LVMH Moët Hennessy

scription of the company

LVMH Moët Hennessy, better known as LVMH, is a French multinational luxury goods conglomerate, it headquartered is located in Paris. The company was formed by the 1987 merger of fashion house Louis Vuitton with Moët Hennessy.

All began in 1987, when the two met Louis Vuitton and Moët Hennessy group. The formation of a single French group allows it to become the world leader in the luxury market, thanks to a policy of aggressive acquisitions. It’s Bernard Arnault who heads the group; he is a French businessman (Groupe Arnault owns 47.4 % of LVMH today). In total, 77,000 people work for the LVMH group, 2,423 stores are located in the world. LVMH achieved in 2009 a turnover of 17.053 billion euros and operating profit of € 3.161 billion and a net profit of € 1.973 billion. LVMH, a corporation is a member of the CAC 40 and its shares are listed on Euronext Paris.

Today, LVMH has more than 60 world-renowned brands, divided into five strategic business areas: Wine and Spirits – Fashion and leather goods – Perfumes and cosmetics – Watches and jewellery – Specialist retailing

I-External Environment Analysis

-PESTEL ANALYSIS:

Political factor:

- Political stability in the consumer’s countries for luxury goods

Economic factor:

-Free exchange with the European Union, also US and some countries in ASIA

-The global economy of France is out of recession and the inflation rate is low

- People in the European Union are ready to work for a cheaper price than before, especially after the economical crises. There is an availability of work force.

- Strong growth in emerging countries (China, India, Brazil, Russia), so an increase of the population with a high income

Social factor:

- Increasing demand in some countries (UAE, Quatar…)

-The religion can be issues in some countries; the brand can’t sell all of its product like wine and spirits, because it’s forbidden.

-People in western countries give much importance to the appearance and also in emerging countries because it is a sign of wealth

- People give more and more importance to their looks

Technological factor:

- New machines raise the production efficiency through the quantity and precision (quality)

- The R&D department off all of this business’s is always in progress, it’s important to found new fabrics and new formulas for cosmetics…

- The internet has become one of the most important distribution channels in luxury

Ecological factor:

- The Importance and the need to reduce emissions of greenhouse gases

- It’s more and more important to have the ISO

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