Assessing The Corporate Structure Within Lvmh Business Essay

Assessing The Corporate Structure Within Lvmh Business Essay LVMH Moà «t Hennessy Louis Vuitton S.A. (Euronext: MC), usually shortened to LVMH, is a French holding company and the worlds largest luxury goods conglomerate. It is the parent of around 60 sub-companies that each manage a small number of prestigious brands These daughter companies are, to a large extent, run autonomously. The group was formed after mergers brought together champagne producer Moà «t et Chandon and Hennessy, a leading manufacturer of cognac. In 1987, they merged with fashion house Louis Vuitton to form the current group The group is controlled by the Christian Dior group, which owns 42.4% of shares and has over 58% of voting rights. Bernard Arnault, majority shareholder of Dior, is Chairman of both companies and CEO of LVMH. His successful integration of various famous aspiration brands into the group has inspired other luxury companies into doing the same. Thus Gucci (now part of the French conglomerate PPR) and Richemont have also created extended portfolios of luxury brands. The oldest of the LVMH brands is wine producer Chà ¢tea d’Yquem, which dates its origins back to 1593 Corporate structure LVMH is based in Paris, France. The company is listed on the Euronext Paris exchange and isa constituent of the CAC 40 index. As of 2008, the group revenues of à ¢Ã¢â‚¬Å¡Ã‚ ¬17.2 billion with a net income of à ¢Ã¢â‚¬Å¡Ã‚ ¬2.318 billion. The group currently employs 77,000 people. 30% of LVMH’s staff work in France. LVMH operates over 2,300 stores worldwide. Its current business plan aims to tightly control the brands it manages in order to maintain and heighten the perception of luxury relating to their products. For example, Louis Vuitton products are sold only through Louis Vuitton boutiques found in upmarket locations in wealthy cities or in concessions in other luxury goods shops (such as Harrods in London). This practice contrasts greatly with less exclusive brands which can be bought in shopping malls around the world (http:// en.wikipedia.org) Shareholders At the end of 2008, the only declared major shareholder in LVMH was Groupe Arnault, the family holding company of BernardArnault. The group’s control amounted to 47.42% of LVMH’s stock (with 42.42% held through Christian Dior S.A. and 5.00% held directly) and 63.40% of its voting rights (58.02% by Dior and 5.38% directly). A further 3.4% of shares were declared as treasury stock, with the remainder being free float .(http://en.wikipedia.org) DEPARTMENTS OF LVMH Wines & Spirits Fashion & Leather Goods Perfumes & Cosmetics Watches & Jewelry Selective retailing (Annual report LVMH-2008) MISION AND VALUES OF LVMH Be creative and innovate Aim for product excellence Bolster  the  image  of  our  brands  with  passionate  determination Act as entrepreneurs Strive to be the best in all we do (Annual Report LVMH-2008) Definitions of Human Resource Management Human recourse management is a strategic and coherent approach to the mana gement of organization’s most valued assets: the people working there who individually and collectively contribute to the achievement of its objectives. (Michael Armstrong, a Hand book of Human Resource Management 2003) The HRM models are The Matching model of HRM Harvard model of HRM Best practice model The contingency model