Essays on Strategic Planning and Management: An Analysis of the Internal Resources of LVMH Case Study

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The paper "Strategic Planning and Management: An Analysis of the Internal Resources of LVMH" is a good example of a management case study. This essay is about the internal resources and capabilities of LVMH, a French luxury goods corporation. The essay looks at three things about the internal resources and capabilities of the organisation. The first one is the type and nature of the resources and capabilities of the company. The second one is the manner in which the resources and capabilities of the company are valuable, rare, inimitable and related to all the other aspects of the organisation.

This approach is based on the VRIO framework. The importance of using this approach in the essay is that the manner in which LVMH uses its different resources and capabilities to create and maintain a competitive advantage in the personal luxury goods industry is explained. LVMH is a conglomerate that comprises over 60 different brands of personal luxury goods. The origin of the company can be traced back to the 18th century following the launch of Louis Vuitton, a company that specialised in the manufacture of designer travelling bags in France (Mahbubani, 2013, p.

2). LVMH was born back in 1987 following the merger of LV and Moet Hennessy, a larger competitor at the time (Mahbubani, 2013, p. 3). A series of acquisitions and aggressive expansion projects have enabled the company to grow in terms of operations and market share to become one of the largest four companies in the global personal luxury goods industry (Frynas & Mellahi, 2015, p. 31). The performance of LVMH in the recent past has been good.

For example, it has been noted that the company rode on the wave of growth of the global personal luxury goods industry to perform well between 2010 and 2012 (Goldberg & Sehl, 2012, p. 22). Furthermore, the financial results of the company indicate that revenue and profits from recurring operations have been growing over the past three years consecutively (LVMH, 2015, p. 2). This, therefore, reflects the positive performance of all the five business segments of the company (fashion and leather goods, wines and spirits, perfumes and cosmetics, watches and jewellery and selected retailing) over the last few years. Organisational resources and capabilities of LVMH The concept of the resources and capabilities of an organisation is part of the resource-based theory of the firm.

According to this theory, an organisation is able to perform better than its rivals in its industry because of the manner in which it utilises specific attributes and resources that are at its disposal (Pringle & Kroll, 1997, p. 74). Resources are defined as the assets that a company is in possession of (Hubbard, Rice & Galvin, 2014, p. 107).

On the other hand, organisational capabilities are the activities and processes that a company uses to create value for its customers by exploiting its resources (Hubbard et al. , 2014, p. 107). The resources and capabilities of a company can be categorised into the following three classes: physical, human and organisational (Pringle & Kroll, 1997, p. 73). Physical resources are related to the tangible assets that are owned by an organisation. Human resource capabilities are related to the value that the employees of an organisation offer for the benefit of the organisation.

Lastly, organisational resources and capabilities are related to the manner in which an organisation approaches its operations.

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