strategic Planning for global financial crisis

Many luxury brands have filled for bankruptcy in the last year due to the global financial crisis. Consumers don't have the money to spend on luxury items and therefore brands need to change in order to survive. Big conglomerates such as LVMH should have seen the warning signs of a potential crisis through environmental scanning. Through SWOT analysis LVMH could have listed their strengths, weaknesses, opportunities and threats and planned a long term strategy incase the economy took a turn for the worst. Christian Blanckaert, former executive vice president of French luxury goods Hermes points out "The survivors will be the ones who have a very clear strategy based on quality and who do not fake" (Heraldsun.com). Weaknesses and threats could have pointed out the direction a crisis could come from. Many companies in the luxury world are losing money and if they could have predicted or prepared for a global economic crisis some brands could still be profitable rather than bankrupt.

LVMH vs. E-bay

On February 12th 2010 LVMH won its case against E-bay for selling counterfeit Christian Dior, Kenzo, Givenchy and Guerlain perfume products which the auction site was retailing. This is a social force that can greatly affect LVMH reputation. Many consumers go on E-bay looking to find real luxury merchandise at a lower price but many times buy counterfeit. Not only does this put their reputation on the line but they lose customer loyalty and anger their customers. Customers can potentially believe that LVMH has manufactured the counterfeit creating social disapproval and a bad publicity. It's important that LVMH took this to court because if they didn't address the problem it would appear as if they didn't care about the quality and trademark of the product that hold their designer names. E-Bay was ordered to pay LVMH €200,00.