This document discusses LVMH's expansion into China and strategies for overcoming threats from counterfeits. It notes that China represents a large luxury goods market and LVMH was an early entrant, giving it an advantage. However, overuse of logos hurt its luxury image. The document recommends focusing on customization, quality service through exclusive boutiques, and expanding to less developed Chinese cities and new product lines. It also suggests opportunities exist in Japan due to its respect for intellectual property laws and preference for authentic luxury goods.

1. “Building Empire of
Desire in China” LVMH
Angelica Joyce T. Jacalne
BA 190 - Strategic Management
University of the Philippines
Prof. Mita Angela M. Dimalanta

2. • Formed in 1987 through a merger of
two fashion houses: Louis Vuitton
and Moët Henessy
Flagship Brand

3. MISSION
“The mission of the LVMH group is to represent
the most refined qualities of Western “Art de
Vivre” around the world.
LVMH must continue to be synonymous with
both elegance and creativity. Our products, and
the cultural values they embody, blend tradition
and innovation, and kindle dream and fantasy.”
Serves as the
“vision” of
LVMH
Commonly
associated with
“Luxury”

4. Why is LMVH so successful in
China?
LUCK
= Preparation + Opportunity
At the Right Place and the Right
Time
Luxury Brand
Chinese
people love
Luxury
Goods; China
is the world’s
biggest
luxury market

5. • China market for Luxury goods is very
advantageous for LVMH since Chinese love
luxury goods like Louis Vuitton.
• LVMH expanded in China where the Chinese
population who love luxury goods is growing.
• Only a few competitors were present when
LVMH expanded to China, thus LVMH had the
first-mover advantage of luxury brands in China
• Region expansion, not country expansion,
made LVMH more flexible and allowed LVMH
more options on how and when to expand

6. Issues on handbags and accessories
displaying and not displaying Louis Vuitton logo

7. • LVMH is a luxury company and works on
uniqueness (as stated in their mission).
Implications of issues on handbags and accessories
displaying and not displaying the Louis Vuitton logo
• LVMH is no longer viewed as “one-of-a-kind” since
there are a lot of products showing their logo.
• LVMH’s status as a luxury brand dropped and
became a common brand for Chinese due to its
identical and constant designs of their products.
• LVMH’s status as a luxury brand may be sustained
when they used their logo as an accent and not as
the pattern or main design of their products – it
projected class and elegance, which further
promoted uniqueness.

8. How can LVMH use its strengths to
overcome threats from counterfeits?
China has lack of
enforcement in
protecting
Intellectual
Property Their products are
easy to imitate and
reproduce

9. How can LVMH use its strengths to
overcome threats from counterfeits?
Focus on custom
made-to-order
designs
Capitalize on
Quality
SERVICES
(especially on
the “Maison”
invite-only
boutiques

10. Given the backlash in China against
Conspicuous Consumption, what
recommendations can you give to LVMH?
Focus on
expanding in
second and
third tier cities
where people
still crave luxury
goods
Capitalize on
the uniqueness
of LVMH’s
products
Focus on the
customization
of products
Diversify the
Product Lines
and Mixes

11. More for more
strategy (building on
the “brand”)
Offer products in China
that are not offered in
other Louis Vuitton
international branches
Improve and Develop
the idea of “Maison”
with
invitation only floors
Capitalize on Quality
Service
Create limited edition bags
(ex. A bag that has only 6
stocks avalaible)

12. • 85% of women in
Japan own a Louis
Vuitton product
• Japan’s Intellectual
Property laws are
properly implemented
• Japanese culture hates
fakes or counterfeits
• Japanese people
encourages ownership
of original branded
products
EXPAND
TO
JAPAN
Reference : Rothermael, F. (2015). Strategic Management. McGraw-Hill Education, New York