Guided Case: LVMH (Ch 10) Questions and Correct Answers the Latest Updat
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Module
LVMH
Institution
LVMH
How does LVMH benefit from economies of scale?
a. It can more easily afford to open a new shop in a prime location.
b. It can open more shops for less money in a wider variety of locations.
c. It can produce more goods for less money than its competitors.
d. It can set prices on a sliding scale...
Which label best fits the diversification strategy employed by LVMH?
a. Value-chain diversification
b. Constrained diversification
c. Related diversification
d. Unrelated diversification
✓ c
The economy is one element of the environment that can impact the success of
a diversification strategy. How has LVMH's sales been affected by this type of
environmental change?
a. As the global economy has faced a downturn, the focus on high-priced luxury
goods has led to a drop in sales.
b. As the number of super wealthy consumers globally has increased, the
demand for luxury goods has also increased.
c. The additional costs associated with ethical sourcing that consumers now
demand has driven up production costs and reduced profitability.
d. The number of luxury-goods consumers has increased, as the market has
expanded to include the prosperous as well as the super wealthy
✓ d
LVMH could open different shops for its individual brands, with each store
specializing in one brand, but all of them using the same proven business model
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