Dior Strategy Analysis

Dior Strategy AnalysisAfter the show, Christian Dior began thinking ab go forth his design again, in his mind he thought he had the responsibility to bring mode to women, and he wanted women looks like flowers. Because the subversive designing and perfect looking, the preparees were accepted by most society people through they were expensive in that time. (Marly, 1990) Christian Diors wonderful impertinently look made fashion area crazy in that near, some people liked it very much, otherwises against it. Because of the customsal looking about the clothes, some governments thought this kind of clothes wasteful and awful, they even ordered some factories stop making the clothes.People who liked Diors styles very much, started thinking about against governments, they came to meet Christian Dior and discussed how they could do to protect the clothing line. For Christian Dior himself, he believed his new fashion would be popular by women, he did want return to the old fashion again , and so every 6 months he made a new line to continue his clothes until reached 22 lines.A big change was happened in 1957 when the Masters death stunned the whole fashion market, he was the creator who made Christian Dior be known. However, the ships confederacy could not stop developing, and it became the domination in that time of fashion merchandising.Diors new designs always shocked the fashion marketing after that time it made Christian Diors company became more and more noted. A lot of Diors stores appeared in Paris, Hollywood, New York it was well known as a extravagance label from that time all over the world.For developing and expanding its market, Christian Dior began to add some other products not only clothes, tho also fashion and leather goods, watches and jewelries, wines and spirits, perfumes and cosmeticsThe aims of this article is considering the developed of Dior industry in last few years from about 2003 to 2009, and trying to find out some strategies for following development for Dior. And also considered how Christian Dior gets its predominant in fashion industries, especially in the similar luxury brands like Louis Vuitton, Armani, Gucci, and Channel. It is obliviously that if any industry insists on atomic number 53 strategy or old-fashi unrivalledd fossilized attitudes in the market, it would be gone out from the market chop-chop.The pursual article pull up stakes discuss the strategies by cardinal tools, which considered from the industry flavor cycle, PESTAL framework, five framework and strategic group to understand the development of Christian Dior. And through the five tools we also could understand the different strategies apply in different time or under different economical environment. And at last, conducting a SWOT analysis of Christian Dior also becomes a required step.Industry Life CycleThe products in any industry should project a process which is called industry life cycle in marketing. Normally, it wo uld separate to quartet steps introduction growth maturity and decline. The competition becomes white-hot in the luxury marketing, it is a almost total mature market. According to the industry life cycle, it should nearly reach or have already reached the decline step. So, how to change the poison and improve competitive in fashion marketing become an result for Manage groups of Christian Dior. Strategies of sustainable development are necessary considered by them in this period.Strengths, Weaknesses, Opportunities, and Threat (SWOT) AnalysisInternal and external strengths and idlenesses should be considered at offset if the company needs to do any strategy. Moreover, the opportunities Dior will face and what threats it will meet in recently and future will be discussed in the following article.Internal and external strengths of Christian DiorThough considering the internal strengths of Dior, as a top luxury brand, it has created a great fashion culture in its history. For examp le, the typic black dress is popular by women for many decades even until now, it is so classical. As top brand, Dior did the best to produce extremely great quality products. They centering on fashion trends and leading the trends. Dior signed the greatest designers in fashion areas, like John Galliano. As a fashion company, Dior made a romance for itself and for the whole industry.External strengths would be discussed from customers, for Dior, it has a huge groups of customers, they understand Diors products deeply beyond the foundation of the products themselves. They looking for something have more meanings. For these customers, Dior keeps improving its services, it is a staple fibre but important strategy which is known by the strategy groups. Keeping good communicating with customers, and assuring its patron of its best effort and hospitality. Further sexual union services should be spread immediately in New York, Tokyo and all the cities which have Diors products. In 200 9, Carla Bruni, the first lady of France wore two dresses to participate the solemnisation of Bastille Day which are all made by Dior, it is a big impact for fashion marketing even under the unfavorable business environment. Carla Bruni is one of Diors fans, she was happy to mention when she was 19 years old, she began her career with wearing her first Dior dress. Smoking jacket which designed in 1990 is favorable by many famous women now. That is what Dior keeping on doing for its external market.Internal and external weaknessesAt first, Diors products related high costs, which mean its customers would be narrowed in small rich groups. Second, in order to expand the range of customers, Christian Dior increase export products. Comparing with local products, export products have some disadvantages, like longer delivery time, weak language capabilities, for many products need import raw materials, it costs time and money, as a export products, they always lack of new styles in treet op seasons. Third, it is more difficult to keep its image-building in different country with different culture. For example, Sharon Stone (Stone) is a famous actor in Hollywood, and she was approached the face of Dior in 2005. In 2008, there was an earthquake happened in south of China, it left 68,000 people dead and many were homeless. Sharon Stone as a face of Dior said, it was karma, her words caused most of Chinese against her and Dior. Until Stone apologized in Public and Christian Dior decided to drop her, Chinese people still could not forgive her. This is a very serious order to Diors image. (www.icmrindia.org, 2009)External opportunitiesAfter China joined the WTO (World Trade Organization), it becomes a huge potential country in fashion marketing. There are 31 LVMH (a luxury company with 61 brands inside its portfolio) officials available in China. For Dior, China is a big market. Dior had launched more than 20 stores in Beijing and Shanghai, the next step for them is to u nderstand Chinese marketing by considering open more stores in China. (Christian Dior, 2009)External threatsThe biggest threats to Christian Dior are coming from other luxury brand, like Louis Vuitton Channel Gucci and Armani, which have the same products in fashion industry. Another reason comes from the fashion marketing, Berg (2002) argued that luxury brand only launch their stores in large cities, the rents or other costs might be maintained in a very high level, it narrows the development of company and it might lead pecuniary problems in the next 10 years.PESTEL Framework (Political, Economic, companionable, Technological, Environmental and Legal)PoliticalSince some new members joint into European Union, the tariff decline quite a lot, it is a big set up to Diors export and import business. Expanding new business line and opening new stores in different areas is one of Diors most important strategies. It brought a lot of benefits and challenges to Dior. bring down price of some products to improve its competitive to other luxury brands, and expanding its overseas plan, especially plan in Asian market.Through this report, it seems under this politics, Diors export sales increased about 8% in one year.Economic conditionsIn 2008, world financial crisis started from America, the economic condition impacted every industry quickly. In the first three months of 2009, Christian Dior (2009) stressed Dior Couture declined about 8% at current exchange rates and of 12% at constant exchange rates. The linked States and Japan is impacted seriously by the financial crisis, the Diors goods sales decreased obviously in the period. However, the good news is that sales situation remains lovesome in China and some Middle East countries. Christian Dior invested strategies into these new areas to develop itself.Christian Dior (2009) stated that the manager groups changed their concentre on these new economic powerful countries, and kept the balance between its strengt hs and weaknesses. This strategy brought a lot of advantages, and keeps Diors dominance position on the world luxury marketing in 2009.SocialChristian Dior has a huge range of customers, because it consist its best design and quality, it created a fashion culture and history for itself. Dior as a label is esteem by many people.TechnologicalTo improve competition, Christian Dior signed up a contract with John Galliano who is one of most influential designer in fashion areas. It is a big issue for Dior, and also for fashion industries. For example Dior watch designed by John Galliano and Victoire de Castellane in 2005, it impact the trend of Diors mode style. It is not difficult to image women would like taking a lot of money in a new style handbag, that means they also would shake off a high price on a fashion watch if it is a new fashion trend in their minds.Furthermore to open up new avenues of business, Christian Dior began cracking other business areas. The first step is co-op erating with other brands which is famous on other business industries. For example, On June 2008, Dior co-operated with Apple, created a dress for Apples iphone. It was named Dior Homme iPhone Holder, obviously, it was so expensive, compare with old iPhone, Dior Hommer iPhone Holder cost twice price.It is the not the first time Christian Dior enter into another total different industry. Then, Christian Dior collaborate Mode Labs and produced its handset. This handset is called My Dior, and it is extremely expensive, with a 2 Mega pixel camera, a tough screen, and multimedia goodies. One My Diors retail is start from 5000 dollars. And Diors company will come up with its own new mobile later soon. (Troaca, 2008)Environmental and LegalObviously, Christian Dior is Legal company, it keeps abiding by every laws, including employees law company environment condition fair competitive law and others. Because obey these laws are the basic situations to run a company.Five Forces FrameworkIt w ill follow 5 parts Competitive Rivalry, Buyer, Suppliers, Substitutes, and Potential Entrants.Competitive RivalrySome researches show the price is not the most important factor customers would consider, they are more focus on the value of the products. Like Dior, many rich people are honest fans of its products through the price is very high. This is a big difference between normal products and luxury goods. They buy Dior for distinguishing others.According to the psychology of customers, Dior promoted a strategy from 2003, which is called limited edition. Dior Company produces some goods with specific design, and most important point is the company will control the numbers of the goods. It made a big success until now, every time when Dior creates new limited-good, they will be sold much quickly than others.Beside great quality goods, Dior pays a lot of attentions on its services for customers, DallOlmo Riley and Lacroix ( 2000) pointed out that all luxury brands not only focus on selling goods but also making a great relationship with their customers after sale. All of these strategies made DiorCompare with its biggest competitors like Gucci, Armani, and Hermes. Christian Dior got more benefits in sales within its talent manager groups.Buyer and SuppliersDeveloping new customers and suppliers is a very important plan to Dior. For example Dior invested a lot into developing Chinese market. curiously after 2008 Beijing Olympics Game, most of countries think China is the world next economic superpower. Furthermore, Chinese could supply cheaper resources with the same qualities as European countries. That means built factory in China could reduce a lot of costs.Substitutes and Potential EntrantsIn order to meet more and more customers requirements, in 2004 Dior expanded net sales as another kind of channels for selling. It is much more convenient with internet selling, people feel happy to choose their purchases online. Okonkwo (2005, P57) point out that bran ds like Dior or Chanel have built their empire not only by capitalizing on their products but also on the aura of the brand, which itself is perpetuated through marketing mix elements such as store atmosphere and communication.Suggestions and conclusionDeveloping Dior company need to do more effective actions, it should be considered from the main number one wood of market. DallOlmo Riley, Lomax and Blunden (2004, P40) stated that fast moving consumer goods, growth, rather than defense, it is the main driver for extending luxury brands. Especially in nowadays, Dior gets a lot of stress under the global financial crisis. The Economist (2003) reported because of Euro against dollar, the expenditure of luxury goods from customers decreased dramatically.Basing on literatures, launching extension for Dior seems a feasibility strategy. However researching elements like desirability, high awareness and exclusive is not an easy thing.It is easy to find out that knowing the strategic drive rs is a much important factor for managements of luxury brands when they considering to extend their brands. As DallOlmo Riley, Lomax and Blunden (2004, P45) indicated that end and launch criteria are the same for fast moving and for luxury goods. And, managers always need consider the brands craftsmanship, heritage, culture and tradition before making the decision of whether it should be extended, although the main structure would not change at all. Chernatony and McDonald(2003, P25) typified A successful brand is an identifiable product, service, person or place, augmented in such a way that the buyer or user perceives relevant, unique added values which match their needs most closely. Furthermore, its success results from being able to sustain these added values in the face of competition. Which means managers should follow two elements one is not only concern the products themselves but also consider from the whole business. The other is, keeping the tradition of original brand s.For Dior Company, it has got a high success and respect in fashion areas, the only thing it need to do is considering how to keep its dominant position and keep walking in future.