December 2010

Dec 13, 2010

Counterfeit goods sold openly in China can be hard to distinguish from the genuine article.By Jayce Crowther, Max Cheng, Josh Lunbeck, Alice Cheng and Chiu Chien-Kuo

Louis Vuitton Moet Hennessy (LVMH) knows the importance of doing business in China. In its 2009 annual report, it stated that Asia excluding Japan, accounted for more that 28 percent of revenue in leather goods, more than any other region. LVMH’s flagship brand in this industry is Louis Vuitton (LV), and the report commented that “the brand has made spectacular headway in Asia (especially China.)”[i] In fact, LV already has stores in 27 Chinese cities and is one of the most popular luxury brands there.  However, with great success comes imitation, and in LV’s case this isn’t done purely through rivals, but though counterfeit items - exact copies of the very same goods that LV sells.  Although counterfeit goods can be found in any country, the problem is especially prevalent in China, where it is a major industry and fake goods can be found on the street and in major markets.  The consumers are also different.  In other countries customers may be duped into buying fake goods, but in China customers knowingly make purchases of counterfeit items.  Thus far, tough stances taken by companies such as LV have been met with limited success.  To successfully tackle the problem of piracy in China, LV will need to better understand Chinese consumers and culture.

Dec 11, 2010

chipotle1By Matthew Blong, Richard Kim, Rebecca Knowles, Wei Li, Eri Miyagi and Ryan Scalise

Stephen Lindner’s eyes lit up as he pulled a hefty burrito wrapped in foil out of a brown bag covered with the catch phrases “I think about Chipotle every time my stomach growls” and “one delicious bite left in the bottom!

When asked what he liked so much about Chipotle, the graduate student at Thunderbird School of Global Management in Glendale, AZ – famished as he began to devour his burrito – immediately responded, “because it tastes good!”

Without knowing it, Lindner exemplifies the effect that Chipotle’s strategic advantage has on its customers.  Namely, that Chipotle tastes great because it serves classic Mexican entrees made from organic and locally sourced meats and produce, all under the banner of the company’s motto, “Food with Integrity.”  And like Lindner, few Chipotle customers realize that good taste is, in fact, a direct result of organic ingredients.