Christen Dior

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1.0 Introduction

Christen Dior, Dior, is a famous fashion consumer brand in France. It is also the world's largest fashion brand holding company: LVMH MOET & CHANDON Hennessy Louis Vuitton group's parent company LVMH group, a French wine industry and high price luxury goods manufacturing group. Dior has LVMH Group 42.38% common stock and 59.3% voting rights. The Christian Dior Co is founded by Kristen, Dior fashion designer of France. Its headquarters is in Paris. Mainly is engaged in women's wear, men's wear, jewelry, perfume, cosmetics, children's wear and other high-end consumer goods. The men's clothing brand is now independent of Dior men's wear.

Porter’s five forces model is an analysis tool that uses five industry forces to determine the intensity of competition in an industry and its profitability level.

The paper analyses the market situation of Dior with porter’s five force model and introduces the business strategy Dior uses to get higher profits.

2.0 Dior and Porter’s five forces

Five forces model was created by M. Porter in 1979 to understand how five key competitive forces are affecting an industry. The five forces identified are:

Threat of Entry

Potential entrants at home and abroad are constantly emerging. Every brand within the industry is constantly competing through differentiated competition. But what's good for the industry is that the threat of substitute products is small, the bargaining power of consumers is low, and bargaining power of suppliers is relatively low. Even if there is fierce competition, Dior will identify itself and respond well to these competitions.

Threat of Substitutes

At present, the luxury market is a mature stage, and Dior products have been very perfect, advertising is also very mature, high market dependence, have a complete set of business model. But in the high-end cosmetics market, Dior is facing a large number of competitors and competitive pressures.

Bargaining Power of Suppliers

The suppliers of cosmetics manufacturing industry include all kinds of related raw materials, drug testing service industry, chemical raw material industry, chemical industry and so on.

The supplier's bargaining power has little influence on the cosmetic industry because the raw materials of the cosmetics industry are general chemical raw materials, and the sources of raw materials are quite large, while the Dior and the suppliers are mostly long-term contractual relations and often establish a tacit agreement of cooperation, so the price of raw materials is fixed and the suppliers' bargaining power is fixed. Not high.

The core of the cosmetic industry chain's value creation lies in manufacturing enterprises and distribution channels. Suppliers are generally subordinate. No matter what kind of cosmetics they are, they actually use the same raw materials. Just according to the location of products, the content of expensive raw materials is slightly different.

Action Plan: for more profits for investor, Dior will build a complete product line and value chain.

For one part, purchase new brand and design new products, so as to ensure that there are different kinds of new products in different season, for another, opening up the market and developing different products with different tastes and different images to meet the different needs of different people in different periods and different space.

The whole value chain of "material design - production - Retail" is forged and the group profit is promoted through the extension of the industrial chain, and the sales channel of a single brand is guaranteed. The focus of this strategy is to create a unique product and service that is considered by all sectors and customers. There are many ways to differentiate strategies, such as product differentiation, service differentiation and image differentiation. Realizing differentiation strategy can cultivate users' loyalty to brand.

3.0 Conclusion

The paper introduces the background of Dior, a famous fashion consumer brand in France. Then analyses the market situation of Dior with porter’s five force model and introduces the business strategy Dior uses to get higher profits.

LVMH's wine, clothing, cosmetics, jewelry and clocks and watches are very rich in product lines. With differentiation strategy, the complete value chain of "raw material design production retail" has promoted the group profit through the extension of the industrial chain, and also guaranteed the sales channel of the single brand.

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