1. What made Louis Vuitton's business model successful in the Japanese luxury market? According to Hill, Wee and Udayasankar, the success of the company's strategy can be measured by the value created for shareholders. To maximize value, managers can increase profitability by choosing a position on the efficiency frontier with supporting internal operations and an appropriate organizational structure. In fact, Louis Vuitton has achieved exceptional performance in this area. In core activities, several measures are taken to control costs and create value. LV reduces costs by learning modern manufacturing methods from automakers and other industries. Although Louis Vuitton's production is still a labor-intensive process, the increase in efficiency and productivity has been achieved by achieving a perfect balance between machines and labor. To add value to products, LV pays great attention to quality improvement. “Made in France” being a guarantee of high quality, Louis Vuitton never builds factories outside France nor subcontracts production to a place where labor is cheap. Even though the price of labor in France is extraordinarily high, the benefits obtained by the company such as customer loyalty and business reputation obviously exceed the salary. Apart from this, testing laboratories are established for quality control. In the laboratories, the bags are lifted and dropped again and again and the jewelry is shaken strongly to ensure that every customer receives high quality products. As quality is an important factor in measuring a product in Japan, this strict quality control process satisfies Japanese customers. Customer service is another important factor in core business. According to LV regulations, once a product is......middle of paper......precise, the prices of leather goods, accessories, watches, jewelry, shoes and loan- Louis Vuitton's out-of-wear sales declined by seven percent in 2008. Additionally, Fujii is taking some steps to address the challenges. For example, it establishes an Internet company to follow the global trend and expand the distribution channel. In addition, it expands the product range to cover children's clothing and expands the market by opening stores in medium and small towns. As Japan is still a developed country with wealthy families, the Japanese luxury market would remain a healthy and attractive market for Louis Vuitton and these challenges could be overcome to a large extent. Works Cited Paul, J. and Feroul, C. 2010. Louis Vuitton in Japan. [Accessed December 12, 2013].Hill, C., Wee, C. and Udayasankar, K. 2012.International Business:An Asian Perspective. 8th ed. Singapore: McGraw-Hill.