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Assessment 01

ZARA AND LOUIS VUITTON

Student ID Student

Ta bl eo fCont e nt s 1

I nt r o d uc t i o n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

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St r a t e g i cl e a d e r s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

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Po r t e r ’ sFi v eFo r c e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

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St r a t e g i cc a p a b i l i t i e sa ndv a l uec ha i n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

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Conc l us i o n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

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Re f e r e nc e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

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1I n t r o d uc t i o n Th ef o l l o wi n gr e p o r twi l la n a l y z egi a ntr e t a i ll e a de r si nt h ema r k e tn a me l yLo u i sVui t t on .Th e r e p o r twi l lc omp a r eZa r aa n dLo ui sVu i t t o n ' ss t r a t e g i e sa ndh o wt h e yu s e dt h e i rs t r a t e gi c ma n a g e me ntt os t a ys u c c e s sa n dg r o wo nt h ema r k e t .

Lo ui sVui t t o n Lo u i sVu i t t o nMo ë tHe n ne s s y( L VMH)i sa nEUba s e dl ux u r yp r o d u c t sc o mp a n yf o u n d e di n t h ewa k eo ft h ea c qu i s i t i o no fF a s h i o nHou s eLo u i sVui t t ona n dMoë tHe n n e s s ywi t hi t s r e g i s t e r e do ffic ei nPa r i s ,Fr a n c e .Wi t hi t sfla gs h i pb r a n d ,Lo u i sVui t t o n,c o mp r i s e sa r o u n d o n eq u a r t e ro fp e r s o na la c c e s s o r i e s ,a n di t sfiv ema i nb r a ndc a t e g o r i e s ,t h a ta r ef r a g r a n c e s a ndc o s me t i c s ,ho r n sa n dj u i c e s ,l e a t h e rp r o d u c t s ,wi n ea n ds p i r i t s .Ac c o r di n gt o2 0 1 4 s t a t i s t i c s , L VMHo p e r a t e si no v e r5 0c ou n t r i e sa n dh a so v e r7 0s t or e sa nd1 2 0 , 0 0 0e mp l o y e e s . ( Qu i n t è ,2 0 2 1 )

Za r a Za r ai sac l o t h i n gr e t a i l e rb a s e di nLaCo r u n a ,Spa i n.Th eb u s i ne s si ss i t u a t e dh e r e .I ti sa l e a d i ngc h a i ns t o r eo wn e db y Ama n c i o Or t e g a ,I n d i t e x Co r p o r a t i o n .Th eb us i n e s swa s l a u n c h e di n1 97 5a n di sf a mo u sf o ri t sf a s h i o nc o n s c i o u sa n dr e a s o na bl yp r i c e dmo d e r n s t y l e s .Themi s s i o no ft h eCo mp a n yi sf o ry ou n ga n df a s hi o n a b l eu r b a nr e s i d e n t si ne v e r y c on t i n e n tt oh o l dah u g ema r k e ts ha r eb ya c t i n gp r omp t l yt ot h e i rne e d s .Si n c ei t si n c e p t i on ,i t h a si n c r e a s e dt oa l mo s t6c on t i n e n t sb yc o nt i n u i n gt oe x p a n dr e t a i lou t l e t sa n do pe r a t i o n s . ( ZARAAu s t r a l i a , 2 0 2 1 )

2 St r a t e g i cl e a d e r s Th ebr a n dZa r awa sb o r nwi t hac l o s ee y eo ni t sc o ns u me r-i t sc a p a c i t yt oc o mp r e h e n d , p r e di c ta n de x e c u t et h ei n c l i n a t i o n so fi t sc o n s u me r sf o rt r e nd i n gmo d ea tr e a s o na bl ep r i c e s . Th eb r a n di swa t c h i n gc l o s e l yho w mo d ee v o l v e sa n dc h a n g e sa r o u n dt heg l o b ene a r l ye v e r y d a y .I td e v e l o p su n i q u ei n n o v a t i o n sa n db r i n g st h e mi ns h o p si nawe e ko rt wob a s e do nt h e l a t e s tt r e n d s .By c o n t r a s t ,i two u l dt a k en e a r l y 6mo n t hsf o rs e v e r a lo t h e rb r a n d st o r e l e a s en e wd e s i g n sa n dc o l l e c t i o n st ot h ema r k e t .( Al i , 20 1 3 )

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Lo u i sVu i t t o ng i v e sav a l u ep r o p o s i t i o n" mo r ea ndmo r e , "g i v i n gc o n s u me r shi g hqu a l i t ya n d o r i gi n a l i t y . I ts e e k st oc r e a t et h es t r o n g e s tb r a n dv a l u ea n dp r i c eb ye mp h a s i z i n ga l la s p e c t so f c r a f t s ma n s h i pa n dp a t r i mo n yt h a ti n c o r p o r a t ehi g hl i vi n gs t a n d a r d s .Bys a f e g u a r d i n gama r k e t s e g me n t ,c o mp a ni e sc a na v oi dc o mp e t i t i o na n d ,wi t ht hef o c u ss t r a t e gya p p r o a c hac o mp a n y c a nh a nd i l yb e a tc o mp e t i t o r s .Un d e rt hi sSt r a t e g y ,L VMH c a np r i c ep r e mi u mp r o d u c t st o c u s t ome r sa n di n v e s ti nq ui c kd e s i g na n dp r o d u c tc u s t ome rc a r ewi t ht o pq ua l i t y ,s o c i a ls t a t u s a nde x c l u s i v i t y .L VMH c a nt he nr e d u c eb u y e rp o we ra n dr e p l a c e me nt s 'a b i l i t y ,b e c a u s e c u s t ome rpr i c i n gt o l e r a n c ei sl i mi t e d,a ndc u s t o me r sr e ma i nl o y a lt ob r a nd e dpr o d u c t s .I nt h e 2 0 t ha n d2 1s tc e n t u r i e s ,t hee x pa ns i onp r o c e e d e dwi t ha ne mp h a s i so nAs i a nma r k e t s .( Di on a ndAr n o u l d , 2 0 1 1 ) Th ec o mp a n yr i s ksk e e p i n gi t sb r a ndnu mb e ro n eora tt o pd u et ot h ehi g h l yc omp e t i t i v e r i v a l r y ,f a c i n ghu g ema r ke t i n gc h a l l e n g e s .Lo u i sVui t t o nh a sh a dt os t e pu ph i sg a mes i n c e d i gi t a lr e v o l u t i on .Th e ya r en o t or i o u sf o rwo r ki n gwi t hr e n o wn e dd e s i gn e r sl i k eMa r cJ a c o b s a ndSu p r e me ,b u tt h e ywe n tt oe x t r e me s .Th e i rde s i gne r sa r en i c h e ,c o n c e n t r a t i n go n l yo n f a s h i on a b l ep e o pl e . Th e r e f o r e ,t h e ye x p a n de dt h e i rp a r t n e r s hi p s wi t h mo de r n me d i a . ( Su d j o n o , 2 0 2 0 )

3 Por t e r ’ sFi v eFo r c e s Fo r c e s Bu y e rPo we r

Za r a Mo de r a t ePr e s s u r e Za r a ' sc u s t ome r si ng e ne r a lr a n g ef r o mt h emi d d l e c l a s st ot h eup p e rc l a s s , t h a tha v es i g ni fic a nt l yh i g h p u r c h a s i n gp o we ra st h o s ewh oa p p e a rt oh a v emo r e r e v e n u e .

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Lo ui sVui t t o n Me d i u m Pr e s s u r e o o o o o

Lo y a lc u s t o me r s Lo ws wi t c hi n gc o s t Li mi t e df r a u d u l e n tp r o d uc t s Di s t i n g u i s h i n gf e a t u r e Un i q u ed e s i g n s

Su p p l i e rPo we r

Mo d e r a t e l yHi g hPr e s s u r e

Lo wPr e s s u r e

I na c c o r d a n c ewi t ht hel i c e n s i n gc o n t r a c t , Za r a o Hi g hr e p u t a t i o n o ffe r ss p e c i a ll i c e n s e st oa l ls u pp l i e r swh i c hwe a k e n s o Su p p l i e r ’ sc od eo fc o nd u c t t hec o n t r o lo ft h es u pp l i e rs i n c et h e ya r er e q u i r e dt o a d he r et oc e r t a i nme a s u r e sr e d u c i n gd e s i gnv a r i a n c e o rde c e p t i o n . Ne wEn t r a n c e

Hi g hPr e s s u r e

Lo wPr e s s u r e

Ev e nwi t ht h el u x u r yc o mmo d i t y ma r k e ta tal e a n i n gp a c e , t h ema i n e x i s t i n gb u s i n e s s e swi t hf u l l c o n t r o lo ft h es e gme n t swi l ln o tp u t n e wfir msu p o nt h i sma r k e t . Lou i s Vui t t o ni st h el e a d i n gp l a y e rwi t h l o y a lc l i e n t swh or e f u s et os wa pt o o t h e rl ux u r yc o mp a n i e s . Me d i u m Pr e s s u r e Mo d e r a t ePr e s s u r e o Lo wl u x u r yb r a n d si nt h e Za r a ' sp r o d u c tl i ne sf o re x a mp l ea r ea ffo r d a b l eh i g h ma r k e t q u a l i t y .Th el e s st h er i v a l r yp r e s s u r ep r o d u c e db yt h e o Ch a n g i n gc o n s u me r r e pl a c e me n tp r o d u c t s , t h eg r e a t e rt h ec o s to f p r e f e r e n c e s wi t c h i n gi sy e ta n o t h e ra s p e c t . o No n l e a t h e rg o o d s

Ne wp l a y e r sa r es t r o n gb e c a u s eo ft h ea pp e a l i n g a p pa r e la swe l la sr e t a i ls e c t o r . I tb r i n g st og e t h e r mu c hmo r en e we n t r i e si n t ot h emo d ema r k e t , p o s i n gahi g hl i k e l yt h r e a t

Su b s t i t u t e s

Ri v a l r y

Mo de r a t ePr e s s u r e

Me d i u m Pr e s s u r e

Th eo d d sa r ef a i r l yh i g hf o rc o n s ume r st os wi t c h b r a n d si ft h e yr e a l l yd on o tl i kep r i c e s .Th ei ma g eo f t heb r a n di smor ei mp o r t a n tt ot h e m. Za r at h e r e f o r e o ffe r squ a l i t yt ha tma k e si tp os s i bl ef o rp u r c h a s e r st o h a v el e s so t h e rc l o s ec h o i c e s . ( Ki ma n dKwon , 2 0 1 3 )

o Ph y s i c a lpo s i t i o ni n g o Op e r a t i n gi ns a mec o u n t r i e s o Hi g hEx i tb a r r i e r s

( Ka s i ,2 0 1 7)

4 St r a t e g i cc a p a bi l i t i e sa n dv a l u ec h a i n Wi t hr e g a r dt oi t sb r a n dv a l u e , Za r ai sr a nk e da mon gt h ewo r l d ' st o p5 0r e t a i l e r s.Th ev a l u eo f t h eZa r abr a n di si n s t e a dd e r i v e df r o mi t sv a l uec ha i na ndi t sc a p a b i l i t yf o rp r o v i d i n gv a l u et o e v e r ys t a g eofs u p p l yc h a i n .Za r ai sama r k e t o r i e nt e ds t r a t e g i ca p pr o a c hba s e do nc u s t o me r s a t i s f a c t i o n .Za r au s e sd a t af r o md i ffe r e n ts h o p st op r o v i d et h ema nu f a c t u r i n gt e a m wi t h 4

r e v i e wso nwh a tp r o du c t sa r es o l d .Thi sa l l o wst hec o mp a n yt oc us t o mi z ei t sp r o v i d i n g fla wl e s s l yt os u i tt h ei n d i v i d u a ls ho p ' st a s t e sa n di n t e r e s t s .Th ed e s i g na n dp r od u c t i o no fZa r a c l o t h e se n do nt h es h e l v e si spr i ma r i l yd r i v e nb yt h ec u s t o me r .Th i si sp o s s i b l ed u et ot h e c on figu r a t i o noft h es y s t e mo ft hev a l u ec h a i n .Thu s ,Za r ac a nc r e a t e ,de s i g na n dd e l i v e ra n y l i n eo fp r o d u c t sg e ti ti nt wowe e k s ' t i me .( Po l e s e ,Mo r e t t aTa r t a g l i o n e ,Sa r noa n dCa r r u b b o, 2 0 11 )

L VMHh a v ec o r ec o mpe t e n c ei np o t e n t i a lma n a g e me nt , b r a n dd i s t i n c t i v e n e s sa n dd i s t r i b u t i o n. Wi t hi ns u c han i c h e ,i tde fin i t e l ys o u g htt od e v e l opas t r o n gr e p u t a t i o nb e t we e nc o n s u me r s a ndi n v e s t o r s ,bu tt h e y ' l lh a v et ob u i l dg r e a td e s i g n si no r d e rt ob r i n gc u s t o me r st o g e t h e r .( Ha , 2 0 19 )

Th es u p p l yc ha i no fZa r ai si n t e g r a t e dv e r t i c a l l yI nb o t hp r o du c t i ona n du p s t r e a ma c t i v i t i e s , Za r ama i n t a i n sc l os ec on t r o lo fi t sfina lp oi nto fs a l e .St a r t i n gf r o m o r i g i n a ld e s i g n, ma n u f a c t ur i n g ,me r c h a n di s i n g ,Za r ah a sa u t ho r i t yo v e rp r od u c t s , wi t ht h i s Za r a ha s ma r k e di t s e l fa st hei n d us t r yl e a d e ri ns u p p l yc h a i nma n a g e me n t .( Zh a n g , 20 0 8 )

Whe ni tc o me st ot h es t r a t e g i cc a pa b i l i t yo fL V,r a w ma t e r i a ld e v e l op me n ta n dt h ee n t i r e ma n u f a c t ur i n gp r o c e s sa r ec a r r i e dou ti nt e r na l l y ,t hi ss u r et h a tt h eq u a l i t yd o e sn o tl o s e p e r f or ma n c edu r i n gt h ep r o c e s s .I to ffe r ss o meki n do fa s s u r a n c et oc l i e nt sa n dt h u sa d d s v a l u e .I ti sa l s oun c o mmo ni nt hei n d us t r y ,i tr e q ui r e sag r e a td e a lo fc o mp a n ya n df u n di n g t h a to t h e r sc a n ' ts p o i l . ( Bo u vi e r , 2 0 1 5 )

5 Co n c l u s i o n Fr o mt h ea n a l y s i s ,t h eb r a n dh a sb e e na b l et oma i n t a i nas t r o n gp o s i t i o ni nt h ema r k e t a mo n g s tt h e s ec o mp e t i t or st h r ou ghc o n s t a nti t e ma n di n n o v a t i o n sd e s p i t ee a r l i e rb r a n di ma g e d i ffic ul t i e s .I t ' si n d e e dc l e a rf r o m t he a na l y s i s .Suc c e s s f ulb r a n d i n ga n ds u c c e s s f u l o r ga n i z a t i o nso ft h eb r a n da l l o wp o t e n t i a lmo d i fic a t i o nswi t h i nt hema r k e tt ob et a k e ni n t o c on s i d e r a t i o n .Wi t ht h ea i m ofa t t r a c t i n g ne wc u s t o me r si n ah i g h l yd i ffic ul ti n d u s t r y , i n n o v a t i v eb r a n ds t r a t e g i e sc o u l db er e q ui r e d.Za r ad i v i d e si t s e l fi n s t e a do faf a s h i o nc o mpa n y a saf a s t mo d ebr a n d .Asac o mp a n yt ha tf u l fil l sc u s t o me rn e e d s ,i tc o nt r i b u t e dt oi t s 5

e x p a ns i o n .I nc on c l u s i o n ,L V ma n a g e dt oa c h i e v ea ni n t e l l i g e n tc o mb i n a t i o no fa u t o ma t i o n a nd ma nu f a c t u r e dp r o c e s s e st ha te n h a n c e dt h er e p u t a t i o no ft h eb r a n d wi t h as t r on g e r r e l a t i o n s hi pa mon ga c c ur a c ya n dp e r f o r ma n c e .

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6 References Ali, A., 2013. Strategic positioning and leadership. Emerald.com. Available at: https://www.emerald.com/insight/content/doi/10.1108/ijcoma.2013.34823aaa.002/full/ht ml Bouvier, R., 2015. Louis Vuitton: Luxury handbags coming off an assembly line?. Technology and Operations Management. Available at: https://digital.hbs.edu/platformrctom/submission/louis-vuitton-luxury-handbags-coming-off-an-assembly-line/ Dion, D. and Arnould, E., 2011. Retail Luxury Strategy: Assembling Charisma through Art and Magic. Journal of Retailing, 87(4), pp.502-520. Available at: https://www.sciencedirect.com/science/article/abs/pii/S002243591100073X/ Ha, A., 2019. Inside’s the LVMH’s Success. Medium. Available at: https://alexha4121.medium.com/insides-the-lvmh-s-success-b9b208d63ebc#:~:text=The%20core %20competencies%20of%20LVMH,and%20products%20and%20distribution %20channels. Kasaila, A., 2016. LOUIS VUITTON ful appraisal April. Academia.edu. Available at: https://www.academia.edu/29788629/LOUIS_VUITTON_ful_appraisal_April Kasi, A., 2017. Porter Five Forces Model of Zara. Porter Analysis. Available at: https://www.porteranalysis.com/porter-five-forces-model-of-zara/ Kim, H. and Kwon, K., 2013. An Case Analysis of Entry in Global Fashion Market : Case of Zara and Uniqlo. International Commerce and Information Review, 15(4), pp.509-532. Available at: https://www.researchgate.net/publication/276882589_An_Case_Analysis_of_Entry_in_ Global_Fashion_Market_Case_of_Zara_and_Uniqlo Polese, F., Moretta Tartaglione, A., Sarno, S. and Carrubbo, L., 2011. An Efficient Value Chain, or a Service Value Network? Best Practices Deriving from Zara. Papers.ssrn.com. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1903967 Quintè, I., 2021. LOUIS VUITTON: A Case Study Strategy for a Possible Brand Extension. Fashion Branding Summative Assessment MA Fashion Design Management. Academia.edu. Available at: 7

https://www.academia.edu/43358214/LOUIS_VUITTON_A_CASE_STUDY_STRATE GY_FOR_A_POSSIBLE_BRAND_EXTENSION_Fashion_Branding_Summative_Asse ssment_MA_Fashion_Design_Management Sudjono, N., 2020. Louis Vuitton: The 166-Year-Old Brand That Keeps Attracting the Young. Better Marketing. Available at: https://bettermarketing.pub/louis-vuitton-the-166-yearold-brand-that-keeps-attracting-the-young-82daedfc7095 Zara.com. 2021. ZARA Australia. Available at: https://www.zara.com/au/en/z-companycorp1391.html Zhang, Q., 2008. Analysis on the Successful Case of Efficient Supply Chain in ZARA. 2008 4th International Conference on Wireless Communications, Networking and Mobile Computing, 46, p.682. Available at: https://ieeexplore.ieee.org/abstract/document/4679487/citations#citations

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