LANVIN STRATEGIG ANALYSIS

BA BUSINESS

STRATEGIC MANAGEMENT

• Strategic analysis of Lanvin Paris -

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Word Count: 2542

Session: 2018-2019

Module: Strategic management

-TERMS OF REFERENCE

        This report is a report for the strategic management module at the university of the West of Scotland.

It’s an audit and an analysis of a French company which is called Lanvin. The report is due for 2nd of December 2018.

1. EXECUTIVE SUMMARY

        The purpose of this report is to analyse the strategy which Lanvin use to explain why the sales of this company decreased for four years.

During this report, the use of some tools studied during the strategic management report, like SWOT analysis, the five forces analysis of Michael Porter and also the PESTEL analysis.

Lanvin is a French fashion house created in 1909 by Jeanne Lanvin. It remains today the oldest French fashion house still in activity. Lanvin is specialized in clothes for men and women, perfumes and house decoration articles.

Lanvin is the representation of luxury and French quality, so the segmentation of customer is the upper class.

On the other hand, the brand is headquartered in Paris, count 11 stores in different places in the world and approximatively 400 outlets.

Since the last 5 years, the global turnover of Lanvin is in decline, it was at 167428400€ in 2015, then he drops to 135441200€ in 2016 and keep dropping in 2017 to reach 89354000€ in 2017. Actually, the company is owned by Shaw Wang Lang.

In order to find solutions to migrate the decline of Lanvin’s turnover, you will find in this report an analysis of some key points, to help to find strategic recommendations to straighten the turnover on the short term.

Those key points are the management team who has some trouble of understanding within the staff, then, the low number of ads and the fact to be only focus on elite class, with those elements, we can identify some recommendations:

• Merge relationships between the executive team and the creative team.
• Do more ads and new types of ads while using social medias and by putting forward Lanvin is the oldest French fashion house still in activity.
• Try to diversify their products because there is only a little part of people which are able to buy Lanvin products, or they can create another brand which is less expensive, to reach new customers to increase their sales.

1. PURPOSE OF THE REPORT

The purpose of this report is to make a report on a company which is in trouble, the company is Lanvin. This report will be composed with a strategic audit which explain some of the main problems that this company has, mainly on its global turnover decreasing, then, it will have to a strategic analysis to find out solutions on the short term to reverse the trend of the global turnover, which has been declining for several years. To make this, this part will have an internal and an external analysis of Lanvin.

1. STRATEGIC AUDIT

To start the strategic audit, Lanvin see its turnover decreasing since the last four years, and it is decreasing more and more with a decrease of 47% of its turnover ((y2 - y1) / y1)*100 between 2014 and 2017.

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This decrease can be due by many factors and mainly because of wrong strategy choices.

The decrease of the turnover is very big, it means that the company is in trouble, because it can have a little decrease for one year but on four years, with a decreasing more and more important, no.

Furthermore, the benefits of the company are in decreasing too.

From benefits to losses, Lanvin has seen its profits going down, with a loss of -1676% between 2014 and 2017. A drop of the turnover does not mean a decrease of the benefits in general, but actually, it is the case, so it increases the fact the company is in trouble.

Furthermore, after numbers, some strategic choices can be problematic for the company. For example, since 2001, the fashion house has been bought by Mrs. Shaw-Lan Wang, withdrawing Lanvin from the l’Oréal group and thus depriving the fashion house of the benefits of the groups.

Moreover, the main politic on the ads for Lanvin are mainly on fashion magazines and not enough on internet and on social medias, but the economic situation of the company does not allow to make better and more ads: « the company, which has already closed a number of unprofitable outlets, has put in place a cost reduction plan recommended by Long Term Partners after an internal audit.

This plan involves job cuts and spending cuts, such as advertising budgets or store investments. » (Jean-Michel Bélot, 2017),

According to (Jean-Michel Bélot, 2017), « Since the arrival of the stylist Bouchra Jarrar, in March 2016, his women's collections, with sober lines inspired by the male tailor fail to convince. » So, in addition to economic problems, Lanvin has to fix the problem with its designers to increase its sales.

1. STRATEGIC ANALYSIS

INTERNAL ANALYSIS

To realise the internal analysis, we will use the SWOT analysis.

The SWOT analysis or matrix is a method or tool of strategic analysis of the company that can be used in the marketing field for a company or a product.

SWOT Strengths and weaknesses:

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