Description And Comparison Of Two Companies (Part III) - Research Paper Example

The company is a part of automotive industry that manufactures some of the best automobiles, motorcycles as well as engines in the world. With the BMW Group owning three of the world’s best automobile brands- BMW, Mini and Rolls Royce and a total revenue of €76.84 billion in2012, BMW Group has become one of the leading premium brands in the world. The company is well known for its innovation, technology and quality. Louis Vuitton Louis Vuitton Malletier commonly referred to as LV, headquartered in Paris, is a French company founded in 1854.

The company is a part of the retail industry that manufactures and sells a variety of products-shoes, watches, sunglasses, luxury trunks, accessories, jewelry and many other items. LV is one of the leading premium luxury fashion brands in the world. The company earned revenue of €3.2 billion in 2012. Target market BMW The BMW has a very strict target market. It only targets the luxury sector and avoids the entanglement in the mass production of average cars. BMW targets the elite and affluent class of the world for its real BMW.

However, the company moved to target the upper middle-class with its new Mini and the 1 series. Louis Vuitton Louis Vuitton has a very limited target market of very wealthy people with high disposable incomes around the world. Nonetheless, the company targets both genders and a varying age from 16 to 80. Competitors BMW Mercedes-Benz and Audi are two of the most pertinent competitors of BMW. These three are referred to as the ‘German Big 3’ and are the leading premium automaker brands in the world.

Louis Vuitton Hermes, Chanel and Gucci are some of the strong direct competitors to Louis Vuitton. These brands, along with LV, have remained the top ranked premium brands for the last few years. (Zelesny, 2011) Business Risks BMW BMW terms the volatility in the environment, the high debt levels and the uncertainty in the relevant industry as some of the most important business risks to the company. (Annual Report, 2012) Currently, the ongoing strikes in South Africa will cost the company extra 25 percent of the regular cost to import the cars into the lucrative African market.

(Furlonger, 2013) Louis Vuitton Louis Vuitton referred to the slowdown in the renewed growth of the world economy as well as the Euro crisis as risks hindering the growth of the company. It also referred to the foreign exchange risk culmination due to the weakening of the Euro. (Annual Report, 2012) The sudden surge for the Louis Vuitton’s logo bags caused a gap in the supply, which converted into a business risk as it hindered the continuous supply of the brands in the market. (Financial Times, 2013)The maturing of the taste in one of the largest markets – China has resulted in the Louis Vuitton logo fatigue.

This will cause the Chinese consumers to move to alternate cheap brands. (Roberts, 2012) Fiscal Year BMW BMW Group’s financial year ends on 31st December. (Annual Report, 2012) Louis Vuitton Louis Vuitton’s financial year ends on 31st December. (Annual Report, 2012) Stock Exchange BMW BMW is listed on the Frankfurt Xetra stock exchange in Germany. Louis Vuitton Louis Vuitton is listed on the EN Paris stock exchange. Financial Principles BMW The notes to the BMW financial statements 2012 strictly signify that the company-followed uniform accounting policies and principles in accordance with IAS 20, IAS 27, IAS 33, IFRS 2 and others.

This company follows international accounting principles. (Annual Report,