Louis Vuitton SWOT Analysis- And Competitors

Introduction & History of Louis Vuitton

A brand that started in the 1800s and is still running successfully as the world’s most valuable luxury brand in the 21st century. Way back in 1854, a Frenchman started a luggage company which he named after himself; ‘Louis Vuitton Malletier predominantly, known as Louis Vuitton. A simple innovation in the design from top trunks to flat trunks made him stand out from the crowd. Here, we’ll know Louis Vuitton SWOT Analysis.

Spreading the business of luxury bags across Europe through trade shows, Louis Vuitton passed away in 1892. As it happens in any reign, the company’s ownership was taken over by his son, Georges Vuitton. With the new ownership came the new mission for the brand. And the mission was to grow this French brand into a global brand. He started exhibiting the products in various trade fairs, and in 1893 he exhibited the company’s products at Chicago World’s Fair. And just three years later, in 1896 company’s signature Monogram canvas was launched & had secured patents worldwide.

Expansion & Merger

Post Georges Vuitton’s death in 1936, his son Gaston-Louis Vuitton took over the company and turned it into a multinational brand. Indeed, Louis Vuitton had come a long way from the Nazi controversy to broadening its product line in 1959. However, in 1987 a significant merger took place between Louis Vuitton and Moët et Chandon & Hennessy (manufacturers of champagne & cognac). This merger was the birth of the LVMH (Louis Vuitton Moët Hennessy) group in the fashion market, which took Louis Vuitton to great heights.

SWOT Analysis

A century-old brand is ubiquitous because of its quality, marketing strategies, expanding product line and, unique logo. But if a brand faces success on the world stage, it also faces potential threats in the market. SWOT Analysis is basically a management framework that analyses the brand’s strengths, weaknesses, opportunities, and threats. It helps the brand set a benchmark and accomplish better than its competitors. Here are some of the pivotal analyses of Louis Vuitton.

Strengths

1. Brand recognition and Brand value: If Louis Vuitton is known globally, it is because of its quality & exclusivity. It has always believed in limited edition series, which creates a buzz & cravings for the latest style of bags. Quality has forever been one of their core values. Every bag is individually designed and crafted with utmost care. And in comparison, to 2019, the brand value has increased nearly to $39.3 million in 2021 as per Forbes.   

2. Iconic Logo: A minimalistic designed logo by Georges Vuitton has not changed much since 1892. The inspiration for the logo is derived from roman fonts and gives a classic, elegant & unique look to the product. The only change that it underwent was the removal of the brand’s name underneath the monogram. Over the years, Louis Vuitton’s popularity has proved that one does not need an extraordinary logo to be renowned across the globe.

3. Endorsement strategy: If quality is one of the core values of Louis Vuitton, then promoting the brand with glamorous models & celebrities is one of their success secrets. They have endorsed their exclusive products with celebrities like Jennifer Lopez, Angelina Lopez, and Emmy Rappe, to name some of them.

4. Collaborations with top designers: Collaborations among designers, models, and brands are on the rise in the 21st century. And Louis Vuitton has been among the first luxury brands to collaborate with designers & artists. Its very first collaboration was with the artist Stephen Sprouse. Together with him & March Jacobs from Louis Vuitton, redesigned Monogram graffiti prints that read Louis Vuitton Paris. This collaboration was one of the most successful and brand’s best partnerships. Nonetheless, the brand had many successful partnerships here on.    

5. Customer Loyalty: The company has 460 stand-alone stores and operates in nearly 50 countries. As per the market research, the current targeted consumers are from the elite class and in the age group 18 to 40. And the study shows that the customer not just returns to buy more but also refers in their circle.

Weaknesses 

1. High-end product prices: Although the brand is known for its elegant and premium products, its basic prices range from $1500, making it difficult for the masses. Hence the brand is able to reach only a small segment of society.
2. Product Innovation: The company is still more popular for handbags and trunks; however, it focuses on handmade products rather than machine-made ones. This production pattern, in turn, reduces their production capacity and ends up spending more effort & capital. The LV initials on every product and Monogram canvases restrict them from designing products with innovative ideas.
3. Weak online presence and online sales: The company does invest in digital technology but is very careful about the brand reputation. And the only online sales that are generated are from its own e-commerce stores. Moreover, CEO Bernard Arnault considers that a heavy online presence will affect their image of luxury brands.
4. Limited distribution channel: Exclusive products are distributed only in their exclusive outlets. The company believes their limited editions should be sold only at their outlets and by a highly professional salesperson. Hence Louis Vuitton products are not sold at any other department stores. This can impact the long-term growth of the brand.

Opportunities

1. Better prospects in developing countries: The brand has marked its presence majorly in developed nations and has captured the elite segment. But now it has better opportunities to develop its business in developing countries like India & China.  
2. Environmental Policies: In recent years, the market has changed from being profit-oriented to eco-friendly. The brand can invest in using more eco-friendly materials and increasing its market share through various products.
3. Glamourizing for Generation Z: Gen Z is currently the largest segment on the globe that prefers spending on high-end products to regular ones. The brand should grab this opportunity to attract more millennials with an exciting fusion of traditional & trendy stuff. 
4. Addition/Extension of the product range & services: Since its inception brand has increased its product line from just handbags/trunks to watches, accessories, jewelry, clothes, perfumes, and shoes. However, in order to reach a larger segment, they need to focus more on trendy fashion than just traditional look on all its products.

Threats

1. Forged products of Louis Vuitton: The brand has always faced counterfeiting since its early success. In order to preserve the creativity and authenticity of the brand, it has initiated anti-counterfeiting procedures globally. However, Louis Vuitton products still face threats in the emerging market and low-income markets. 
2. Global economic crisis: As the brand operates in various countries, the threat of political climate affects the smooth operation of the brand. It also faces rising pay levels and rising prices of raw materials. 
3. Changes post-pandemic: The whole era has changed in terms of perceiving fashion and purchasing it. The market no longer follows the traditional path; it has to change according to growing demands and situations. From 2020, the whole world was restricted to online presence than being offline. The major fashion houses presented the most awaited spring and winter collections on the digital platform. Hence selling the products through ancient methods will be a threat to the brand in the future.      

Competitors

Being the world’s most valuable luxury retail brand has its own pros & cons. It’s no more about waiting to bring the spring or winter collection to the market or attract customers towards the retail shops. But now it’s about how soon can the brands reach their customers?

It’s a competitive market in every sense, and one needs to be versatile to sustain in the market. Even the world’s best brand has to face its competitors. Louis Vuitton’s biggest competitors in the market are:

• Chanel
• Hermes
• Gucci
• Burberry
• Cartier

Conclusion

Louis Vuitton is not just any other lifestyle or retail fashion company; it is a style statement that is running for over a century now. It is the most luxurious, most desirable, and most elegant brand in the world. In a span of 166 years, the brand has adapted to changes, accepted various marketing challenges, and delivered the best to date. 

Frequently Asked Questions

How many outlets does Louis Vuitton have in the USA?

 Louis Vuitton operated more than 530 stores in the USA.

Does Louis Vuitton manufacture products in China?

No, it does not manufacture products in China.

Is Louis Vuitton cheaper in France than in the USA?

Yes, Louis Vuitton handbags are cheaper in Paris & Europe than in the USA.

Is there ever a discount on Louis Vuitton products?

No, Louis Vuitton does not offer a discount on any of its products.

Why does Louis Vuitton destroy unsold products?

It follows a strict business model, where any unsold product is burnt to maintain exclusivity and prevent thefts.

Which is the number one fashion brand?

As of 2021, Nike is the number 1 fashion brand across the globe.

Which is the other brand that is more expensive than Louis Vuitton?

Chanel is more expensive than Louis Vuitton in terms of price per product.