Lvmh

Question 1:

Luxury good is a good for which demand increases more than proportionally as income rises, in contrast to a "necessity good", for which demand is not related to income. Specifically, as people become wealthier, they will buy more and more of the luxury good. This also means, however, that should there be a decline in income its demand will drop. A luxury brand or prestige brand is a brand for which a majority of its products are luxury goods. It may also include certain brands whose names are associated with luxury, high price, or high quality, though few, if any, of their goods are currently considered luxury goods.

Another market characteristic of luxury goods is their very high sensitivity to economic upturns and downturns, high profit margins as well as prices, and very tightly controlled brands.

LVMH (Louis Vuitton Moet Hennessy) is the largest luxury good producer in the world with over fifty brands, including Louis Vuitton, the brand with the world's first designer label.

LVMH Moët Hennessy • Louis Vuitton S.A., usually shortened to LVMH, is a French holding company and one of the world's largest luxury goods conglomerate. It is the parent of around 60 sub-companies that each manages a small number of prestigious brands. These daughter companies are, to a large extent, run autonomously. The group was formed after mergers brought together champagne producer Moët et Chandon and Hennessy, a leading manufacturer of cognac. In 1987, they merged with fashion house Louis Vuitton to form the current group.

After a long phase of expansion by acquisition of other groups, LVMH decided to refocus on its keys activities that are: fashion, tanning, wines and spirit. The objective is to restore the financial profitability of the group. For that purpose, the group set up 3 strategic axes: consolidation of the main brands, abandonment of the unprofitable and non-strategic assets, and increasing prices.

As an organization, LVMH is divided into five...