David answered on Nov 30 2019
Research proposal: Opportunity of increasing competitive advantage through pursuing ethical practices in luxury fashion: Louis Vuitton
Table of Contents
9Analysis and discussion of those questions
Louis Vuitton (LV) is considered as the most valuable
and in luxury industry as per the study conducted by Millward Brown. In global world, Louis Vuitton evolved good
and name and gained recognition from New York to New Delhi, thereby positioning itself as ‘Louis Vuitton don’. LV monogram is recognised as the international symbol of luxury. Louis Vuitton, incorporated in the year 1854 as a luxury fashion house and retail company offering wide range products, from luxury trunks and leather goods such as watches, jewellery, sunglasses, etc (Choi & Shen, 2016). The products are sold through standalone boutiques, lease departments, and online website for reaching consumers. For continuously six years (2006-2012). Louis Vuitton is positioned as world’s most valuable luxury
and. The geographical expansion of the company is present in more than 50 countries operating through 460 stores at global level.
Presently, Louis Vuitton is striving for improving its environmental credentials for positioning fashion business and reassuring shoppers that they are in eco-friendly hands. According to 2007 WWF report, Louis Vuitton has failed in adhering with ethical norms therefore expelled from the FTSE4 Good Index Series. The organisation has failed to answer sustainability question therefore expelled from FTSE4 Good Index Series (Siegle, 2009).
As a result, strategic personnel of the organisation realised the need of conducting business through conforming environmental and social criteria. There are several players found themselves in tripping and managing energy consumption, announcing water projects for conserving water usage and phasing out excess waste. In this way, all these efforts are adopted for protecting
and name and accruing sustainable image in the industry. As a result, Louis Vuitton has also started conducting business in accordance to the environmental and social criteria for returning back in the FTSE4 Good Index Series and positioned as ‘an entity adopting constructive look at the social, ethical and environmental issues emerging around the world’ (Siegle, 2009).
In context to ethical practices, Louis Vuitton has started sourcing and reliant on superior and well managed materials ensuring that vested interest in the environment and ecological conditions. The luxury market players started realising the fact that there exists huge market for Fair Trade and ethically produced goods. In the realm of green marketing and environmental sustainability themes, the paradigm of mass affluent luxury goods business has changed (White, 2017). The dedication to ethical production increased among traditional marketers as well in light of the fact that people won’t compromise on the ethical standards and principles. This phenomenon has no longer been a challenging factor for big
ands as strategic leaders started visualising and understanding the phenomenon as an opportunity yielding theme. This is done through approaching and targeting customers with new positioning statements, managing supply chains in ethical and socially responsible manner, reducing costs, and maximising value (White, 2017).
1) What are major ethical policies and actions adopted by Louis Vuitton?
2) In what manner, ethical policies contribute to competitive advantage of the organisation?
3) Do leaders of Louis Vuitton have placed adequate provision for complying with ethical principles and norms?
4) Is there provision of regularly review and monitoring ethical practices?
5) What are the benefits and positive implications of ethical practices to the business portfolio of Louis Vuitton?
Over the past decade, ethical conduct and practices have begun to matter and emphasise a lot in the luxury fashion industry. The affordable and trend-sensitive fashion, which provides good returns and profits, also give rise to many ethical issues. This fact necessitates business firms in developing consciousness of ethical values for balancing the continual need of ever-newer fashion along with dedicated commitment for behaving in ethically and socially responsible manner.
As per the Report of the World Commission on Environment and Development (2011), ethical practices have many definitions, with the three main perspectives to be taken into account. The first perspective asks conducting business activities indefinitely without causing harm, second perspective is based on treating others in the same manner as acceptable to you, and, lastly, addressing cu
ent generation needs without making any compromise for future generations needs. In this way, ethical practices in much more than business firms’ relationship with communities and societies; it’s about manner and extent to which business firm contributes in overall growth and development of communities and institutions (Mulholland, 2007).
Ethical practices involve addressing evolving and challenging environmental dynamics impacting human lives and well-being through intersecting ecological, economic and socio-political dimensions at local and global level. Jennings (2014) has outlined some basic principles of ethical practical for business firms: ‘Respect for people’ is one such principle to be adopted at all levels of the organisation. The community members, supply chain partners, and environment should be addressed in lieu of the fact that resources are finite and profits should be generated after fulfilling needs. With the global reach and geographic expansion, supply chain of luxury fashion industry becomes highly fragmented and inherently complex, as a result, raising ethical issues and demanding fashion business firms to adopt high level transparency and integrity in operations (Jennings, 2014).
Mulholland (2007) argued that fragmented nature supply chain creates difficulties for luxury business firms in integrating components for positioning as ethically and socially responsive. The supply chain of luxury fashion business firm is quite large as it includes suppliers for sourcing raw materials, searching ethically secured source of raw materials, appointing and training labour for manufacturing products, transporting products from factory to retail outlet and ensuring aftercare and disposal of products. Luxury fashion business firms, by its very nature having fast-response system encouraging disposability. The standard turnaround time of luxury fashion business from catwalk to consumer has reduced from six months to few weeks.
The business firms thrive on fast cycles, need of heightened profits, rapid prototyping and designing of products, producing in small batches with large variety, adopting efficient transportation and delivery mechanism and ‘floor ready’ merchandise presented in retail outlets. For retaining consumers and ensuring their frequent visits, high street fashion retailers are forced to routinely search and source new trends in the industry, and, at the same time, frequently introducing new items and replenishing stock at regular intervals. The side effect of this need of continual introduction of new items and rapid turnover, ethical issues are seemingly arising. Admittedly, avid consumers are
owsing luxury fashion business stores once in every three weeks in search of new and trendier styles luring them paying high price, and, gratification of more innovations and trends. This constant stream of ever-improved, innovative, and alluring products resorts business firm in impulsive behaviour and unethical practices (Mulholland, 2007).
In this regard, Thompson (2011) emphasised that luxury fashion business firm’s em
aces obsolescence at higher rate putting fashion business at stake. In detailed terms, limited functional life, fewer options of repair, less scope of modifications in designing as it lead to reduced satisfaction and demand for transient fashion products requires adding new product features in retail shelves. All these trends, somewhere, requires luxury fashion business firms increasing their capacity at exceeding levels. This stretch widens scope of business firms indulging in unethical practices.
In this context, there prevails ongoing debate on ethical and socially responsible practices of luxury fashion business firms and manner in which luxury fashion companies are framing strategies. As per the findings of the report published by WWF on ethical practices of luxury fashion
ands, it is argued that entities have to face criticism on fuelling unnecessary consumption and posing threat to social, environmental and cultural factors. The report findings has made realised the fact to the fashion entities that true wealth is not generated through fulfilling one’s needs, but also of others. Louis Vuitton is adhering this principle through planning business initiatives around ‘5R’ rule (Louis Vuitton &...