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Lmvh Case Essay

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Below is an essay on "Lmvh Case" from Anti Essays, your source for research papers, essays, and term paper examples.

Increase in new product introductions
Very poor forecasting of demand
Rapid pace of new product introductions leading to 20% avg growth in 3 years
Unprecdictability of customers inspite of market research
Opportunity cost of stores being out of products customers wanted had to be very high
20%   operating margin
10% net margin
1987-2005   the annual growth rate of 12% operating profit45 % above industry average 25%
Estimate COGS 15% of goods sold
Logistics 13 %       margin 14 %
Countries raw materials   were purchased – France and neighbouring European countries
1200 SKU – Stock Keeping Units
8 Facilities – 6 – France, 1 – Spain, 1 – US
3600 labour force
6-8 weeks supply to be delivered
2.5 month of raw material inventory
Made to order trunks   - 110 hours each -12,000 euro /each
24 people – 120 bags / day
Avg cycle time for bags – 6 days
In France the products remained in the storage for a month at cergy-pontoise
2% of all fashion related ,short life cycle products had to disposed every year
Senior manager view – Anticipate Demand
                                        Should have less hurry to stack stores up
5 back up warehouses across the world
Distribution:
230 stores in 1998 /   340 stores in 2005
Each store size – 450-500 square feet
1600 sq feet store in paris champs elysees 6th most visited monument in france
Every month the store manager draws an estimate of their replenishment of of requirement.
Ship and Arifreight to avid long delivery overdue
Marketing budget – 20% in 2005
Advertising -5 %
Problems:
Air traffic reduce after 9/11
Product availability / new product introductions
Takashi Murakami – japanse design
Customer behaviour : 8 /100 did not find what they were looking for
                                  10 % dissatisfied bought something else immediately
                    20 % postponed their purchase
40% dissatisfied customers
1 out of 5 did not find what they were looking for in Tokyo store
Stores...

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