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Company file: strategies of Adidas and LVMH

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case study
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  1. Introduction
  2. Analysis
    1. Description of work
    2. Swot analysis
    3. Synthesis
  3. Marketing Strategy
    1. The objectives
    2. The market segmentation
    3. Target
    4. Positioning
    5. Sources of volume
    6. Driving elements of the mix
  4. Marketing mix
    1. Product policy
    2. Pricing Policy
    3. Distribution Policy
    4. Communications Policy
  5. Conclusion

The LVMH group was founded in 1987 by the merger of Moet Hennessy with Louis Vuitton which helped to build the world's leading luxury products. Having a long history, LVMH brings together noble professions with strong traditions and unique set of internationally established brands. LVMH has a unique portfolio of over 60 prestigious brands.

The group is a conglomerate of luxury brands, led by Bernard Arnault, which are collected by businesses within five divisions: wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewelry with selective distribution. With the aid of its policy of brand development and expansion of its international distribution network (over 2,000 stores worldwide), LVMH since its creation has a strong growth momentum. The flow-chart of brands of LVMH brands is also provided later in this report

Adidas is a group that manufactures and distributes sporting goods: clothing, shoes, balls under the brand Adidas (with different sub-brands like Adidas Original Adidas, Sport Style or Reebok), but also golf equipment (Taylor Made Adidas Golf (TMAG)), etc.

In 2007, the company claims to employ approximately 31,000 employees worldwide. It is also internationally known as: the three stripes, in relation to one of its logos. Its headquarters in Herzogenaurach, Bavaria (in France: France Adidas is Landersheim).

The two groups that are the subject of this study are involved in separate areas. LVMH is in the luxury sector, while Adidas is a sports equipment. Despite these differences, the two groups these two brands have similarities in their environment or even in the various strategies they use.

This study begins by analyzing the environmental sector of the two companies, namely their opportunities and threats. Then it follows with an internal diagnosis of these two structures, distinguishing strengths, weaknesses and traits. Finally, it will develop a strategic overview showing the strategic directions taken by the two groups and their future prospects.

These two groups have many similarities: they are both part of the leading companies and brands in their respective markets, they have a shared DAS (the clothing). But major differences exist between the management of these two non-competing companies. This is probably because they are not competitors, and since they are not on the same market segment that these differences persist.

Indeed, the LVMH luxury goods sector has been seen to grow disproportionately by numerous acquisitions. It is this external growth which is responsible for the bulk growth of the French firm. However, the German counterpart has grown primarily by geographic expansion. If LVMH is also more well established than Adidas worldwide, the potential volume of customers it is said that only the geographical expansion of LVMH could not suffice to ensure its shareholders a satisfactory return.

Note also that the size of LVMH today and reputation allow the company to refocus and play the image it has to give its brands itself as an industrial and commercial power globally recognized (image corresponds to that of its target audience).

For its part, Adidas also has a global reputation with a strong financial commitment to communication, another similarity with LVMH.

Tags: LVMH, Adidas, common strategies, similarities between the two companies

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