix-and-match
various fabrics
● The more extensive the design, the
higher the price
● Use patterns and prints that are
offered in limited time only
collections as customization option
14. Recommendations Men’s Line:
● Introduce a men’s line of
LongChamp accessories that would
access a new market
● Leather-banded watches, wallets,
shoes, and sunglasses
● U.S. market for sunglasses and
watches totals over $5 billion. Even a
small market share could prove
profitable
● New market segment, while
improving brand awareness and
perception
15. Recommendations Customer Service
● Restructure LongChamp stores to
look more appealing and luxurious
● Selling an experience along with a
product
○ If company’s desire is to be seen
as more luxurious, they cannot
only focus on the product
quality, but also service quality
16. Alternatives
● Create a new bag priced in-
between Le Pliage and Le Pliage
Cuir
● Separate Le Pliage from the
LongChamp brand
● Fragrance line
17. Implementation Customization:
● Similar to MiAdidas customization
options, LongChamp could allow users
to customize each aspect of the bag at
an increased price.
● Partner with high-profile designers like
Jeremy Scott to release limited edition
designs, that would also sell at a higher
price point.
● Increase profit margins and change the
way people view the Le Pliage.
18. Implementation Mens Line:
● Redesign website to include men’s
sections.
● Test marketing in select retail
stores. Hire salespeople with
experience in men’s fashion to
assist male customers.
● First test market in France.
19. Implementation Customer Experience:
● Improve Customer Service:
Employee training program. For
Current and new employees.
● Change store design: Include more
seating for trying on apparel. Hire
an interior designer to perpetuate
luxury status.
● Improve after sales support:
Warranties. Follow-up phone calls
and emails with customers.
Customer experience surveys.
Jean created the name “Longchamp” from his love for horseracing and the Paristian racecourse Longchamp
As the Longchamp business was 100% family owned, it managed to achieve a compound annual growth rate (CAGR) of 13% over the past 15 years.
3. How strong is Longchamp’s current value proposition in the marketplace? What do you think of its aspiration to change its position to move the brand up market and away from accessible luxury brands? Is this a wise move? Does the company have what it takes to do so? What defines a high luxury brand?
What makes Le Pliage so successful?
It's a well rounded brand
Appeals to lots of different sets of values
How?
Style: fits into different segments/different people with different styles can get something out of a le pliage bag
Timelessness: The brand was developed in mid 1900s and its still a fashion option today/competing with modern popular brands
Luxury: Perception that higher prices equal higher status gives the brand an air of luxury
Discretion:
Whimsy:
Elegance:
Quality**: The bags last well and are a good bang for your buck, especially since they’re so dang expensive
nicole
nicole
nicole
Supplier Power: If le pliage decides to differentiate themselves further by adding more features, suppliers can charge more; if there are few suppliers that can carry out the plans for longchamp’s bags, it limits the creativity or even financial decisions
Buyer Power: Alt. Brands - if there are more brands people can switch to, Longchamp will lose value, Buyer price sensitivity - if the le pliage bags become too expensive customers could leave/if the prices are lower, customers may increase consumption; If quality was ever unsatisfactory to customers, they may switch to a different brand; there is a high investment necessary to enter the market on the level of luxury to compete with longchamp
Barriers to entry: Describes level of threat to new entrants--longchamp is a successful biz in the industry and doesn’t want newer brands to come in and take market share -- new entrants have to face: Loyalty to established brands: just like longchamp has to take into consideration the competitors, new entrants have to be weary of the businesses already in the market; Access to supplier and distribution channels - if new companies don’t have access to the resources needed to buy and sell factors of production, they can’t be expected to sell products;
Threat of Subs: as consumers im sure we all know there is a price point at which you would consider switching brands even if you are loyal to a certain brand; There are several other brands not only in the luxury dept. That sell bags -- some brands may make a knockoff version of le pliage so they need to take into account what other retailers may be taking sales away from longchamp;
Industry Rivalry:
Things to note on Financials:
Each of these competitiors are multi-billion dollar organizations
