MB221 Strategic Management Assignment Sample

Introduction: MB221 Strategic Management

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The LVMH Group, created in the year 1987, currently comprises more than 75 particular Maisons, every one of which makes high-quality goods. It is the sole organization to have an interest in each one of the five main categories of the luxury market, including spirits and wine, clothing and leather products, fragrances and beauty products, watches and orntal jewellery, and specialized retailing. Organizations must traverse an ever-changing climate in the field of strategic leadership that is impacted by a variety of factors from internal resources to outside market conditions. Louis Vuitton Mot Hennessy (LVMH), an essential competitor in the around-the-world premium market, is a fascinating example of this intricacy. The work explores the key competencies of LVMH, critically evaluates its business plan brilliance and employs conceptual frameworks to shed light on its strategic leadership techniques which encourage both the company's accomplishments and troubles.

A. Critically reflecting strategic management process referriong strategy, culture, ethics, structure, resources and environment.

The effort to look for commonalities by LVMH shows that planning serves as the company's direction. Its luxury empire strategy displays an intelligent merging of different companies underneath one umbrella in an effort to attain efficiencies of magnitude and breadth. Yet, the company's cultural compatibility will influence the extent to which this approach works. In order to avoid the loss of separate opinions, a combination of different corporate identities needs thoughtful leadership. As an outcome, the connection between both culture and strategy demands continual modification and discussion. In this environment, morals stand out as an essential component that determines the longevity of success. The standing of the market for luxurious goods depends on opinions concerning genuineness and ethical behavior (Walldén and Larsson, 2022). Continuity and customized must be carefully balanced since LVMH is effective in several locations with various ethical guidelines. The complex nature of moral issues in an international luxury conglomerate can be seen by its conduct that moral lapses may underpin its reputation and have a bearing on the globe as a whole. Strategic planning seeks is accomplished partially via organizational dynamics.

Contrary to common sense, a distributed system that frequently fosters innovative thinking and imagination might actually work against benefits by promoting barriers. For workers to properly distribute resources and work together, the structure of the organization has to be established in accordance with the company's strategy ambitions. Discussing of materials, this situation reveals how important it is to choose them effectively with the goal to encourage connections (LVMH. 2023). The distribution of assets effectively needs to happen to maximize collaboration whilst preserving branding independence. At the same time when consumer choices, economic conditions, and international pressures change, factors related to the environment also have a significant impact. The on-going process of planning strategies is highlighted through LVMH's capability to anticipate and respond to these modifications from outside.

B. Evaluating theoretical perspectives on strategic management and their implications.

The conventional perspective serves as a background for LVMH's first approach to merging many distinguished companies under one roof. This strategy is similar to a classic multinational plan of action, focusing on the achievement of efficiencies pertaining to size and range. However, the luxury goods company's constantly and swiftly evolving character makes the viability of this kind of fixed approach problematic. For LVMH to stay important premium tastes and client tastes have to constantly shift. The strategy known as the resource-based viewpoint (RBV) sheds light on LVMH's focus on utilizing special assets and expertise throughout its portfolio of companies (MacKay, et.al, 2020). The primary principles of RBV are most clearly demonstrated by the conglomerate's capability to utilize the innovative abilities of numerous premium brands while pooling supply chains and operational experience.

A strategy's performance requires discovering and creating specific to a brand's capabilities as well as guaranteeing that those capabilities are in agreement with larger corporate goals. Considering a point of view of evolving capabilities, LVMH's capability to quickly switch personnel and modify the personality of its product lines stands out. A fundamental set of flexible capabilities can be seen most clearly by LVMH's capability for responding rapidly to new fads or political upheavals as the luxury market changes. The challenge though, is finding an acceptable compromise between maintaining individual brand characteristics and increasing efficiencies. To be able to incorporate various points of view, LVMH's tactical leadership requires careful negotiations among planning and adjusting. Organized distribution of resources is informed by the classic viewpoints while recognizing the luxury industry's aversion to predictability. The RBV guides the discovery of unique brand benefits and these are essential for maintaining profitability. The continually evolving possibilities perspective encourages LVMH to encourage a culture of innovation and quick response to the constantly evolving luxury marketplace.

C. Analysing nature of strategic management processes in organizational and industry contexts

The Louis Vuitton Mot Hennessy (LVMH) case shows how strategic oversight procedures are constantly changing and contentious throughout both corporate and commercial contexts. The combined effect of numerous internal as well as external variables that influence strategic choices and their results contributes to this multiplicity. The journey of LVMH demonstrates the changing dynamics of managerial strategy. Rapidly changing customer tastes, technology and global developments are all having an effect on the market for expensive goods. To its long-term viability, LVMH needs to be able to adapt this uncertain market (Wan, 2023). A prime example of the company's adjustment to evolving standards in the sector is how it responds to the altering customer preference around environmental and moral activities. This constantly changing structure demands on-going attention, instruction, and an ability to change techniques at the current situation. Incompatible opinions and passions inside and beyond the walls of LVMH give conception to problematic features. Within a company, each luxury brand that falls under LVMH umbrella might have unique tastes and ambitions.

Organizational conflicts regarding how to allocate of resources and tactical goals might result from trying to strike compromise brand individuality with the business cooperation. On the outside, LVMH operates in an atmosphere that can often be defined by conflicts and conflicts of authority. Customers concerned about diluted brand equity might oppose the search for collaborations, as demonstrated in mergers and transactions. The difficult aspect also encompasses issues of morality. The market for expensive goods is currently under investigation for its ecologically sound and ethical behaviour. This rivalry encompasses additional stakeholders outside of the company, with the value buyers, thereby authorities, and consumers. Sometimes might oppose and limitations in regard to strategy as a result of the pull and push among these competing concepts.

D: Critiquing theoretical explanations for organisation success and failure.

The approach, which is frequently utilized to assess the appeal of an industry, could fail to properly take into consideration the unique characteristics of the luxury industry. Because LVMH has strong brand power, evaluation gets put to challenge by the sudden changes in buyer preferences and worldwide occurrences. Furthermore, this structure fails to particularly take into consideration the collaboration among industries and shared resources which are apparent in LVMH's strategy (da Silva, 2022). Owing to the conglomerate's unique architecture and plan of action, it may be challenging to articulate LVMH's success provided its requirement for coordination among its internal and external components. A universal approach based on environmental fit is hampered by LVMH's concurrent attempt to achieve trademark independence and cooperation. If the framework is used in industries that exhibit both strong rivalry and collaboration, its portability could be affected.

E: Evaluating core competencies of an organization

Due to its unique fundamental qualities which permit it to keep an edge over its rivals, LVMH Moët Hennessy Louis Vuitton is now an international player in the field of luxury products. The outstanding brand leadership and ingenuity of LVMH are what really stick apart (Chatterjee, 2020). The business has an unmatched capacity to develop and enhance its wide range of high-end companies, which include clothing, leather products, fragrances, beauty products, and others. Achievement with labels such as Givenchy, Christian Dior, as well as Louis Vuitton serves as examples of this competence. By consistently pushing the limits of design as well as innovation, LVMH creates patterns that influence the market.

LVMH specializes in its ability to penetrate markets and expand globally. The business's strategic strategy enables it to target certain markets and successfully acquire them. LVMH makes the most of its existence in places including Asia, Europe, as well as the Americas by skillfully focusing on specific customer categories and adjusting to regional needs (Hughes, S., Erickson, 2019). These competencies are essential for capitalizing on the rising worldwide need for high-end items. The management of LVMH's enormous network of suppliers and manufacturing operations is a key capability. In order to maximize quality as well as financial effectiveness over an extensive variety of product groups, the firm effectively organizes procurement and production. The constant perfection connected to LVMH's trademarks is a result of this oversight of manufacturing.

The corporation is an expert at retailing and distributing. The business maintains a close relationship with its customers because of the massive number of retail locations it manages, which includes premium boutiques as well as duty-free storefronts this all-encompassing route to distribution promotes client retention, increases visibility for the company, and boosts sales (Chen, 2022). A further significant attribute of LVMH is its ability to make investments that are prudent. As observed by its controlling stake in Bvlgari, Sephora along with various other notable brands, it has the capacity to recognize attractive brands as well as businesses for purchase, which fosters growth and diversity.

F: Strategic management process by applying different theoretical lenses to practical strategic management simulations and cases.

By looking at LVMH’s strategic planning procedure via the prisms of the Resource Based View (RBV) Strategy, Dynamic capabilities theory, as well as the model of VRIO, it is possible to fully comprehend the company's competition in the field of luxury products.

Resource-Based View- The extensive and varied resources of LVMH give it an edge over its competitors. This hypothesis highlights that special and valued assets that are challenging for rivals to imitate provide an organization with a prolonged edge in competition (Gordon, 2023). The renowned high-end businesses in LVMH's collection, the talented creative and manufacturing groups, the extensive worldwide distribution system, and the solid vendor connections are all important, uncommon, and incomparable capabilities. This distinction from competitors enables LVMH to provide greater quality, structure, and consumer encounters.

Dynamic capabilities theory- The innovative skills of LVMH, such as the capacity to recognize, seize, and adapt to possibilities in quickly shifting surroundings, are also credited with its accomplishments. According to the argument, businesses need to constantly develop and adjust if they want to stay ahead of the competition. Tactical agility, as seen by LVMH's capacity to quickly incorporate obtained brands as well as adapt to altering customer tastes, is a clear indication of the company's flexible skills. Because of its flexibility, LVMH is able to modify its collection and goods available to meet market needs, putting it one step above its rivals.

VRIO Framework- The value, uniqueness, inimitable nature, and organizational encouragement of capabilities as well as assets are evaluated using the VRIO paradigm. The assets and abilities of the company fit the VRIO requirements nicely in this situation (da Silva, 2022). Their brand collection, which includes Louis Vuitton, DIOR, among others, significantly enhances the value of its products. It is clear how uncommon its excellent creators, artisans, and retailing professionals are. Because of their intricacy and cultural context, such assets are challenging to replicate, providing a prolonged edge over rivals. Through on-going investments in development, creativity, and strategic alliances, LVMH's managerial assistance strengthens its strengths and preserves its ability to compete.

Conclusion

By summing up the report Louis Vuitton Mot Hennessy (LVMH) is a vibrant example of effective leadership in the constantly evolving environment. The path it takes is illuminated by fundamental abilities and theoretical perspectives integrated. The accomplishments of LVMH emphasize the significance of flexible strategies that incorporate various abilities creating an ensemble of competence within the complicated interactions of the luxury goods sector.

References

Books and journals

• Chatterjee, A.B., 2020. Strategic Analysis-Understanding the Global Luxury Brand A case study on LVMH. Asian Journal of Multidisciplinary Studies, 8, p.5.
• Chen, S., 2022, December. The Financial Statement Analysis of LVMH. In 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022) (pp. 678-688). Atlantis Press.
• da Silva, H. D. G., 2022. Diversification in the Personal Luxury Goods Industry: A Case Study of LVMH and its Peers Financial Performance and Mergers and Acquisitions Strategies.
• da Silva, H.D.G., 2022. Diversification in the Personal Luxury Goods Industry: A Case Study of LVMH and its Peers Financial Performance and Mergers and Acquisitions Strategies.
• Hughes, S., Erickson, S. and Rothberg, H., 2019, September. Knowledge assets and competitiveness in fashion industries. In European Conference on Knowledge Management (pp. 528-XIX). Academic Conferences International Limited.
• MacKay, B., Arevuo, M., Mackay, D. and Meadows, M., 2020. Strategy: Theory, practice, implementation. Oxford University Press, USA.
• Walldén, R. and Larsson, P.N., 2022. Joining the adventures of Sally Jones–Discursive strategies for providing access to literary language in a linguistically diverse classroom. Linguistics and Education. 72. p.101121.
• Wan, Y., 2023. The Impact of the Rising of LVMH. Eximia, 9, pp.169-176.

Online

• Gordon, J., 2023. Resource Based View (Strategy) – Explained. Online. Available through: < https://thebusinessprofessor.com/en_US/business-management-amp-operations-strategy-entrepreneurship-amp-innovation/resource-based-view-strategy-explained>.
• LVMH. 2023. Online. Available through: <https://www.lvmh.com/group/about-lvmh/model-lvmh/>.