Louis Vuitton in Japan Essay Example for Free

Louis Vuitton in Japan Essay * What has made LV’s business model successful in the Japanese Luxury Market? What has made Louis Vuitton’s business model successful in the Japanese Luxury is foremost due to an aggressive marketing strategy they adopted in the country. Indeed with their heritage, the â€Å"savoir-faire à   la franà §aise†, the constant innovation, the quality of their products as well as an offered lifetime repair guarantees, Louis Vuitton has managed to make its Japanese customers loyal to the brand and succeeded to build its empire in Japan. * What are the opportunities and challenges for LV in Japan? Opportunities: Characteristics of the evolution of ageing Japanese population could be an opportunity for LV, such as wealthier families and older women with increased purchasing power. Moreover, establishing an Internet business, application for smartphones as well as expending a new range of products for men and children could be the next step for further growth in Japanese Luxury market. Challenges: The changes in Japanese society and mindset are the biggest challenge for LV. The new generation doesn’t have the same vision as the previous one, and with the gloomy economic context they are less inclined to tolerate high prices that had formerly created desirability. Moreover, the entry of fast fashion brand as ZARA, HM, UNIQLO in the Japanese market, offering quality at competitive price shook up the market share of existing luxury companies in Japan. The saturated market in Japan for fashion luxury, the continuous limited editions products and the possible departure of Marc Jacobs could also be pointed out as challenges for Louis Vuitton. * What are the specifics of the Japanese fashion luxury market? Consumer behavior is one of the biggest specific of the Japanese fashion luxury market. The Japanese way of consumption is different from the Western one, as they are known to be a group-oriented culture in which there was a real pressure to possess luxury brands, their way of consuming them seems more like a compulsory form of social expression. And with adapted marketing strategies successful luxury brand had made the Japanese luxury market the mass market. Otherwise, Japanese consumer are really sensitive to quality, price, creativity, and high fashion these are key factors for successful brands in the Japanese market. * How did LV enter into the Japanese market originally? What are the other entry strategies adopted later to strengthen its presence? The enter of Louis Vuitton into the Japanese market began in the mid 1970’s thanks to the Vuitton-Racamier family who had focused mainly on building a Japanese clientele. Louis Vuitton opted for a new strategy by opening its own shop-in-shops in Japan without the help of a Japanese distributor. LV turned out to be a pioneer in establishing its own subsidiary and exporting products directly from France to Japan. Otherwise hiring a local CEO and managers to lead LV in Japan allowed the brand to conduct the business more efficiently believing they are more able to make market-driven decision, as they are able to better understand the local people. Moreover, by offering architectural stores with an interior design comparable to that found in its flagship stores in Paris, LV has been able to revolutionize the whole purchasing experience in store matching the emotion brought out by the products. In order to strengthen its presence in Japan LV opted for several others strategies, such as hiring Marc Jacob who had created a new energy for each ready-to-wear collection, mixing tradition and innovation but also by collaborating with Japanese artists (Takashi Murakami, Rei Kawakubo, Jun Aoki) and launching limited editions products (exclusivity perceive by the costumer) that enable LV to increase its profit right away. * Will LV have any new challenges arise due to the global financial crisis? How does it overcome the new challenges? As said previously there is a shift in Japanese consumer preferences and it is even more highlighted due to the global financial crisis. Indeed, the days of charging a high price for products with a proprietary logo seemed to be gone in Japan. In this time of recession even Japanese consumers are becoming more aware of the value of money. Moreover, counterfeiting appeared even in the Japanese market where quality is one of the key factors in the act of purchasing luxury goods and it became a huge challenge for LV. Now that the fake bags are hard to distinguished from the genuine ones, Japanese consumer will buy fake LV bags that they will use for everyday life, even though they own authentic that they will save for special occasions. Though there was sustained slowdown in the demand for luxury goods in 2008-2009 due to the global recession, the Japanese luxury market would remain a healthy and growing industry and strategic decisions can overcome these challenges. On one hand LV decided to lower its prices, in fact they had made a seven per cent price reduction on its range of products. On the other hand LV designated Kiyotaka Fujii a new chief executive officer (CEO), which is the first change in the Japanese management team. This change in management enable the brand to have a new vision and new ideas such as expanding the range of products for children, sales of smaller products (wallets, sunglasses†¦), spreading business on the web, expanding its strategies and opening new stores in mid-size cities where the brand is not well-know.