MT460 – The External and Global Environments – Louis Vuitton Case Study Analysis

Company Name: Louis Vuitton in Japan

Topic of the Week: The External and Global Environments

Synopsis of the Situation

            Louis Vuitton is the best performing European luxury multinational firm in Japan. The company has its stores distributed in major towns of Japan including Nagoya, Osaka, and Tokyo. Louis Vermont takes pride in the unique features of its brand across all its stores in Japan. The company has put in extra effort to integrate culture and consumer behavior in the country. For quite a long time, Lous Vuitton has been successful in the Japanese luxury sector, making Japan its most profitable market (Pearce and Robinson, 2013).

Unfortunately, the global economic crisis now places a big challenge in Loius Vuitton because it has caused a decline in sales. This is because, the global economic crisis has resulted into a decline in consumer spending, as many buyers run to Vuitton’s competitors such as Coach and Gucci which charge low prices on luxuries. Since the global economic crisis is also characterized by changes in consumer preferences, Louis Vuitton needs to implement new strategies that will keep in strong in the market (Pearce and Robinson, 2013).

Alternative Solutions

In order to meet the challenges associated with global economic crisis, Loius Vuitton can implement three different solutions. First, the company should consider offering an additional types of luxury charged at slightly lower price than the products it currently offers. Second, Louis Vuitton should use modern equipment in production to produce quality products. Third, the company should sell products of varied prices to meet the needs of low-class, middle-class, and high class customers.

Selected Solution to the Problem

The best solution to Vuitton’s problem is to consider selling products of varied prices to meet the needs of customers of different economic backgrounds. This is the best solution for the company because it will ensure that sales are always high even during tough economic times, with the only variation being on the types of items purchased (Kharas and Gertz, 2010).

Implementation

Implementation of the above solution is simple and straight forward. The only thing that Louis Vuitton should do is to start grouping its products in terms of quality and size, and then assign prices for the three groups of customers (Kharas and Gertz, 2010).

Recommendations and Conclusion

Even though Vuitton’s operations have been affected by global economic crisis, the company should not close its stores due to a decline in sales. It is recommended that Vuitton focuses on a strategy that will keep its sales high even if consumer spending is low (Kharas and Gertz, 2010). In conclusion, Vuitton should understand challenges in the international business environment and always be prepared to meet them in order to compete effectively in the market.

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