In 1821, Louis Vuitton Malletier was born in Anchay, France. He moved to Paris, France as a 16-year-old young lad to take a job of an apprentice trunk maker, a position that earned him a lot of respect. Vuitton first opened his company in 1854, wherein the following four years, he began to redesign the trunk (Liu & Zamborsky, 2018). He adopted a flat-top trunk with flat hinges that were suitable and stackable for long distances. For his company to perform favorably, he develops a trunk that comprised of the red and blue striped canvas. The idea of having the canvas was to protect the trunk content from dust and rain, with many customers loving the unique design (Cavender, R., & Kincade). The invented trunk design and material could hardly be copied by the competitors. The business thrived from this unique innovation. The ability to acquire an upper hand in Europe and other places such as India and Egypt enabled Vuitton to be appointed as a trunk maker and official packer for a Spanish countless, Napolean III's wife, and Eugenie de Montijo. His appointment in higher positions enabled his business to grow and strengthened further.
The success of Vuitton was based on three standard approaches, namely, to provide excellent service to customers, to master savior faire, and to innovate materials continuously. His son, George Vuitton, inherited the company after his demise in 1892. The focus of George was centered on innovation. In his tenure, he had invented a five number combination lock that still exists in the company now. George developed the monogram pattern with other complex patterns applied on Louis Vuitton products' canvas (Kim & Ko, 2012). The idea behind every innovation was to counter the ever-rising counterfeiting that affects the firm at all costs. Under George's leadership, the company designed more than a hundred purses, which drove the company towards handbag business. In his guided leadership, the company witnessed a global expansion. Louis Vuitton Company introduced its products to the Chicago World fair in 1893 (Donze, 2017). In 1894, LV Company opened its stores in Buenos Aires, Alexandria, London, and New York.
After the Second World War, Henri Racamier, an astute businessman, was brought by the family matriarch to lead the company. He discovered that most of the value chain was retained by the merchant. Racamier began opening company-owned stores and bypassing the merchants to bring the profits in-house. In the mid-1980s, Racamier was able to bring a rapid global expansion by opening about 95 stores. In his tenure, Racamier made the company brands to diversify by introducing the new technologies (Kanitz & Schade, 2012). He acquires some companies such as champagne house Veuve Clicquot and Givenchy as the top and high-quality products companies. By going public, Racamier was able to acquire a larger capital that was used to fund the ongoing growth. In his reign, Racamier merged the company with Moet Hennesy in 1987. The merger was larger than LV and formed Moet Hennessy Louis Vuitton groups. The two companies agreed to run independently with their philosophy and management. However, Racamier was able to keep his position as an LV leader.
When Arnault took the leadership of the merger, he removed the old executives of Louis Vuitton in 1990. He was able to appoint Yves Carcelle as the Chief Executive Officer (CEO). LV became prosperous once again with a partnership with Marc Jobs. Carcelle and Arnault focused on the efficiency and profitability of the business. In this new leadership, they practice selling via company-owned stores (Whitaker, 2009). They sought to use in-house production, which enabled them to expand the factories in France from five to ten. Arnault and Carcelle bought many distributors where they have direct control of every distribution channel.
Arnault had a different approach as compared to the earlier approach. He argues that when a leader has control over the factories, they stand a greater chance of controlling the quality. Also, if a person can control over distribution, the image of the company can be controlled (Liu & Zamborsky, 2018). By partnering with Marc Jacobs, Carcelle, and Arnault focused on innovation and new product designs that led to creativity and successful products.
The other aspect is that the company decided to manufacture all its products and did not purchase its products from third parties. By expanding its product portfolio to incorporate shoes, it was able to create shoe production stores and facilities in Italy (Cavender, 2018). Also, in-house production help to curb product shortages and hours of storing the products.
By focusing on improving the efficiency of the production system, the company reduced its specialization level of workers and trained employees in different activities that bolster productivity (Thomas, 2007). Arnault and his team were able to reorganize the manufacturing line. Every department in the company worked towards improving efficiency.
The company recruited top creative and design talents as the employees to foster innovation and product design. Creative design in manufacturing processes and innovation of raw materials were vital components in maintaining customers and keeping stiff competition with the rival companies. By recruiting top talents, the company products remained top.
The new strategies that spur the company to success were innovation and design new technology. The concept is similar to the initial intention of the Vuitton of innovating materials continuously. Improving the efficiency of production also comply with providing excellent service to customers (Whitaker, 2009). In other words, also the new approach, in one way comply with the original set rules by Vuitton. Expanding the company portfolio is one of the proven strategies of mastering savior faire.
The global expansion of LV Company was ended by World War II. The expansion was highly affected by the Nazi occupier's effort to move the luxury business and couture houses in Paris, France to Berlin, Germany. Most of the company's stores and factories were closed to render them option-less than to terminate contracts. Although most luxury businesses were capable of thriving after the war, the LV Company could recapture its original status. In 1977, the company had registered a low revenue of about $ 20 million (Longhan et al., 2013). The other challenge the company suffered was the merger with Moet Hennesy. The relation between the two companies deteriorated with constant legal battles and disputes on how the company should be managed. In 1987, Bernard Arnault, a property developer, was bought to bolster the Racamier position against Moet Hennesy to change the merger policies. However, in his new plan, Arnault never had a place for Racamier. Arnault acquires a 45 percent control over the merger, where he was supported by Hennessy and Moet families.
In conclusion, the success of Vuitton was based on providing excellent service to customers, mastering savior faire, and innovating materials continuously. Creative design in manufacturing processes and innovation of raw materials were vital components in maintaining customers and keeping stiff competition with the rival companies. Thus, the approaches had made the company flourish over the years.
Cavender, R. (2018). The Marketing of Sustainability and CSR Initiatives by Luxury Brands: Cultural Indicators, Call to Action, and Framework. In Sustainability in Luxury Fashion Business (pp. 29-49). Springer, Singapore.
Cavender, R., & Kincade, D. H. (2014). Leveraging designer creativity for impact in luxury brand management: An in-depth case study of designers in the Louis Vuitton Moet Hennessy (LVMH) brand portfolio. Global Fashion Brands: Style, Luxury & History, 1(1), 199-214.
Cavender, R., & Kincade, D. H. (2014). Management of a luxury brand: Dimensions and sub-variables from a case study of LVMH. Journal of Fashion Marketing and Management, 18(2), 231-248.
Donze, P. (2017). The Birth of Luxury Big Business: LVMH, Richemont and Kering. Global Luxury, 19-38.
Kanitz, C., & Schade, M. (2012). Markenarchitekturgestaltung bei Luxusmarken - Am Beispiel von Louis Vuitton Moet Hennessy (LVMH) und Armani. Identitatsbasierte Luxusmarkenfuhrung, 103-119.
Kim, A. J., & Ko, E. (2012). Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand. Journal of Business research, 65(10), 1480-1486.
Liu, Y., & Zamborsky, P. (2018). LVMH: Is China Still a New Market?
Longhan, Z., Hong, L., & Shiwei, X. (2013). Production process improvement based on Value Stream Mapping for CY company. 2013 6th International Conference on Information Management, Innovation Management and Industrial Engineering.
Thomas, D. (2007). Deluxe: How luxury lost its luster. Penguin.
Whitaker, M. B. (2009). Louis Vuitton. Oxford Art Online.
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