Luxury goods industry Porter's five forces model Essay

Luxury goods industry Porter's five forces model - Essay Example The Social Media has empowered consumers in all industries, including in the luxury goods industry; because of the feeling that they can secure the support of many other people in regard to their rights, as consumers, customers in the luxury brand industry have become more powerful to influence the industry’s strategies (Deloitte 2014) – H Since 2012 an important trend has appeared in the luxury goods industry: emphasis is given to ‘fine jewellery’ (Luxury Society 2012, par.13) and not on ‘seasonal accessories’ (Luxury Society 2012, par.13). Louis Vuitton has been the luxury brand that first supported this trend; Richemont Group, the owner of popular brands such as Cartier, had followed (Luxury Society 2012) - L Popular luxury brands have taken action against those who try to develop cheap substitutes of their products; for example, in a relevant lawsuit the courts ordered the owners of a series of websites that have developed such activity to pay an amount of $100 million to Hermes (Luxury Society 2012) - L In any case luxury products are, by their nature, related to costly materials; the high cost of these products prevents those who would like to create substitute products of low price (Luxury Society 2012) - L a) continuous turbulences in markets worldwide; downturns in the performance of markets have been proved as able to affect the buying power of the industry’s customers (Paton and Sanderson 2014); only the brands that can secure high quality, innovation and uniqueness of their products are able to secure their market position - H The rate of development of the luxury goods industry is satisfactory but unstable; the strong turbulences in the international market are considered as the key reason for this phenomenon. The industry’s high instability would discourage new entrants to enter in the luxury