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. Indeed, Louis Vuitton has achieved exceptional results in this area. In primary activities, various measures are taken to control costs and create value. LV reduces costs by learning modern production methods from automakers and other industries. Although Louis Vuitton production is still a labor-intensive process, the increase in efficiency and productivity has been achieved by achieving the perfect balance between machines and labor. To add value to products, LV pays much attention to improving quality. Because “made in France” is a guarantee of high quality, Louis Vuitton never builds factories outside France or outsources production to places with cheap labor. Although the price of work in France is extraordinarily high, the benefits obtained by the company, such as customer loyalty and business reputation, obviously outweigh the salary. In addition to this, testing laboratories are established for quality control. In the workshops, bags are lifted and dropped again and again and jewelry is shaken forcefully to ensure that each customer receives high-quality products. Since quality is a significant factor to measure a product in Japan, this rigorous quality control process satisfies Japanese customers. Customer service is another important factor in primary activities. According to LV regulations, once a product is…middle of paper…specific, prices for Louis Vuitton's leather goods, accessories, watches, jewelry, shoes and ready-to-wear fell 7% in 2008. Furthermore, Fujii takes some actions to address the challenges. For example, start an Internet business to follow the global trend and expand the distribution channel. Furthermore, it increases the product line to cover children's clothing and expands the market by opening stores in medium and small-sized cities. Since Japan is still a developed country with wealthy families, the Japanese luxury market would still be 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: 12 December 2013].Hill, C., Wee, C. and Udayasankar, K. 2012.International Business: An Asian Perspective. 8th ed. Singapore: McGraw-Hill.