Topic of the Week:  External and Global Environment

SWOT Analysis:

Strengths

1. It is one of the oldest and also one of the most legendary houses of fashion in the world. As a result, the company enjoys a strong brand name in the market and has been in existence for over 150 years.
2. The brand has its presence in most of the largest shopping hubs in the world thus increasing the company’s global presence.
3. The brand has clientele including international celebrities thus making the products readily acceptable in most parts of the world.
4. All the products of the company have strong brand logo, LV initials, thus strengthening and protecting the brand identity and the image.

Weaknesses

1. The brand is exclusively available in its registered outlets thus making it difficult for people around the world.
2. The company also suffers from fake imitations that affect brand and sales to significant levels.
3. The brand has limited customer base since its products are purchased by the elite and the rich who want to make a statement and want to be distinctive from others.
4. The business largely depends on the current economic situations and hence there are low sales during economic recessions. Demand for luxury declines during economic recessions and this was evidenced during the 2002 economic recession.

Opportunities

1. The company can introduce customized products for prominent figures thus enabling them to make exclusive order of the LV products.
2. It is also prudent for the organization to keep on revamping its image from time to time to ensure that it meets contemporary tastes and styles of its potential customers.
3. The company can take advantage of its celebrity clientele to advertise and promote its products to the outside world.
4. The company can offer once in a year discounts for its customers.

Threats

1. There are several counterfeit products in the luxury market. LV products are the most counterfeited brands in the fashion world due to its image as a status symbol (Fine, 2009).
2. The unpredictable economic conditions can have adverse effects to the overall business performance especially during economic crisis.
3. LV has also faced the wrath of animal rights activists who have expressed their discontent with the company’s use of real fur in their decorations.
4. There is stiff completion in the fashion industry especially in the Japanese market. The major competitors include; Christian Dior, Chanel, Gucci, Prada and Salvatore among others.

Synopsis of the Situation

From the above analysis, it is evident that LV products remain one of the most recognized products in the world of fashion. It is recognized as one of the strongest brand with an estimated value of 19.395 Billion dollars (Fernie, Fernie & Moore, 2015). The strong brand name associated with LV and the long time dominance in the market has resulted to the company being recognized amongst the most valuable global brands. It is however prudent to note that the company’s dominance in the fashion market is at stake due to increased competition and counterfeit products in the market.     For instance, the counterfeit products may adversely affect the brand especially if they do not meet the expected quality levels.  Increased competition and the turbulent economic conditions also threaten the overall performance of the company. For instance, the Japanese market is flooded with luxury products and hence the company should be proactive to ensure that it retains a sustainable market share in Japan and other parts of the world.

Alternative Solutions

The objective of a SWOT analysis is to enable the management of an organization to take advantage of the strengths and opportunities as well as mitigate risks associated with threats and weaknesses that surrounds the company (Ferrell & Hartline, 2011). After analysis the following are alternatives;

1. The company should establish an anti counterfeiting team to ensure that all its products are not counterfeited anywhere in the world (Fine, 2009). From the above analysis, it is evident that the rates at which these products are counterfeited pose a great threat to sustainability of the business.
2. The company should also make changes to its supply chain. LV products are currently sold exclusively on its outlets thus making it difficult for other consumers that are far away from these outlets.
3. The company should also diversify its market to other parts outside Japan. Other countries such as India and Australia offer a potential market for LV products.

Selected Solution to the Problem

As aforementioned, LV has enjoyed a strong brand over the years. It is however prudent to note that this brand is at risk due to increased cases of counterfeits and stiff competition.  Nevertheless, with a strong brand, there will be increased consumer loyalty and hence increased productivity. It is therefore essential for the company to ensure that there is zero counterfeit products in the markets and at the same time ensure that there are high quality products in the market. This will consequently lead to sustainable business. In essence, the company should invest heavily to ensure outstanding brand development strategy.

Implementation

The implementation of this strategy will not be easy. However, with determination and willingness, it will be possible to have a winning strategy. For instance, the company must set up anti counterfeit team with its leadership at the headquarters (Ferrell & Hartline, 2011). Other team members will be located indifferent parts of the world and remain answerable to the head office to ensure that only original products with LV logo are in the market. Then there will be routine assessment programs to ensure that everything is going as planned.

Recommendations and Conclusion

After an intensive analysis of the LV Company, there are several essential recommendations that can help move the organization to the next level. For instance, to make the products more appealing, LV can ensure that some of the products of the brand are produced in small quantities. The company can also produce special editions from time to time and offering different products for different markets (Fernie, Fernie & Moore, 2015). This will make these products become more premium and at the same time reduce the chances imitation and counterfeits. Also, this approach will be essential to customers who want to be distinct from others.

It is also recommendable for the company to work tirelessly towards enhancing its brand awareness to have an expanded market. To achieve this, it is paramount for the company to consider branding and lifestyle advertising that is becoming popular every single day. The company should invest heavily in advertising in both print and mass media to ensure that its brand awareness reach the greatest heights. The organization should also consider franchising with High end malls in all parts of the world to ensure that its products reach the furthest possible market. High brand awareness and ready market will be essential for the company’s success.

References

Fernie, J., Fernie, S., & Moore, C. (2015) Principles of retailing. 2^nd . Ed.  Routledge

Ferrell, O., & Hartline, M. (2011). Marketing strategy. Mason, OH: South-Western Cengage Learning.

Fine, L. (2009). The SWOT analysis. [Place of publication not identified]: Kick It.

 
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