Lvmh Equity Valuation

In: Business and Management

Submitted By drodrig4
Words 2009
Pages 9
Gucci Group N.V.
Case Brief
Group: Synergy

BI4242 Global Strategic Management
Section 404
Submitted to A. Pattana Boonchoo
November 25, 2005

The mission of the company is to be a successfully managed multi-brand group in the fashion industry, producing luxury products that will be enjoyed by affluent, style-conscious consumers.
Internal analysis:
Performances: After the new CEO get on the stage, the company starts increase its revenue. Now the company use acquisition strategy to growth. And now they already acquire 2 companies YSL and Sergio Rossi.
Current strategies: At the corporate level, the company operates in two directions, which is vertical and horizontal. Horizontally, the company purchased companies in the same industry such as YSL Beaute, Sergio Rossi and YSL couture. This acquisition not only broadens the product lines the company carries; it also provides the company with more specific targets with each of its brands. Vertically, the company has integrated both forward and backwards. It established partnering relationships with some of its suppliers and also tried to gain more control over its DOS (directly operated stores). In integrating vertically, the company is able to more control the entire value adding process, thus able to provide the most value to its customers. Also, they will be able to control costs and the overall image of the brand. Although there are a lot of positive reasons for integration, the company still has to consider factors like management resources and the ability to sustain the profit in the integrated businesses.
External analysis:
(See appendix 1 for detailed five force analysis) The business environment now is derived by change. Thus the fashion industry also has to adapt to changing consumer needs, change in materials used, and change in the competitive environment. In the case of Gucci,…...

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