Louis Vuitton Case Study
YASIN CISSE
MET MG448 E-commerce & Web Designs
23 September 2015
Louis Vuitton Case Study
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Table of Contents
Introduction/Abstract………………………………………………Pg 3
Mission Statements, Business, Customer and Value Proposition...Pg 3-4
SWOT Analysis….….….….….….….….….….….….….….….…..Pg 5-7
Strategic Management Factors…….….….….….….….….….…...Pg 8-9
Implementing An E-commerce Business Model….….….…….....Pg 10-13
Conclusion………………………………………………………….Pg 13
References………………………………………………………….Pg 14-15
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Introduction/Abstract
This case analysis will offer a look at the legendary high-end designer luxury
goods company Louis Vuitton and its E-commerce entry into the virtual world of online
retail shopping. Beginning with the mission statements of the company, we will examine
its strengths, weaknesses, opportunities and threats (SWOT) and analyze how the
company’s strategy manages these elements and resolves some of its problems through
the implementation of E-commerce.
Mission Statements, Business, Customer & Value Proposition
“Elegance, creativity and Art de Vivre” (Farfan, 2015) is the motto of Louis
Vuitton, designer and purveyor of luxury goods. Founded in 1854, Paris based Louis
Vuitton is the parent company of the LVMH Group, who manages more than 60 luxury
brands, retailers and companies such as Sephora, Donna Karan, Tag Heuer and Bvlgari,
to name but a few. Louis Vuitton’s mission statement is the same for all of the luxury
companies managed by LVMH (Louis Vuitton Moet Hennessey) Group: "The mission of
the LVMH Group is to represent the most refined qualities of Western “Art de Vivre”
around the world. LVMH must continue to be synonymous with both elegance and
creativity. Our products, and the cultural values they embody, blend tradition and
innovation, and kindle dream and fantasy” (Farfan, 2015).
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Louis Vuitton specializes in high-end leather handbags and accessories. Famous
for the quality and craftsmanship and durability of its products, Louis Vuitton caters to
customers who appreciate the best that money can buy. Louis Vuitton typically targets
wealthy, upper class women aged 35-54 who value the timeless elegance of the Vuitton
product and its newer generation of consumers, young women ages 18-34 who are brand
conscious and view luxury goods as status symbols. Additionally, Louis Vuitton targets
celebrities and members of the “jet set” (Zadig, Kurtz, Gatewood, Potter, 2012).
Louis Vuitton is renowned worldwide for the craftsmanship that goes into the making of
its handbags. Fine materials and impeccable quality are their protected heritage. Beauty,
craftsmanship and timeless elegance are the value proposition offered to the customer.
Louis Vuitton Case Study
SWOT Analysis
Louis Vuitton has based its reputation on both style and craftsmanship. Its
legendary brand is a global status symbol. It is one of the few luxury brands whose
products have become “trendy” while remaining classics, all without sacrificing the fine
craftsmanship and superior materials for which it has been know throughout its history.
Because it prides itself on itself on its exclusivity, the B2C model is the ecommerce
choice for Louis Vuitton. This is where luxury meets technology, permitting Louis
Vuitton to offer its exclusive luxury goods on its website.
Strengths:

Louis Vuitton is the “oldest and most legendary fashion house in the world”
(Ahuja, 2014)

It is known for its exquisite craftsmanship

It is ever evolving artistically

It is the largest luxury brand in the world and has been active for 150 years

It is an “international logistics center” (Ahuja, 2014)

Website can market its products

It offers exclusivity in both materials and design (Ahuja, 2014)

It offers custom made products

Its brand is endorsed by celebrities in many sectors (fashion, sports, politics)
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Louis Vuitton Case Study
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It markets products through its own stores to control both quality and pricing
Weaknesses:

The price of Louis Vuitton’s products means that it can only the wealthy status
seekers can afford it

Unlike other luxury brands, it markets only through its own stores, resulting in
reduced retail opportunities

It is dependent on the economic climate-sales can slow down drastically if the
economy is depressed

It historically has not offered discounts on its products
Opportunities:

Recognition of its brand positions it well to produce new products

It regularly updates its image to appeal to the changing tastes of its customers and
to attract a new demographic among the elite

It can use celebrities to promote its brand

It can expand worldwide

It can stage promotional events

It can exploit digital media to promote its brand
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Threats:

One of the major threats to Louis Vuitton is counterfeiting. Its products are
constantly being reproduced using cheaper materials and inferior craftsmanship,
which in turn threatens the brands exclusivity.

Animal Rights groups such as PETA staging protests, particularly against the use
of fur, could limit its design potential

The economic climate/recession is always a potential threat

It faces stiff and constant competition from other luxury brands (Chanel, Gucci,
Prada)

It must be on top of keep up with and stay ahead of changing trends

It must use different marketing strategies for different continents

It faces a threat from a political climate of inequality where many people are now
reluctant to show their wealth in a conspicuous manner and are turning away from
logos (Halzack, 2015).
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Strategic Management Factors
Louis Vuitton’s brand is based on its heritage, craftsmanship, exclusivity and
legend. Through these elements, it appeals to the desire of its customers to be linked with
an elite product that is synonymous with timeless elegance and superior quality. “Higher
costs are associated with higher quality” (Pandit, 2015) and being able to afford such
products places Vuitton customers in an elite category, which is psychologically
important to them. Therefore, keeping its prices high and not offering discounts are 2 of
Louis Vuitton’s strategies that help them attract and keep wealthy customers (Pandit,
2015).
One of Louis Vuitton’s challenges is to increase its sales without diluting its
product-essentially converting it from a luxury brand into a mass-market product (Pandit,
2015). Innovation is another of Louis Vuitton’s challenges. It must continually find new
ways to appeal to the changing trends and tastes of its customers. It must also recognize
that different countries require different strategies due to cultural factors and buying
habits. The E-commerce business strategy is an excellent way to achieve these goals.
Ecommerce dramatically increases the number of clients for Louis Vuitton. Storefronts
are not a practical or cost effective solution and buying habits have changed, with
younger clients particularly preferring to shop online. Using e commerce permits Vuitton
to tell its story to customers worldwide and links it to all forms of social media.
Algorithms can drive the advertising of products permitting it to do business faster and
more effectively.
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E-commerce offers the opportunity to sell to customers globally 24 hours a day.
Additionally, one does not need to have a store or hire personnel to work there. What
better way to attract new customers and gain worldwide exposure? (IMA, 2000). Before
implementing an E-commerce business model, it is important to have clear objectives. In
the case of Louis Vuitton, E-commerce provides a means to overcoming some of the
challenges it faces. It becomes easier, for example, to tweak your marketing strategy for a
different continent. It can advertise events and exhibitions or offer them online. It can
educate customers on the problems of counterfeit, which is one of its main problems. It
can offer custom design services.
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Implementing An E-commerce Business Model
Implementing an E-commerce business model requires a complex strategy with
various components that need to be addressed in order to take advantage of the benefits
that the Internet offers (Prenhall). The B2C Business model that Louis Vuitton would
implement contains 8 key components:
1) Value Proposition: Why should the customer buy from you?
The customer should buy from Louis Vuitton because of its superior quality and
craftsmanship, proven track record over the long term, innovative designs, possibility of
custom, timeless and classic products that never go out of style. (It is the most valuable
brand in the world, according to Forbes)
2) Revenue Model: How will you earn money?
Using E-commerce, Louis Vuitton will reduce its costs by having fewer retail
outlets and personnel and can reach customers worldwide 24 hours a day. It can more
easily attract new customers with different marketing strategies and showcase new
products quickly. Louis Vuitton does not offer discounts so it must emphasize the
superiority of its products to justify the prices.
3) Market opportunity: What marketplace do you intend to serve, and what is its size?
L
Louis Vuitton will serve elite customers who can afford high end products.
Louis Vuitton Case Study
Russia and China’s “1%” shop for luxury brands in Prague, where retail space is at a
premium (Halzack, 2015).
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4) Competitive Environment: Who else occupies your intended marketplace?
Examine which luxury brands would be your main competitors on the Internet (i.e. Prada,
Gucci)
5) Competitive advantage: What special advantages does your firm bring to the
marketplace?
Louis Vuitton is legendary for its craftsmanship and innovation.
6) Market strategy: How do you plan to promote your product or services to attract
your target audience?
 Endorsement by celebrities, athletes, politicians
 Events and exhibitions, social media.
 Billboards, magazines and catalogues.
 Be aware of changing trends, consider environmentally friendly practices
and philanthropy.
7) Organizational development: What types of organizational structures within the
firm are necessary to carry out the business plan?
Gregory T. Clark OD Key Custom Designs states that experts will be needed in each
functional area of the company to coordinate information and connect “people and
process”.
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8) Management team: What kinds of experiences and background are important for
the company’s leaders to have?
Gregory T, Clark states that a basic knowledge of E-commerce business is essential, but
also, those who deal more directly with customers must be specialized in different areas.
Periodic training is necessary to remain current.
Conclusion
Louis Vuitton is the top provider of luxury goods in the world. Traditionally,
Louis Vuitton has sold its products in retail stores, but with the changing global nature of
the business environment where many people prefer to shop online, it has implemented
an E-commerce business model. Its company exudes many strengths which help maintain
its competitiveness, but on the other hand the brand also faces challenges and threats in
both its internal resources and external environment. A sound strategy is necessary when
implementing an E-commerce business model. By respecting the components of an Ecommerce business, Louis Vuitton will maximize its chances of reaping the benefits that
the Internet has to offer.
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References
Ahuja, V. (2014). Louis Vuitton: Using Digital Presence for Brand Repositioning and
CRM. Retrieved from http://www.igi-global.com/chapter/louis-vuitton/111506
Clark. G. (n.d.). E-Business Strategic Planning Retrieved from
http://keycustomdesign.com/resources/articles/ecommerce,7/ebusiness-strategicplanning,10.html
Farfan, B. (2015). Louis Vuitton Mission Statement-Elegance, Creativity & Art de Vivre
http://retailindustry.about.com/od/retailbestpractices/ig/Company-MissionStatements/Louis-Vuitton-Mission-Statement.htm
Halzack. S. (2015). Why Louis Vuitton, Gucci and Prada are in trouble.
http://tablet.washingtonpost.com/rweb/top/why-louis-vuitton-gucci-and-pradaare-in-trouble/2015/06/15/e521733c-fd97-11e4-833c-a2de05b6b2a4_story.html
IMA. (n.d.). Understanding and Implementing Internet E-commerce. Retrieved from
http://www.imanet.org/docs/default-source/thought_leadership/technologyenablement/understanding-and-implementing-internet-E-commercecopy.pdf?sfvrsn=2
Pandit, S. (2015). Increase Price profits! We are Louis Vuitton!
https://mpk732.wordpress.com/2015/05/01/louis-vuitton-pricing/
Prenhall. (n.d.) Structure and Components of the E-commerce Model. Retrieved from
http://wps.prenhall.com/wps/media/objects/5073/5195381/pdf/Turban_Online_Ap
pB.pdf
Zadig, A., Kurtz, K., Gatewood, J., Potter, N. (2012) Louis Vuitton Product and Market
Louis Vuitton Case Study
Expansion: Analysis and Integrated Marketing Communication Plan. Retrieve
from https://liinalintu.files.woedpress.com/2012/2013/louis-vuitton_imcplan_neapolitan.docx.
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