Executive Summary
This is a report on Christian Dior, a multinational company based in France which engages in the production and distribution of several consumer goods. In the distribution of its products, Christian Dior has given some distributors licenses in France and the whole of Europe, Middle East, Asia and Pacific as well as China and Japan. In its operations, Christian Dior has a franchise named Financiere Jean Guojon as well as Couture which it has 100% stake and the LVMH which it has 42.4% stake. Christian Dior was 69.43% owned by a firm called Groupe Amault. The company operates in a supranational environment, where it faces stiff completion from their compatriots in New York. Although the American fashions are confined to the domestic market, some designers like Ralph Lauren, Calvin Klein, Marc Jacobs, Oscar de la Renta, Vera Wang as well as Donna Karan have gone beyond the US market to venture into Europe, Asia, Middle East, Japan and China.
Introduction
Christian Dior is a multinational company based in France which engages in the production and distribution of several consumer goods. The company was founded in 1946 with it’s headquarter in Paris; France. It also has branches in several cities in France, Europe, The US, Canada, Middle East, Asia and the Pacific. To stay competitive in the dynamic market, The Company has diversified in the six production lines. These are:
- The company operates a haute couture house which is marketed under the brand of Christian Dior.
- They also have interests in the wines and spirits industry. Some of their brand in this industry are; Veuve Clicquot, Moet and Chanon as well as Hennessey brands.
- The leather and fashion products are another key area of interest for the company. In this industry, their fashion brands are: Fendi, Celine, Luois Vuitton and Givenchy brands.
- The cosmetics and perfumes which includes the Guelain, Kenzo and the Christian Dior brands.
- The company also ventures in the watches and jewelry industry with fashion brands such as; TAG Heuer, zenith and Chumet
- And finally, Christian Dior operates some franchise under DFS, Le Bon Marche and Sephora brands in the markets.
The company has licensed some distributors to help in the distribution and marketing of its products in the world market. Some of the distributors are in Europe, America and Japan. In its operations, Christian Dior has a franchise named Financiere Jean Guojon as well as Couture which it has 100% stake and the LVMH which it has 42.4% stake. Christian Dior was 69.43% owned by a firm called Groupe Amault (Dior Finance, 2009, p. 7).
Sector Analysis
In the sector analysis, we have the financial analysis, competitor analysis and the sales analysis. Because of the six production lines the Christian Dior has, it has a diverse market and hence different competitors. Its major competitors are mainly from France, the UK, the US, Japan and the new entrants from Shanghai China.
Macro Environmental Analysis
Christian Dior has been a beneficiary of the government efforts to protect and promote the local designers. In spite of this, Christian Dior has faced stiff completion from within and outside France. Even though Paris that undoubtedly believed to be the world’s fashion capital, there are about five cities which compete with Paris to supply new ideas and designs in the international market, they are; New York, Milan, Landon, Tokyo and the new entrant, Shanghai. Paris fashion industry is flourishing because of the support of the government as well as the citizens. Over a long period of time, the French government has a history of protecting their market through the French Chambre Syndicate. The French Chambre Syndicate has adopted strict measures to protect and control the fashion industry. The laws issues codes of condact and regulate the designer who are in the haute couture house and those who are willing to join. Apart from Christian Dior, other designers in the haute couture house are: Pierre Cardin, Christian Lacroix, Chanel, Yves St Laurent, Jean Paul Gaultier and Sonia Rykiel. The British designers have also made inroads in the French fashion industry. They are; John Galliano and Julian MacDonald. Other designers in the industry are the Italians such as, Giorgio Armani, Franco Moschino, Muicca Brada, Emmanuel Ungaro and Versace
The company also faces stiff completion from their compatriots in New York. Although the American fashions are confined to the domestic market, some designers like Ralph Lauren, Calvin Klein, Marc Jacobs, Oscar de la Renta, Vera Wang as well as Donna Karan have gone beyond the US market to venture into Europe, Asia, Middle East, Japan and China. Designers from Tokyo, which is the core of the Japanese fashion industry, have become a major force in the fashion industry. This proves to be a major challenge for Christian Dior as Japan is a very important market for all its products, as a result affecting the company’s profitability (Jamal, 2010, para.11). Some of their major designers are: Comme des Garcons, Junya Wantanabe, Issey Miyake, Kenzo and Yamamoto. Another important market in this industry is the Middle East as it accounts to about 11% of the world market. Most of the fashion products are bought by the locals or by tourists from the United Arab Emirates, Saudi Arabia, Kuwait, Bahrain as well as Dubai.
Structure of the Fashion Market
There are many reasons why the fashion market is now readily to the masses. They are the technology and the availability of several levels fashion functions like; haute couture, designer wear, street fashion and mass markets (Dior, 2009, p. 6).
Key developments of Christian Dior
Christian Dior announced an interim dividend of a gross amount of EUR 0.88 per share which was paid on 2nd December, 2010. 29th November, 2010 is the date of ex-dividend. 26th November, 2010 is the last day of trading with interim trading rights. Christian Dior SA Reports Revenue Results for the Third Quarter of 2010 on 14th November, 2010. Christian Dior recorded revenue of €14.8 billion in the Third Quarter of 2010, a 19% increase compared to €12.45 billion for the Third quarter in 2010. With 14% growth in organic revenue, it confirmed the trend that was witnessed during the start of the year (Bloomberg, 2010, para.4).
On 28th September, 2010, Christian Dior SA and Safilo Group S.p.A renewed their licensing agreement. The licensing agreement renewed was for the production, design and worldwide distribution of the collection of frames for eyeglasses for brand of Dior until 31st December, 2017 (CDI, 2010, para.1). Factors considered to be affecting macro-environment also affect the company as well as other members within the environment such as its consumers and suppliers and so on. These factors have much greater influence that they are more noticeable than other factors within the firm. These macro-environmental factors are: Social, cultural, legal, political, technological, demographic and environmental (Blaszczyk, 2008, p. 203).
Company responses
The issue of climate change has become a vital concern not only to the world leaders but also the world citizens at large. The earth is reeling from the negatives effects of climate change from unpredictable weather patterns to extreme weather conditions (Cusson, 2010, para.1). The effects have been more severe in the past decades that environmentalists have raised concern over the future consequences and warned that they could be more severe. Due to this, the world’s largest transnational companies (TNCs) have commenced several voluntary practices as their corporate social responsibilities (CSR). In their CSR, these companies have addressed the issues of climate change. Christian Dior being a member of TNCs top 100 companies agreed to adopt policies to address the issue of climate change. When it comes to addressing climatic change issues, the TNCs agreed to disclose practices that will disclose a rough image of some of the best practices in addressing climate change issues. The companies will create policies to adopt appropriate governance issues as well as management systems and report their progress to the TNCs top 100. The policies to be adopted include the reduction of the greenhouse gas emissions (GHGs). This is one of the most important responses that Christian Dior has taken to address problems affecting our planet (UNCTAD, 2009, p.15).
One of the most controversial responses body the Christian Dior was when she sue the supermarkets for carrying its products because the extensive availability could hurt the image if her brands. This is because selling a few products in the fashion store could forfeit while selling so many could dilute the image of the brand. To prevent product dilution, Christian Dior use limited channels to limit the availability of their products. Christian Dior has also decided not to sell her products over the internet as it may dilute the image of her brands (Kort, 2005, p.3).
References
Blaszczyk, R, 2008, Producing fashion: commerce, culture, and consumers, Philadelphia: University of Pennslyvania.
Bloomberg, 2010, CHRISTIAN DIOR (CDI: EN Paris). Web.
Christian Dior Group, 2010, Combined Shareholders’ Meeting. Web.
Cusson, J, 2010, The world wine and spirits market with forecasts to 2013 from the vinexpo / the iwsr 2010 study. Web.
Datamonitor, 2010, Christian Dior SA – C. Company Profile, London: Datamonitor Plc.
Dior Finance, 2009, Consolidated financial statements summary, Dior Finance. Web.
Dior, 2009 Annual Financial Report. Web.
Jamal, H, 2010, Decreasing Profitability of Christian Dior. Web.
Kort et al., 2005, Brand Image and Brand Dilution in the Fashion Industry. Web.
UNCTAD, 2009, Review of corporate responsibility reporting: the largest transnational corporations and climate change related disclosure. Web.