Factors Influencing Luxury Fashion Retailers’ Entry Mode Selection:
A Case Study of Louis Vuitton in China.
[Dissertation (University of Nottingham only)]
The luxury industry is one of the leading industries in the global financial markets and has surpassed other consumer categories with its remarkable performance. Meanwhile, China is predicted to become the largest luxury market in 2015. Therefore, in line with a buoyant market trend, the leading luxury retailers have shifted their focus to Chinese markets, to seize new market opportunities.
This study aims to evaluate the applicability and generalizability of identified entry mode choice frameworks, and relevant decision making factors, which have been developed in the general fashion industry, in the context of the luxury fashion sector. To achieve the research objectives, the single case of Louis Vuitton will be adopted as a case study to explain how luxury fashion retailers select an entry mode when entering the Chinese market, and the relevant decision making factors. Lastly, the paper defines key decision making factors, which are especially important for luxury fashion retailers.
A finding from the case study of Louis Vuitton suggests that the framework of the entry mode choice, developed in a general fashion context, can be used across the luxury fashion sector. However, regarding nine defined decision making factors, since the luxury fashion sector has its own characteristics distinct from the general fashion industry, luxury fashion retailers should be especially cautious about three factors in particular, namely brand equity, country risk and market potential.
Moreover, this paper also reveals the significance for luxury fashion retailers of employing a higher control entry mode to assure the success of transferring brand equity and specific assets across markets.
In accordance with this, future research can focus on depth and breadth in this field, to gain more comprehensive and detailed research results.
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