Lvmh Porter's Five Forces
The activity of LVMH is mainly focused in luxury industry and its spectrum of products is divided into five generic fields: • Wines & Spirits • Fashion & Leather Goods • Perfumes & Cosmetics • Watches & Jewellery • Selective retailing According to the financial report of LVMH as of 2013, below are the revenues generated across the above mentioned fields. It can be observed that the Fashion and leather goods have consistently generated the maximum revenue for LVMH accounting to over 33%. Porters Five Forces Framework Fashion and leather goods have generated the most revenue for LVMH. Below is an analysis of Porters Five forces with the Fashion and leather goods industry as a whole. Threat of Entry/Potential Entrants The threat of entry is …show more content…
• Customer segment needs to be targeted appropriately. Usually for fashion it is the middle/high income customers • Customer shopping experience needs to be high • Quality of products needs to be high Threat of Substitute The threat of substitutes for LVMH is moderate due to the below • Fashion and leather goods have very high product differentiation. Companies need to focus on customer demand • Customers are loyal and have also realized that there is no substitute brands when it comes to fashion • Local market fashion brands can tend to “copycat” the industry giants who have just entered the respective market • Substantial product …show more content…
Due to their huge success, control over suppliers can be always be maintained by the company. Rivalry among the competitors is the force to reckon with and it is the one that will decide the future profitability of the fashion industry. Competition in fashion is very high since there are only a handful of competitors when looking at the giants. Future Industry evolution Scenario 1 The future of today’s world is technology. The evolution of fashion industry should be in trend with the technology developments. Technology is the driver of transformation supported by government incentives. The options could be as below • Fabrics used should be new high-tech. Some examples could be nano-tech fabrics and programmable clothing, use of biodegradable non toxic spray-on clothing • Clothes for each could be designed using 3D body scanners which will allow people to “try on” clothes in virtual mirrors and interactive screens • Switching to a “low-carbon” economy based on renewable
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