Competitive Advantage at Louis Vuitton and Gucci

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Competitive advantage at Louis Vuitton and Gucci Using the VRIO Framework, we can test resources for their ability to contribute to competitive advantage. | Valuable? | Rare? | Costly to imitate? | Organized? | Competitive implications | Notes | Brand | | | | | Sustainable competitive advantage | Crucial –sets one company apart from the other. | Designer | | | | | Sustainable competitive advantage | Crucial to have a well-known designer, with skills and creativity. | Range of brands | | | | | Competitive parity | Not necessarily a competitive advantage. | Licensing and Franchising | | | | | Competitive parity | No clear competitive advantage. | Retail outlets | | | | | Competitive parity | No clear competitive advantage; since all of these brands have strong and well-located stores. | Location | | | | | Competitive parity | Not deliver competitive advantage. | After analyzing the table, we can conclude that only brand and designer are sustainable competitive advantages of the luxury goods companies. According to Prahalad and Hamel, the key resources to achieve competitive advantage are skills and technology, called core competences. For Kay, the most important resources to obtain competitive advantage are the ability to innovate, reputation and architecture. It is clear that all these resources are inherent to these fashion houses. For example, Louis Vuitton’s advantages come from its brand investment and innovation, reputation for quality, individual fashion designers and network of relationships with both suppliers and customers. Other industries should take some useful lessons from the strategies used in this one. Therefore they should have high quality products combined with high service levels, control and monitor the use of licensing (to avoid brand dilution), control over how the brand is presented through

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