How does LVMH classify its business portfolio?

LVMH classifies its business portfolio primarily by business segments, which is a strategic approach that organizes its wide range of luxury brands into distinct categories based on the type of products and services they offer. This segmentation allows LVMH to manage and market its diverse portfolio effectively, ensuring that each brand maintains its unique identity while also leveraging synergies across the company.

By grouping brands into segments such as fashion and leather goods, perfumes and cosmetics, wines and spirits, and watches and jewelry, LVMH can tailor its strategies to each segment's specific market dynamics, customer preferences, and competitive landscape. This classification not only aids in concentrating resources and efforts where they can yield the best results but also enables the company to adapt to changes in consumer behavior and industry trends.

In contrast, classifying by geographic regions would focus solely on location and not consider the product types, while product innovations may overlook the established brand identities that exist within specific segments. Focusing on market trends would provide a more fluid understanding of the external environment but would not capture the structured nature of LVMH's brand management. Thus, segmentation by business category is essential for optimizing performance and driving growth in the highly competitive luxury market.