Louis Vuitton environmental analysis

1. Page 1
An Environmental Analysis for
Louis Vuitton
Gilberto Pena
Full Sail University
Project & Portfolio II: Business and Marketing
10/13/2019

2. Page 2
The STEEPLE Analysis
PROVIDE at least one observation for each of the seven elements of the STEEPLE analysis
(you can make more). These should be full paragraphs that include explanation and detail.
These observations should also help you to make statements that go in the SWOT chart, below.
Remember to put a “short form” citation in APA format after each observation here and list the
corresponding APA “long form” reference in the Reference section at the end.
Keep the focus on the division/brand. You may observe something that affects the parent
company or the industry, and which will affect the division/brand, too. It’s okay to include those
observations, but always remember it’s the division/brand you’re working for. Not the parent.
SOCIOLOGICAL:
The luxury buyers are shifting to a different direction that Louis Vuitton was not expecting. Logo-
free pieces is shared by a growing number of wealthy shoppers, who prefer to search for
unique, hard to find pieces instead of highly recognizable handbags from big recognizable
brands such as Louis Vuitton.
The inclination for more discreet luxury goods is also being moved by the political debate about
income inequality, which is leaving some big spenders worried that it is very offensive to carry a
purse that practically announces its four-figure price tag in times were income inequality is
growing. As Louis Vuitton, is trying to boost their sales, luxury consumers are also spending
their dollars into experiences rather than on goods. Things such as an extravagant island
vacation or dinner at Michelin-star restaurant. (Halzack, S. 2015)
TECHNOLOGICAL:
Luxury is a synonym with Louis Vuitton and needs to serve like so. We live in a world where
technology reflects purchasing power and exclusivity. In 2017 Louis Vuitton wanted to reflect
their traveler’s heritage with the release of the Tambour Smart Watch and the Horizon
Earphones because they travel with you.
These accessories are equipped with Bluetooth technology. Created to take phone calls, listen
to music, multitask and be alert without the look of popular Air pods. But with the exclusive
design that Louis Vuitton grants. The traveler’s location is now synchronized with hot spots in
more than seven capitals worlwide. (Wiliam, T. 2019)
ECONOMIC:
Despite a noisy year in global stock markets and trade tensions. There is only one branch of the
world economy that came out of 2018 literally unscathed: the luxury goods sector. LVMH, the
world’s largest luxury conglomerate, posted a record revenue of $53.4 billion, this was a 9%
increase from 2017.18% of the sales, which are $9.6 billion, were net profits. Sales from Louis
Vuitton alone reached $11.4 billion for the year. Spending on Louis Vuitton by Chinese
consumers was a boost for the company. Domestically or on vacations, Chinese consumers
double digits on spending in the fourth quarter of 2018. (Observer, 2019)

3. Page 3
ECOLOGICAL:
Louis Vuitton is in the process of implementing a responsible sourcing program for all raw
materials. In 2018, Louis Vuitton reached the LIFE 2020 target of 70% of leather goods
tanneries becoming Leather Working Group certified. At the same time, the House’s jewelry
activities have obtained the Responsible Jewelry Council certification, and diamonds are
certified by Kimberley Process as conflict free.
Louis Vuitton is finding new alternatives to raw materials that bring an equivalent or higher
quality but with the goal of lowering environmental footprints. The LVMH Eco-Material Library is
working on educating creative teams on the use of innovative and eco-friendly materials. one of
Louis Vuitton strong commitments, is making sure these processes of cutting raw materials
keep improving to limit waste in design and production. (Louis Vuitton, n.n.)
POLITICAL:
Louis Vuitton is just finishing their new factory in the U.S outside of Fort Worth, Texas. A large
ranch just outside of Keene, about 28 miles south of downtown Fort Worth, has been purchased
by Louis Vuitton for construction of a leather goods workshop to make luggage and purses. The
factory is expected to be open by the end of 2019 and will employ up to 500 people. Louis
Vuitton will receive a 45 percent property tax abatement in its first year and, once the company
has 500 employees, it will receive a 75 percent abatement for 10 years. Vuitton's $1.1 million
state grant will be used to improve roadways, according to this article. The Construction of the
plant is expected to cost about $20 million. (Nix, M. 2019)
LEGAL:
In January 2016 LVMH lost for the first time in the District Court. Louis Vuitton filed formal
claims for trademark dilution, violation of fair use, trademark infringement and copyright
infringement, against My Other Bag. This brand introduces itself as an “eco-friendly canvas bag
with a designer twist”. And its products price in a very low range from $28 - $55 compared to
Louis Vuitton. The article states: “obvious differences in My Other Bag’s mimicking of Louis
Vuitton’s mark, the lack of market proximity between the products at issue, and minimal,
unconvincing evidence of consumer confusion compel a judgment in favor of My Other Bag on
Louis Vuitton’s trademark infringement claim.” (Forbes, 2016)
ETHICAL:
Louis Vuitton views protecting the environment as not simply an obligation, but as source of
competitiveness. Vuitton's success over the years has depended directly on preserving and
respecting the natural resources they use to make their products. Taking environmental factors
into account in their production processes makes their products more reliable and appealing for
consumers. As well as setting the example for their competitors. Louis Vuitton social
responsibility is based in the principle of respect for people and their individuality. The brand is
committed to making excellence a tool to show their social and professional commitments in
solidarity with their host regions and communities. (Louis Vuitton, n.n.)

4. Page 4
The SWOT Analysis
Provide at least three statements in each of the four sections of the SWOT chart: Strengths,
Weaknesses, Opportunities and Threats. Include explanations and details within the chart that
make your points clear. A phrase is not enough. Each point should be a short paragraph.
HELPFUL HARMFUL
INTERNAL
STRENGTHS
1. Strong brand with global
presence: Vuitton’s logo and
monogram canvas are worldwide
recognizable. The company is
named as the world’s most
valuable luxury brand for
consecutive years since 2016 to
2018.
2. Exclusive products: Vuitton’s
products are highly priced due to
their excellent quality and by the
high level of exclusivity. It works
with the best designers in the
industry to deliver unique and
scarce products.
3. Solid financial performance:
LVMH, the world’s largest luxury
conglomerate, posted a record
revenue of $53.4 billion, this was a
9% increase from 2017.18% of the
sales, which are $9.6 billion, were
net profits. Sales from Louis
Vuitton alone reached $11.4 billion
for the year. (Nix, M. 2019)
WEAKNESSES
1. Reduced customer market: Louis
Vuitton target market is very
limited due to the fact that
customers consist mainly of the
elite and high-income class who
want to be distinctive from others,
to have that exclusivity status. In
other words, the wealthy 1% of the
population is their only client.
2. Centralized decision making:
Even though Louis Vuitton is the
only brand spending more than
average in research and
development within the industry,
decisions by teams need to be
approved by certain officials. This
reduces the efficiency in
operations by making them more
time consuming. It also leads to
reduced innovation.
3. Brand relies on a strong
economy: Based on its unique
target market, Vuitton’s sales rely
on a strong economy for
consumers to have purchasing
power. If the economy is
depressed, the sales growth slows
down sharply.

5. Page 5
EXTERNAL
OPPORTUNITIES
1. New digital era: Exploring the
digital media space for brand
advertising. There is an
opportunity for Louis Vuitton to
expand their presence online; by
using the internet to interact with
its customers. Louis Vuitton can
use social media to promote its
products, connect with customers
and collect feedback from them to
monetize those connections.
2. Environmental policies: Now that
the world is very concerned for our
environment searching for new
ways to protect it. It is a great
opportunity for Louis Vuitton to
invest in new technologies that can
help reduce pollution in the making
processes of a product or perhaps
to develop a textile to avoid using
animal furs and preserve the
species.
3. Reducing cost of marketing
in international markets: A
new electronic commerce
business model can help Louis
Vuitton to reduce the cost of
entering new market and
reaching to customers at a
significantly lower marketing
budget thanks to social media.
For example: fashion shows.
Vuittion can use media to show
their upcoming collection
around the world without
spending all the money on
shows were the audience is
very limited and can only assist
by invitation.
THREATS
1. Trends: The luxury buyers are
changing their taste to luxury
brands such as Louis Vuitton to
other companies, which offer more
selective products and hard to find
pieces, that grants a more
exclusive product. Rather than
spending on product that is
identified worldwide by its logo and
monogram canvas.
2. Target Market: Vuitton’s target
market relies on the high-income
class between 35-60 years old.
However, every year its customers
are younger people. Vuitton needs
to adapt before it affects their
business model in a matter of time.
3. Regulations: Increasing costs
for working in developed market
because of environmental
regulations Louis Vuitton has to
deal with these costs as
governments are trying to
increase environmental taxes to
promote cleaner options. This
may result into higher logistics
costs and higher packaging
costs for the brand.

6. Page 6
Conclusions:
Findings lead to Conclusions. In two or three well-developed paragraphs, provide conclusions
for the company based on your analysis of the findings. This means talking about the meaning
of your findings. For instance, is there growing negative feedback from customers based on
perceived changes to quality? Then it would be fair to say that the brand probably has a public
relations crisis looming in the near future.
Try to assess the fit of the current market position for your product. How does it compare to its
competitors and its industry as a whole? Where does it excel? Where can it improve? How does
the company’s financial health factor into what it can and can’t do?
With this exercise, you should begin to identify what questions your client hired you to answer.
Note what should be new goals and actions for the future. Note whether there should be any
changes to product/service line, target market or message. You will elaborate in Week 4 when
you make specific, future oriented and actionable recommendations for your company.
Louis Vuitton has many strengths that will help them continue to be a reference in the
fashion industry. The quality of their products can be recognized like no other brand
because they implement different materials and technology in their products that are
only offered by Louis Vuitton. The brand works with the most iconic designers to deliver
unique products every season for different markets around the world. Louis Vuitton
differs from competitors by using high quality raw materials in all of its products, the
company has an empowering position to observe its products quality by marketing them
through its own stores all over the world. Also, there is no other brand that has been
named as the world’s most valuable luxury brand for four consecutive years since 2016.
And the 12th
most valuable brand in the world. (Forbes, 2019)
Louis Vuitton is yet to face some challenges that could be a problem along the way
such as shifts in the luxury consumers trends, shifts in target market and new
environmental policies. Luxury consumers are always on the hunt for exclusive
products. As long as companies like Louis Vuitton do not lose their essence, stay loyal
to their heritage and finds new ways to use storytelling to connect with clients, people
are likely going to buy it. Because Louis Vuitton has the strongest brand presence in the
world and their logo a synonym of exclusivity. (Halzack, S. 2015)
Various companies such as Chanel or Gucci keep growing and innovating year by year.
Vuitton needs to continue to use data gathered from consumers as a tool to keep
developing new products that appeal the client’s concepts of what luxury really means.
In order to continue to be a dominant luxury brand. This can be done by better
marketing of their products so people will connect better with the brand. Overall, Vuitton
shall continue to be the brand that rich and famous will always recognize as a luxury
icon.

7. Page 7
References:
In APA format, list each reference you used (at least five). Each reference in this section should
have a corresponding “short form” citation in the STEEPLE section or the Conclusions section.
Halzack, S. (2015, June 16). Why Louis Vuitton, Gucci and Prada are in trouble. Retrieved
October 10, 2019, from https://www.chicagotribune.com/business/ct-why-louis-vuitton-
gucci-prada-are-in-trouble-20150615-story.html.
Cao, S. (2019, January 31). Amid a Tumultuous 2018, Shoppers Sought Escape By Splurging on
Louis Vuitton. Retrieved October 11, 2019, from https://observer.com/2019/01/louis-vuitton-
lvmh-profits-surge-despite-us-china-fears/.
Teh Sen, W.-L. T. S. (2019, April 8). How Louis Vuitton is slowly blending luxury fashion with
technology. Retrieved October 11, 2019, from
https://www.lifestyleasia.com/kl/gear/tech/louis-vuitton-slowly-blending-luxury-fashion-
technology/
Nix, M. (2019, October 11). Trump's visit to Texas will include stop at Louis Vuitton workshop
in Johnson County, Fort Worth fundraiser. Retrieved October 11, 2019, from
https://www.dallasnews.com/news/politics/2019/10/10/trumps-visit-to-texas-next-week-
will-include-stop-at-louis-vuitton-plant-in-johnson-county/.
Eytan, D. (2017, January 3). Louis Vuitton Loses Lawsuit (Again) Filed Over Allegations of
Trademark Infringement. Retrieved October 11, 2019, from
https://www.forbes.com/sites/declaneytan/2016/12/31/louis-vuitton-loses-lawsuit-again-
filed-over-allegations-of-trademark-infringement/#447c28f120e1.
Vuitton, L. (1n.d.). News By Louis Vuitton:
LOUIS VUITTON REINFORCES ITS COMMITMENT TO THE ENVIRONMENT
. Retrieved October 11, 2019, from https://eu.louisvuitton.com/eng-e1/articles/louis-vuitton-
reinforces-its-commitment-to-the-environment.
Louis Vuitton on the Forbes World's Most Valuable Brands List. (2019, May). Retrieved
October 11, 2019, from https://www.forbes.com/companies/louis-vuitton/#7dd782f06dbe.