External & Global Environment of Louis Vuitton in Japan Case Study Analysis
Unit 4 External & Global Environment of Louis Vuitton in Japan Case Study Analysis
Kaplan University
School of Business
MT460 Management Policy and Strategy
Author:
Professor: Ernest Norris
Date: June 9, 2014
External & Global Environment of Louis Vuitton in Japan
Introduction
This case study is on the external and global environment of Louis Vuitton (LV) in Japan. For many years, Japan has been Louis Vuitton’s most profitable market but the economic crisis has had a negative effect on sales; sales have declined in the past few years. According to Tokyo Fashion News in November of 2008, LV has “seen more than a 5% decline in sales in Japan so far this year” (para. 3). They attribute the decline to one of two things, the decline in the Japanese economy or that LV has fallen out of favor with the Japanese people.
Synopsis of the Situation
With a decline in the economy, Louis Vuitton has been forced to open stores that offer a lower priced collection. The Japanese economy can no longer support the high-end collector name brands that it used to but Japan is in love with LV. “Based on sales figures and brand image indicators, we have compiled Asia’s Top Ten. It confirms what every luxe-loving Asian already knows: There is nothing to beat the charms of Louis Vuitton and Rolex” (Chadha, R. & Husband, Paul, 2006, para. 5).
Key Issues
The number one key issue would be the decline in the economy. The second key issue is that the Japanese are looking for a good deal, good value to product. The third key issue is the number of competitors in the Japanese markets that offer luxury products.
Define the Problem In 2008, the economy in Japan and all over the world took a nosedive; people were worried about making ends meet and severely cut down on buying luxury items. People started looking for products that offer a better value for their yen and became more cost conscious of what they were buying. There
Kaplan University
School of Business
MT460 Management Policy and Strategy
Author:
Professor: Ernest Norris
Date: June 9, 2014
External & Global Environment of Louis Vuitton in Japan
Introduction
This case study is on the external and global environment of Louis Vuitton (LV) in Japan. For many years, Japan has been Louis Vuitton’s most profitable market but the economic crisis has had a negative effect on sales; sales have declined in the past few years. According to Tokyo Fashion News in November of 2008, LV has “seen more than a 5% decline in sales in Japan so far this year” (para. 3). They attribute the decline to one of two things, the decline in the Japanese economy or that LV has fallen out of favor with the Japanese people.
Synopsis of the Situation
With a decline in the economy, Louis Vuitton has been forced to open stores that offer a lower priced collection. The Japanese economy can no longer support the high-end collector name brands that it used to but Japan is in love with LV. “Based on sales figures and brand image indicators, we have compiled Asia’s Top Ten. It confirms what every luxe-loving Asian already knows: There is nothing to beat the charms of Louis Vuitton and Rolex” (Chadha, R. & Husband, Paul, 2006, para. 5).
Key Issues
The number one key issue would be the decline in the economy. The second key issue is that the Japanese are looking for a good deal, good value to product. The third key issue is the number of competitors in the Japanese markets that offer luxury products.
Define the Problem In 2008, the economy in Japan and all over the world took a nosedive; people were worried about making ends meet and severely cut down on buying luxury items. People started looking for products that offer a better value for their yen and became more cost conscious of what they were buying. There
References: Louis Vuitton Japan Lowering Prices. (2008, November 29). Tokyo Fashion News RSS. Retrieved June 9, 2014, from http://tokyofashion.com/louis-vuitton-japan- lowering-prices/ Chadha, R., & Husband, P. (2006, January 1). The Cult of the Luxury Brand: Inside Asia 's Love Affair With Luxury