There are 4 companies that LVMH can select. By anlyais the companies’ target market and business definition will decide a strategic approach to the selected company.
Tesla is an global auto company. Tesla currently operates in 35 countries. Also the Tesla has a good brand reputation which …….?????.The price of Tesla model S and model X is relatively high. We consider Tesla as high-end product. The tesla cusomers are match LVMH’s target segment.We have reason to believe, Tesla can LVMH joint name product will attract more customers. Tesla’s current gross margin is 22% that is lower than LVMH’s margin.
The related Group
Related group is a real estate company. It is hard to determine the target market. Also LVMH has similar project. “Fendi apartment.” Since LVMH is new to real estate market, for now LVMH is trying to aviod the product cannibalism. LVMH won’t work with related group.
Uber is daily use app. That is confilict with LVMH luxury brand image. LVMH won’t select Uber.
Wholefood is focusing on organic food product. this is the high end grocery store. Wholefood gross margin is 34.9%. Compared with other grocery store (25%) the gross margin of wholefood is high. For now wholefood only operate in several countries. Which is the disadvantage for wholefood. LVMH may need to think more about it.
LVMH will select Tesla as our partner with Non equity strategic alliance.
Point: No margin and acquisition
Tesla gross margin is too low, disadvantage for LVMH
Tesla is auto industry LVMH has no experience in the field, risk increase.
Merger and acquisition will give LVMH more control on Tesla. However, that will cost more problems. After merger and acquisition, the company may facing orgianziation culture conflict problem. There are 4 situation may happen, 1. Culture takeover: Strong culture take over weak culture. 2. Culture blending : combine two culture. 3 Cultre pluralism:leave each other alone, but that is hard for CEO. 4, Culture resistance: two strong culture refuse to take each other. For LVMH and Tesla, they both have strong culture. That will be hard to mange the company culture. that is time and financial consuming. Since 2015 LVMH just spending a lot on sturcture management. To reduce the risk LVMH currently don’t want to do larger margin an organziational change.
1) Select a company from our class and decide an a strategic approach that should include one of these:
– Equity Strategic Alliance
= Non Equity Strategic Alliance
2) Tell me why you selected the company and the strategic approach — VALUE to your organization.
3) Conduct a SWOT analysis on your strategic approach using the Broad Environment, Task Environment and the organizational assessment (look at the Appendix in the book pages 183 – 187 to prompt your thinking).
4) Write a strategic plan to reflect your new strategic approach including the revised strategic direction, identified opportunities and recommendations (look at the Appendix in the book pages 188 – 190 for guidance)
Each person will have up to 15 minutes to present and the presentation should be taped and projected on the due date. In addition, please submit your PowerPoint slides to me on 7/8/2016. Feel free to use as many slides as you need to tell me and your follow executives — your persuasive story. Although you will be showing a video, attendance is still required.
If use outside source, citation required (MLA) by using footnote.
I have a Bachelor of Arts, majoring in English and minoring in History.
I have worked in various fields ranging from academic research to freelance translating to editing to customer support and data entry. These include editing my old university's newspaper as well as co-leading their creative writing team; serving as a junior member in the history department's research network; publishing music and film reviews for several different magazines and webzines; and translating papers and books for numerous researchers in various languages, including Russian, Spanish, and Romanian. I am also a skilled typist, with a rate of at least 70 words per minute, and have myself digitized dozens of books and essays for both private and commercial use.
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I have a background of 8 years in writing profession and currently pursuing also as an editor and proofreader. I have a knack for writing and thus, it was obvious to enhance my skills and serve others. Currently joined ‘Member of Association of Professional Writers and Editors’ a