This paper described the various aspect of the Louis Vuitton’s (LV). The main purpose is to evaluate the external and global environment of the LV. This paper covers the environmental issue under the industry, remote and operating environment. These papers depicted the external and global environment in the LV in Japan. Indeed, Louis Vuitton was an international famous fashion boutique brand that provides craftwork leather bags and trunks. It is established in France in 1854 by LV. It is oldest luxury houses of fashion in France. The founder of the company was born in 1821 in Anchay, France. Further, In the 1885, the organization started its overseas store in London. In the 1888, Louis Vuitton produced Canvas Damier Pattern to make unique and recognizable by anybody. In the 1913, the company was building started on the Champs-Elysees. LV was the largest travel good store in all over the world. The company introduced Keepall bag in the 1930. (Baker, Baker, & Saren, 2010)
External environment of the Louis Vuitton is depicted by following points that are described below:
Demographic and social environment: LV includes men and women range of young people that belong to 22 to 65 age years from middle class and above them. LV is facing many challenges from demographic concern such as aging population and ethnic proportion changes in the world. LV products have good demand in Asian as compare to France. LV logo is also contributing to raise its sales and profit margin. LV product provides to only few people because its price is too high and can’t be afforded by low class people. (Ireland, Hoskisson, & Hitt, 2011)
Political and legal elements: Due to its high price no one can afford it so many fake companies came up in the market to produce low price product as their competitor. They got licensed from government due to poor intellectual property rights. Due to weak law against this kind of company no one is punished. Those fake companies are producing similar product in low cost. So, company setup new anti-counterfeiting (fake) to handle those kinds of agencies which providing fake or similar product without any legal licensed. (Armstrong, et al 2014) Moreover, they should work with government that helps to LV fight against fake companies. They forced to French parliament that conduct a criminal article against counterfeit.
Economic elements: The most important elements that impact the LV sales in India is the tariff. Due to high taxes and lower incentive is to purchase those goods its sales is not going quickly in future. LV main aim is to produce their product for richest people in the country so it has limited market to sale their product. However, there are rich people group who would marking luxury outlets in the worldwide because there are only few outlets out of France. (Ireland, Hoskisson, & Hitt, 2011)
Before growing into abroad market, we need to consider that organization will enter the market. Each firm has strength and weakness that must carefully weighted according to business and legal climate of the nation we are entering our business policy. (Armstrong, et al 2014) The three kinds of business firms were used by Louis Vuitton in their entry to international environment or business that is described below:
First, Louis Vuitton applied the joint venture to partner with business in several nations. Most of nations are prohibited the abroad firm to operate their business in our country without any partner of local business. This strategy made more capable to the LV Company. Through the joint venture they prefer to sell their product so LV became partner with Damat. LV and Damat from Orka Group firm in Turket joint venture developed to increase their business in the Turkish area. (Hall, 2011)
Second, the pre-operation of LV was conducted through channel of distribution in abroad market. Michelle trading firm was the selected distributor of LV. Through the license of Michelle Company acquired sample product of LV and resold the product of residents to purchase the costly product to allocated price of transportation. But instead of this the product came available by channel distributors. (Armstrong, et al 2014)
Third, LV Company has successfully entered operational transaction in abroad market. LV had several subsidiaries in different nations in Asia and North America. The etiquette of the firm of new business entity would be explained by the desire of LV and rules and regulation of the abroad nations. (Hall, 2011)
On the basis of above analysis, it can be concluded that clear external and global environment as well as high ability to adopt new technology in Louis Vuitton helps to maintain its competitive position in all over the world.
Armstrong, G., Adam, S., Denize, S., & Kotler, P., (2014). Principles of Marketing. Australia: Pearson Australia.
Baker, M., J., Baker, M., J., & Saren, M., (2010). Marketing Theory: A Student Text. USA: Sage Publication Inc.
DeSombre,E., R., (2007). The Global Environment and World Politics. USA: Bloomsbury Publishing.
Hall, R., (2011). Narcissistic Behavior in the Postmodern Era. USA: Xlibris Corporation.
Hoskisson, R., Hitt, M., Ireland, R., D., & Harrison, J., (2011). Competing for Advantage. USA: Cengage Learning.
Ireland, R., D., Hoskisson, R., & Hitt, M., (2011). Understanding Business Strategy Concepts Plus. USA: Cengage Learning.