Louis Vuitton Porter’s 5 Five Forces: (2022) Detailed Overview

Key Facts

Name Louis Vuitton
Industry Fashion , Personal Luxury Goods Market
Founded 1854
Headquarters Paris, France
CEOs Michael Burke
Revenues 64.2billion,2021
Profit 12.69 billion, 2021
Competitors Chanel,Gucci,Prada,Versace,Hermes




Company Overview:Louis Vuitton is a brand of French luxury goods group LVMH, formerly France based Fashion house producing Luxury goods, operating globally in 5 business segments including Fashion & Leather Goods, SelectiveRetailing, Watches& Jewelry,Perfumes & Cosmetics and Wines and Spirits. It was founded by Louis Vuittonin 1854 by Louis Vuitton and it is valued at US $ 378.88 billion in 2021.Its reported revenues are 64.2billion bounced back  by 44% in 2021, reaching the 9th place in Forbe’s World’s Most Valuable Brands (2020). Its brand value is estimated at $ 124.3 billion in 2022.Louis Vuitton is operating in Asia,USA, France, Europe, Japan and other markets.   Porter’s Five Forces AnalysisPorter’s Five Forces Analysis is one of best tools, widely referred by industry analyst for better strategizing company’s operations reference to the presence of competition in the industry, defined by Professor Micheal E. Porter in 1979,at Harvard Business School.

Louis Vuitton Rivalry among Existing Competitors:


  • Global Luxury Fashion Industry reported a revenue generation of US $ 97.23 bn annual growth rate of 5.62% in Year 2022.Louis Vuitton is facing tough competition from Chanel, Gucci, Prada, Hermes, Versace and other brands.
  • Louis VuittonProduct Segmentation: Louis Vuitton is generated€2billion of revenues in 2021, highest fromFashion & Leather Goods 48%, Selective Retailing 19%, Watches& Jewelry 14%, Perfumes& Cosmetics 10% and Wines and Spirits (9%) respectively.
  • Louis Vuitton Geographical Revenue Share: The biggest market for Louis Vuitton is Asia which is solely contributed€36 billion, 35 % of it’s total revenue in Year 2021.The second largest market is USA with a revenue contribution of €16.59 billion which is 26% of the total revenue. Remaining Market segmentation with respect to total market revenue generation is as follows: Europe €9.86 billion 15%, Other Markets is € 6.94 billion 11%, Japan €4.38 billion 7% and France € 4.11 billion 6% respectively.
  • Chanel is giving tough competition to Louis Vuitton with a reported revenue of 15.6 billion USDand net profit of 5.41 billion USD in Year 2021, which is an increase of 49.6% to previous year.Chanel experienced a double digit- growth in Fashion segment,while giving tough competition to Louis Vuitton in Fragrance – Beauty segment line and Watches – Jewellery line. The COCO CRUSH and J12 drove high sales in watch segment.
  • Gucci is also giving a direct competition by generated a reported revenue of US $ 9.73 billion, with a 31% growth rate in 2021 operating in same geographical locations.
  • Louis Vuitton Strategy: Product differentiation, customer loyalty and exclusively designed premium quality products are the key pillars for Louis Vuitton to keep pace with the present competition.


Louis Vuitton Threat of New Entrants:


  • Strong Brand: Being an established company Louis Vuitton attains strong brand loyalty and customer satisfaction which deters new entrants to enter the market. Louis Vuitton scored 7out of 10 among the “Leading 10 luxury brands most trusted by consumers worldwide in 2022”, mentioned by Statista.
  • Differentiated Product Portfolio: Supply Chain & Economies of Scale: The Company has a diverse supply chain with a portfolio of differentiated products also not easy to design for a new entrant. Louis Vuitton currently hold 5,556 stores globally with 1,746 stores, highest in Asia
  • Multiple High Investment Structure: From Capital Investment in machinery, premium quality raw material, exclusive designing to the patent registration with the close collaboration with celebrities for product endorsement is challenging for a new entrant.
  • Market Share: Attaining market share in such elite customer based at global level is also a challenging factor.


Louis Vuitton Bargaining Power of Suppliers:


  • High End Fashion Industry -Limited Number of Suppliers: The Company sourced premium quality raw material from a large supplier base which reduces the supplier bargain power. Also being an established brand suppliers are attracted to connect such big buyers.
  • Specialized Nature of Industry: The Suppliers offer simple raw material without any specialization so there is minimum chances of forward integration.
  • Sustainable Raw Materials: Louis Vuitton engaged 85% of their raw materials to be certified, while 68% of their sourcing was already certified as of Year 2021.Such companies even influencing and educating the sourcing industry.
  • Concentrated Buyers:The market comprises of few big Fashion Companies also neutralizes any supplier bargain power.


Louis Vuitton Bargaining Power of Buyers:


  • Diversified Product Portfolio&Divided Customer Base: As Louis Vuitton is operating in various business segments with a diversified “Product Portfolio” with a non-concentrated customer base so Louis Vuitton’s customers are highly distributed in various markets, segments and geographical locations which will negate the customer bargain power.
  • High Switching Cost: Due to high brand image & established premium quality provider the cost of switching is high which further neutralized the customer bargain power.
  • Concentrated Number of Big Companies offers a small portfolio to the customers to select the product which further decreases the buying power of buyers.
  • Backward Integration: Due to specialized nature of product portfolio backward integration is very difficult which will not provide any bargain power to the buyers.


Louis Vuitton Threat of Substitute Products or Services:


  • Counterfeit Products: Louis Vuitton is facing the availability of counterfeit products in the market which is still challenging to fight with. In Year 2017 the company adopted 38000 anti-counterfeiting procedures to overcome this challenge.
  • Sourcing Responsibility &Sustainable Raw Material: Louis Vuitton is paying high attention to preserve climate, animal welfare and avoid water pollution. Louis Vuitton declared a commitment to make its raw materials 100% responsibly by 2025 and 0% plastic use by 2030.
  • Post-Pandemic Consumer Patterns: The Company should include casual style to be relevant with post-pandemic consumer patterns and continue it’s athleisure trends.
  • Generation Z: Also it is suggested to focus the generation Z buying patterns. The highest consumer’s base for Luxury apparel market will remain Asia by 2025.






  1. LVMH Financial Indicators LVMHForbes, Louis Vuitton
  2. Statista (November,1,2022).Brand value of Louis Vuitton worldwide from 2016 to 2021(in million U.S. dollars)| Statista. [online]  Statista. Statista.Available at:Statista.
  3. Statista (December,5,2022).Brand value of the leading 10 most valuable luxury brands worldwide in 2022(in million U.S. dollars)| Statista. Statista.Available atStatista.
  4. Macro Trends, December 05,2022,Louis Vuitton Stock Value 2011-2021 / Macro Trends. Available at Macro Trends
  5. Luxury Fashion –WorldwideStatista. [online]  Statista.  Statista.Available at:Statista
  6. Chanel Financial Results.Available atChanel
  7. Statista (November,4,2022).Leading 10 luxury brands most trusted by consumers worldwide in 2022.Statista. [online]  Statista.  Statista.Available atStatista.
  8. CISION PR NEWSWIRE ( JULY 04,2022 )Worldwide Luxury Apparel Industry to 2025 – Players Include Gucci, Louis Vuitton, Chanel and Hermes. Available at CISION PR NEWSWIRE
  9. Louis Vuitton,(2020)  Sustainability Sourcing Responsibly. Available at Louis Vuitton

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