Christion Dior is famous as Dior. It is a French high-end luxury brand company chaired and controlled by the French businessman. The company was established in 1946 by the famous designer Christian Dior. The brand continued its legacy by designing and retailing fashion accessories, leather goods, footwear, time pieces, jewellery, makeup, skincare and fragrances. The company successfully maintains its own tradition of creating haute couture under the division of Christian Dior Couture. The brand is very famous among people, as it offers wide range of women’s products. The company also produce household items under the name Dior Homme for men and Baby Dior for kids (Dior, 2019).
The company is performing in the fashion industry. There are many big brands competing in the market. For Christian Dior, it is necessary to have industrial and market analysis, in order to examine the strategies and make decisions. Porter Five forces model helps the company in decision making by analyzing the competitive factors of the industry. It mainly helps in detailed external analysis of the industry, which helps the companies in flourishing. Here is the detailed Porter five forces analysis of Christian Dior;
Bargaining Power of Buyers
The buyers have weak bargaining power in case of Christian Dior. The company is product oriented, rather than market oriented. It produces high end, luxury products, and have its own customer base who buys the product despite of the high prices. The loyal customer will buy the product no matter how much higher the prices will be. This makes the brand stand one out and weakens the bargaining power of the consumers. However, in this switching cost does not make a big difference, but consumers run towards differentiated products. The brand is mostly famous in its bags and accessories or fragrances (UK essays, 2018).
Bargaining Power of Suppliers
When there are few buyers and more suppliers, the bargaining power of the suppliers will be low. Christian Dior is working in the luxury goods fashion industry, which means competing with few rivals. This further means, the brands require specific materials like original leather etc. The buyers of which are few. Thus, the companies will have more control over prices. However, Christian Dior maintains good supply chain and have suppliers from the globe. The company is also looking forward for the Chinese suppliers, as China is promoting the brand to great extent (Hopkins, 2018).
Threats of New Entrants
As the fashion industry is highly saturated with both local, niche, and luxury brands. It has become mandatory for the new entrants to enter in the industry by thinking twice. They have to face big giants who are working in the industry. It will be difficult for them to build a customer loyalty in short span of time for competing rivals. Rivals have been able to build strong brand image in the buyers’ eyes. The high distribution network and channels are difficult. The new entrants have to bring more differentiated products in order to grab the market (Sophiacapo, 2014).
Threats from the Substitute Products
Threats from the substitutes are moderate for Christian Dior, as the brand is involved in both retailing and manufacturing. It is not limited to one product but diversified itself into makeup, apparel, jewellery etc. However, the threat it faces is losing its customers who got attracted by rivals. This makes it necessary for the Christian Dior to engage its customers and build a strong loyal consumer base, by differentiating its products. Moreover, the company is successful enough in dealing with this threat (Hopkins, 2018).
Rivalry of Existing Players
There are many rivals in the industry who are dealing in the luxury items like Channel, Louis Vuitton, Herms, Gucci, etc. The fashion industry is highly saturated, and every competitor is involved in producing the unique product to gain the market attention. Christian Dior is working its best by attracting different consumers geographically. This helps the brand in increasing consumer base. However, Christian Dior is one of the lading brands in the industry because of its talented managers. The company is involved in producing differentiated products and capture the market. Its new and limited edition sold out really quickly (UK essays, 2018).
References
Dior, 2019. About the company. [Online], Available at: https://www.dior.com/en_int, [Accessed on: 4th December, 2019].
Hopkins, B. 2018. Christian Dior A New Look for Haute Couture Porter Five Forces Analysis. [Online], Available at: https://www.case48.com/porter-case/5973-Christian-Dior-A-New-Look-for-Haute-Couture, [Accessed on: 4th December, 2019].
Sophiacapo, 2014. Perfume industry, microenvironment analysis. [Online], Available at: https://brandstrategymanagement.wordpress.com/tag/porters-forces/, [Accessed on: 4th December, 2019].
UK Essays. 2018. Dior Strategy Analysis. [Online]. Available at: https://www.ukessays.com/essays/marketing/christian-dior-designer-marketing-essay.php?vref=1, [Accessed on: 4th December, 2019].