"When buying any product in the market, there are multiple choices to select from. This isso because each player in the market has a different approach to gain competitive edgeover its rivals, (Arkebauer, J. and Miller, J. 1999.).While a certain section of the marketplayers lower the frills attached and hence makes the products available at a lower price,there are another section who are smaller in size but due to extensive knowledge in just afew areas provide tough competition to the bigger players in the market and there is athird section who are of the elite class like LVMH who focus on creating wonderfulproducts and the higher price they chare make up for the higher costs they incur. Thesethree examples can help in understanding the Generic Strategies as they are applicable todifferent organisation sizes and to products and services across industries, Michael Porter(1985).2.2 PRODUCT MARKET STRATEGY AND MARKET SEGMENTATION:A world leader in luxury goods, LVMH has adopted a global product structure wherethe business?s diverse product categories are separately managed.Since LVMH is ahighly economically integrated multi- national, this structure is suitable for them.LVMH believes that due to their standardized designs and highly recognisable motifs,their global brands unite the elite consumers worldwide. The economies of scale arebenefited by this. As a retails brand, LVMH can expect to save a percentage of thecommercial costs such as shop assistants, rents, advertising each time it doubles insize. To suit their existing offers, LVMH uses marketing to change the customertastes. Simultaneously, the structure aids LVMH build and maintain a link betweenproduct development, customers, personnel, etc. Due to this, LVMH has proactivelykept up with the global market trends.They cater to the high end customers with a larger pocket size mainly. Theircustomers are pf the elite segment of the society. 82.3 DIRECTIONAL STRATEGY:The Directional Strategy of LVMH is simple. They intended to cater to the clientelewho have a larger pocket size that is to the elite market essentially. They would createproducts that signifies the lifestyle and standard of living and hence would be a prizedpossession. The higher pricing would entitle them to recover the higher costs thatwere incurred in the process.Due to the vastness of the establishment, they would believe in using resourcescollectively but the different categories would be managed separately. Their brandwould have such a face value that it would be more of a necessary purchase for theelite rather than a luxury.3. SWOT ANALYSIS:Strengths:? Huge experience pool due to long time existence in the market.?Leading position in industry.? Brand value.? Tremendous reputation.? Strong public relations.? Distribution networks.? High R & D and Innovation.? Loyal customer base.? Unique products.Weaknesses:? Conflict of interest within the company due to diversification of resources.? Luxury goods are sensitive to the economic fluctuations.? Diversification could pose to be a drawback.? Since major part of client base are fixed, market is somewhat restricted..9? High cost structure.? Limitations in the production ability.Opportunities:? The smaller companies get aid from the more affluent ones as the brand nameitself is one.? Rise in demand of luxury products occur due to snob effect.? New buying potential due to new consumer trends, increase in wealth , evolvingmarket trends.? Newer distribution channels help in improving the sale of large product line.? Expansion across the world.Threats:? Changes of trends influence the customer preferences and tastes.? Existence of competitors like Gucci, etc.? Fluctuations in economy like Recession, etc.? Fluctuations in the exchange rates.? Dependence on the suppliers.TYPES OF STRATEGIC OPTIONS:STRATEGIC OPTIONSSTATUS QUO DOWN SIZING CONSOLIDATION EXPANSIONRE ORGANISATION NEW PARTNERSHIPS SEEKING ALTERNATIVE SUPPLIERS10Status Quo: A significant justification is involved for maintaining the status quo of thecurrent resource allocations. The anticipation of unknown and unspecified changes in theeconomy, the market, the consumer preferences, etc can be of great consequences for theintegrity and stability of LVMH.Occasional recalculations, innovations and requiredalterations will help in sustaining the current market and also create opportunities forgrowth. Since LVMH has already established a market for itself, to not tamper with itssettings would be best advisable as consumers do not prefer change. They like things tobe as it is because they are aware of the details. Once a change is implemented, it takestime for people to adjust to it , which again might affect the market for the products.Expansion: Expansion is always a feasible option for any type of business (Sadler, P.2003) and especially with the brand backing that LVMH has, it would be highlyadvisable. The lesser known or newer names could receive the shield effect from thebetter known names till they establish themselves. Since they already follow a diversifiedmanagement of the product categories, the operations would be easier.With ever evolving dynamic market trends, maintaining a status quo would be moreadvisable for a high end brand like LVMH. This is so because they have a much selectedclientele and expanding would mean compromising on various factors to make theproducts within the pocket reach of more people. Through the higher pricing structure,they tend to match the higher costs that are involved in the entire process. These highercosts would not be feasible for the masses and the quality too cannot be compromised onbecause that would ruin the brand name and also antagonise the existing client base. It isalways best to maintain their current status and innovate and improve to serve theirexisting clients better. They could try introducing a more affordable range of products toappeal to the masses but that would compromise on the brand name overall which againwould be suicide when they are already the market leaders. The current dynamics of theestablishment suit their client base. They are aware of what they pay for what product andare happy with the transaction. Thus suitability, feasibility and acceptability factors arealready catered to. 11"