Business Structure Determines Business Performance
The purpose of this competitive analysis is to elaborate the theme “different business structure will generate distinct business performance” by comparing the two well-known luxury product companies Louis Vuitton Moet Hennessy and Hugo Boss from variety of aspects.
LVMH is a luxury product company which is created in 1971 by the merge of Louis Vuitton fashion house and Moet Hennesy. The headquarter is located in Paris, France. Currently, the sharp rise in sales placed LVMH on the leading position in the luxury product industry among their main competitors such as Christian Dior, Prada, Gucci and Fendi. The major business LVMH is involved in is divided into five divisions: Fashion and Leather Goods, Wines and Spirits, Selective Retailing, Perfumes and Cosmetics Watches & Jewelry based on the share of total profit over the first three quarters in 2012 in descending order.
Hugo Boss is a leading German-based luxury product company in luxury industry created in 1924, which is headquartered in Metzingen. The rapid rise on sales in 2011 ensured Hugo Boss staying ahead of the market and their main competitors. The company runs their business through five main brands: Boss Black, Boss Green, Boss Selection, Boss Orange and Hugo Red. Hugo Boss emphasizes exclusively on retailing menswear business formal and casual, luxurious accessories, sportswear relative to their five brands.
The two companies embrace the similar nature of the products, but they run business quite discrepantly. This paper will aim at deeply differentiating and analyzing the two premium luxury brands based on the components of their business structure: product line, brand segment, marketing model, operation process, organization structure, business system, investment strategy and financial performance. The differences on the setup of business