The internal and external environment at Louis Vuitton

The internal and external environment at Louis Vuitton

An environmental analysis of a company is essential to realize the effect that several factors might have on the company. This analysis enables the company to identify the opportunities and threats to take effective measures (*). An external environment looks into outward factors such as politics, technology, and socio-cultural. Internal environments focus on the employees in the company, the board, consumers, competitors, contractors, and company capital. This paper will look into understanding the internal and external environment at Louis Vuitton.

Internal Environment

Louis Vuitton’s upper and middle management is clear about its brand position, values, and proposition. The management team is very clear about their target market, consumer insights, and what drives their consumers to pick the brand over other competitive high-end brands. The company’s CEO is actively engaged in the store operations as he is dedicated to visiting the stores to understand their consumers better. However, although the company has taken the initiative to understand their clients, they have failed to focus on a younger clientele in their designs and style.

Staff members at Louis Vuitton are involved in promoting the brand as they understand what the brand promotes and how best they can sell it to their clients. The company is also committed to a rigorous training program where the new employees are trained on customer service and the brand for four days, and they later undergo an on the job training for two weeks. During the two-week probation period, the employees do not serve their customers, but they are guided on how to understand the products and the company’s style. After the two weeks, the company employees are incorporated into the company with frequent training every week. Sales associates are also sent to Italy for further training on the brand. Part-time associates are, however, given little attention, and this might affect the brand image when they are interacting with their clients.

In regards to market changes, Louis Vuitton is notorious for its slow responsiveness to market challenges, transitions, and opportunities. This is because the company has limited its diversification to the local strategy in some high-end markets such as Singapore. Further expansions have also been limited as the brand is protecting its exclusive image. In addition to this, there have been minimal developments in terms of product designs for the changing tastes in the market. Advertising styles have also not changed much within the company as the company still relies on magazine advertising and celebrity endorsements.

External Environment

Customers understand the brand’s high-quality products and the high-end personality that is affiliated with the brand. However, there has been an increase in counterfeit products which have affected the brand’s reputation among the loyal customers who will opt for more exclusive and harder to duplicate brands. Some customers associate the brand with an older age group due to their designs; therefore, the younger consumers do not relate to the brand products.

The brand has maintained a competitive position due to its exclusivity and high-end designs. The brand has continued to participate in prestigious fashion shows, sponsoring renowned artists and movies and making appearances on high-end magazine spreads. Engagements like these have driven the company’s sales and has also created trust with its consumers. When compared to competitors like Gucci and Hermes, the brand was ranked the most preferred luxury brand in America.

Conclusion

High-end luxury brands have their target consumers, and they exclusively reach out to them whenever they have a new product. The brand needs to venture out and focus on new markets and a brand line that caters to a younger target market. To reduce the increasing cases of counterfeit, the company needs to engage law enforcement officials to track down the warehouses where these products are replicated.