SWOT Analysis

Appendices 1: SWOT Analysis

SWOT analysis is tool which analyzes the business environment and the capabilities of an organisation to gain an overall picture of its strategic position. It helps the business to focus on the key issues through its strengths and weaknesses and the opportunities and threats of the environment. The company has to base its strategy on three ways:

- Ensuring the safety of the company, the brand and its product by acting on its weaknesses and protects to the threats.

- Consolidate the forces of the company, its brands and products.

- Expand the business on the opportunities.

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We can find hereafter the SWOT analysis of LVMH

Strengths:

- The company's strong presence across the value chain is a key strength for LVMH. The company designs and manufactures leather goods, clothing, accessories, watches, and other luxury goods alongside packaging and distributing its products directly to its retail stores and other customers from its warehouses.

- The company offers the customers a wide range of products and brands. Indeed LVMH provides its products under five segments, Wines and Spirits, Fashion and Leather Goods, Perfumes and Cosmetics, Watches and Jewelry, and Selective Retailing.

- Geographically diversified operations help the company mitigate the various risks associated with overdependence on a particular market. It has a strong market position in Europe, the US and Asia-Pacific, and continued to expand its distribution network. LVMH own around 3000 store in the world.

Weaknesses:

- The company notices an increase of the debt short and long run.

- LVMH has not a real and unique enterprise culture because of the huge number of its brands.

- LVMH is involved in a number of legal and regulatory court proceedings, which may hamper its financial condition. The outcome of these legal proceedings may have a material impact upon the company’s financial condition and its operations.

Opportunities:

- The company intends to expand its retail network through opening of new stores through the world. Especially in Asia where LVMH is popular.

- The company follows an external growth through an acquisition and merger strategy.

- The company stands to benefit from the growing trend of online retailing, which provides consumers the convenience of shopping from home, doing away with the time consuming journey and saving on the transportation cost. With the increase in interactive methods and limitless content, the retail e-commerce is growing at a faster rate. The company sells its products online through its e-commerce websites including, www.louisvuitton.com and www.sephora.com.

Threats:

- The increase of the counterfeit products may lower the company’s sales and adversely affects its profit margins. Moreover, as customers mistakenly

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