7 Data.worldbank.org. 2013. Japan | Data. [online] Available at: http://
data.worldbank.org/country/japan [Accessed: 1 Dec 2013]Скрыть
6 million people. That creates very profitable business environment for luxury brands. (World Bank, 2013)1280795251460Source: http://data.worldbank.org/country/japanSubstantial proportion of middle class in Japan is another opportunity. With the change in Japanese consumers mind this creates new space for expansion of the company. In order to keep up with the competitive advantage, Louis Vuitton might want to implement the new strategy and enlarge their target market to the middle class.Japanese women have always perceived the last fashion trends – it is the key factor of their culture and social relation with the fashion. High attractiveness of the female part of the population to a ‘good look’ and specifics of their life style has created an opportunity for the growth of Louis Vuitton in
Показать все Japan.Nevertheless, there are also few challenges that the company has to meet with. The main problem for Louis Vuitton is the sluggish financial situation and the appreciation of Japanese yen to US dollar and euros.As it was mentioned before, special relationship with fashion in Japanese culture and obsession with status-driven brands attracts almost every company that producing luxury goods to enter the Japanese market, hence it has created a big competition. After 2008, low range cloth retailers have entered Japanese market, thus becoming another big competitor for LV. That might be a challenge for the company to keep the same pace in their profit growth.Another big issue for Louis Vuitton is the counterfeiting. There was a huge flow of fake bags coming from China after the Asian Financial Crisis. Since most of the customers are still willing to pay lower price, especially those who are not seeking for the ‘absolute’ quality and high class service, there will be the consumption of fake goods. Hence, Louis Vuitton might want to conduct a project in their R&D department to take actions in order to minimize the flow of counterfeiting products into the Japanese market.Question 3.What are the specifics of the Japanese fashion luxury market?Luxury fashion market is a special one - it conducts the commercial activities or sales in the luxury and fashion goods. Luxury item can be defined as a “highly-desired within culture and society” (Investopedia, 2013), meaning that a person with an average salary would not be able to afford it.However, Japanese luxury fashion market is an outstanding and unique one in this case. First main point that is to be mentioned is that Japanese market of luxury and ready-to-wear goods is the biggest in the world. Also, compared to the rest of the countries, per capita of spending on luxury fashion items is the highest in Japan. That can be explained by one of the specifics of the Japanese luxury fashion market – consumer behaviour. Japanese women are very “beauty-conscious”. (Paul and Feroul, 2013, p.8) The preferences in the fashion and ‘good look’ differentiate from those of the western women. When female part of the population in the United States and Europe would like to wear something rather more comfortable, Japanese women are giving their preferences to the fashion and status-driven brands. Veblen (1994) named this phenomenon as ‘Conspicuous Consumption’, in short, showing the rest of the world that you earn money. They have always been a “group-oriented culture” (Paul and Feroul, 2013, p.8), which has made the Japanese market for luxury fashion goods successful.The big interest of the Japanese consumers and high revenues of status-driven brands lead to the following feature of the Japanese luxury fashion market – high competition. As it was mentioned before, Japanese customers are seeking more for a quality than for a low price, thus making Japan a perfect business environment for luxury brands and attracting them to enter the market. Considering the size of Japan, the number of retail luxury brand stores is surprisingly high. According to the case study it totals 601, including firms such as Chanel, Coach, Gucci, Tiffany & Co, Bulgari, Salvatore Ferragamo and some companies that are included in the LVHM group.Nevertheless, after the economic crisis and appreciation of Japanese yen, the situation in the Japanese market began to change – starting from the revenues of the luxury companies and ending with the consumer behaviour. This situation creates a space for the companies like Louis Vuitton to implement new business strategies in order to stay profitable.Question 4.How did Louis Vuitton enter into the Japanese market originally? What are the other entry strategies it adopted later to strengthen its presence?When a company decides to expand their business globally and enter a foreign market, they have to use the most suitable mode of entry. Скрыть
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