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Decision Making Essay

3944 words - 16 pages

Table of Contents
Part A: NON-FINANCIAL PLAN 2
1.0 Introduction 2
2.0 Social and Demographic Trends 2
3.0 Counterfeit Issues 3
4.0 Competition 5
5.0 Marketing 7
6.0 Environmental issues 10
Conclusion 12
Part B: FINANCIAL PLAN 12
Plan 1 12
Plan 2 15
References: 16

Part A: NON-FINANCIAL PLAN
1.0 Introduction
Louis Vuitton Company, founded in 1854, is one of the most well-known producers of luxury goods in the world and is famous for creating high quality leather accessories and travel trunks (Nagasawa, 2008). The company is primarily known for its beige monogram LV that appears on a chestnut background of all of its products (watches, sunglasses, jewelry, etc).
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Such measure would allow the brand to correctly identify the needs of the target market(s) and ensure long term profitability.
Firstly, LV should consider designing products to satisfy the requirements of the women’s plus-size and men’s big and tall markets. Such measure is relevant because of the American’s increasing average weight and the fact that they represent one of the wealthiest societies in the world (Wagle, cited in Nguyen, 2004). Additionally, these two consumer groups have been identified as the fastest growing industry segments in most of the world’s economies.
Secondly, the rising demand for luxury products among younger generation of China, the world’s largest nation, requires LV to respond accordingly. For instance, LV can practice tailoring the designs of some of their products to the cultural needs in this emerging market. Such measure can greatly help in achieving long term profitability since no other nation has so many consumers clamouring for stuff. Hence, responding to these demographic/social trends can alleviate some of the issues for LV and lead to competitive advantage. In addition, the company could undertake some measures to respond to the rise of ageing population by providing products specifically for wealthy elders.
3.0 Counterfeit Issues
Counterfeit issues have plagued luxury brands including LV for years and the company spends enormous amount of resources to combat this problem. To solve this problem LV should undertake both practical and legal measures to combat the counterfeit issues in a systematic way.
Practical measures
Knowing your manufacturers refers to working only with trustworthy producers that take supportive actions and steps to secure LV’s manufacturing expertise and proprietary information (Anderson, 2012). In other words, LV should collaborate with manufacturers that are willing to protect the company’s manufacturing know-how to combat the counterfeiting issues over the long term by working solely with LV and nobody else.
Controlling the distribution chain implies LV should have a more centralised dispersion of the products. Such measure can limit the amount of fake goods being shipped and sold in multiple destinations. For instance, shipping products to distributors from one point or receiving them at one address can assist in detecting counterfeit products more effectively.
Investment in anti-counterfeiting technologies suggests LV should spend more resources on special fibres and holograms that allow distributors, customers and customs officials to ensure the authenticity of the products (Anderson, 2012). This can facilitate the reduction of counterfeiting in the global marketplace despite high cost. However, the benefits these technologies bring in combating counterfeiting far outweigh the costs of implementing them in the long term. Therefore, this measure along can potentially reduce the negative effect of fake goods on LVMH’s profits, brand image and sales volume.
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