Marketing audit or environmental scanning Essay

Marketing audit or environmental scanning - Essay Example During the contemporary period, it can be noted that organisations operate in an environment that is characterised by both internal as well as external factors over which the company in some cases has very little control.From a marketing perspective, this is referred to as marketing audit or environmental scanning (Lancaster & Reynolds 1999). Both the external as well as internal environments have a bearing on the way an organisation operates. Against this background, this report seeks to critically analyse and explore some of the external as well as the internal factors that affect the operations of LVMH Moet Hennessy particularly in the fashion and leather goods sector using PESTEL analysis, SWOT analysis, Porter’s Five Forces model as well as the TOWS matrix model. It starts by outlining a brief historical background of the organisation in question for the sake of easier understanding then followed by an analysis of the above mentioned tools for scanning the environment in which the organisation operates and this analysis will be limited to the geographical location of UK. In essence, scanning the environment enables the marketing managers of an organisation to be better positioned to know the situation obtaining on the ground for them to be able to gain a competitive advantage. Background According to its official website, world leader in luxury, LVMH Moet Hennessy - Louis Vuitton possesses a unique portfolio of over 60 prestigious and the group is active in five different sectors: wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewellery, selective retailing (http://www.lvmh.com/groupe/pg_mot.asp?rub=2&srub=0). The report will specifically focus on fashion and leather goods sector by Louis Vuitton, a trunk-maker in Paris since 1854 which became a legend in the art of travel by creating luggage, bags and accessories as innovative as they were elegant and practical. Specific focus in this report will be limited to the activities of the organisation in UK especially on how the micro and macro environments are impacting on the organisation using the tools for analysis mentioned above. PESTEL analysis for Louis Vuitton PESTEL stands for factors which may affect the operations of business such as political, economic, social, technological, environmental as well as legal factors (Lancaster & Reynolds 1999). These are explained in detail below and appendix 1 shows a summary of the major points noted. This is a very useful tool in analysing the environment in which an organisation operates. It can be noted that there are various factors that affect the operations of any given organisation and these have to be taken into consideration by an organisation that is serious about its viability so as to achieve competitive advantage (Kottler 1999). Any given organisation is guided by certain factors that so as to ensure that it does not violate the needs and interests of the consumers as well as the other sta keholders. Political In UK, there are policies that govern the operations of all organisations that are involved in manufacturing of different products so as to meet the expected standards. Consumer law in UK is effective and under the EU law, every big organisation like Louis Vuitton is expected to protect the needs and interests of the customers. It can be noted that the current political environment prevailing in the EU is not exploitative which is seen as the reason why exclusive manufactures like Louis Vuitton continue enjoying growth and expansion since inception to the present day. Economic factors The organisation has not been spared by the impacts of the recent global economic recession though it managed to bounce back in the first half of 2010. By virtue of specialising in producing only exclusive products with premium prices, the operations of the organisation are likely to be affected during turbulent times given that premium prices charged are specifically meant for a f ew people who can shift their buying behaviour which negatively impacts on