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					                                                                       Christian Dior   1


                                          Outline


Official Submission Cover LMBS

Table of Contents with page numbers

1.0 Executive summary

2.0 Introduction

3.0 Sector Analysis

Overall view of the current issues in the sector

4.0 Macro Environmental Analysis

4.1 Past: issues happened in the past ( 2 years)

4.2 Current: Issues happening now

4.3 Future: issues " what" students think will happen in 1-3years

5.0 Company Responses

5.1 Past: responses in the past back 2 years

5.2 Current: responses now

5.3 Future: contingency plan for 5.3

6.0 Conclusion

References & Bibliography

Appendix

REPORT PRESENTATION (GUIDELINES)

(Section 4 and 5 has 3 sub sections and each sub section requires

2 issues/responses to be discussed as each issue is 5 points worth.)




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                                1.0 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 competitors 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.


                                     2.0 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:




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      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).




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                                    3.0 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
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       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.


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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
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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).




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                                     References


Blaszczyk, R, 2008, Producing fashion: commerce, culture, and consumers,

      Philadelphia: University of Pennslyvania.


Bloomberg, 2010, CHRISTIAN DIOR (CDI: EN Paris), Accessed December 7, 2010

      from

      http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker

      =CDI:FP


Christian Dior Group, 2010, Combined Shareholders’ Meeting, Accessed December 7,

      2010 from http://www.dior-finance.com/en/pdf/slides_ag2010_en.pdf


Cusson, J, 2010, The world wine and spirits market with forecasts to 2013 from the

      vinexpo / the iwsr 2010 study, Accessed December 7, 2010 from vinexpo.com


Datamonitor, 2010, Christian Dior SA – C. Company Profile, London: Datamonitor Plc.


Dior Finance, 2009, Consolidated financial statements summary, Dior Finance,

      accessed December 7, 2010 from http://www.dior-

      finance.com/en/etats_financiers_conso.asp




Dior, 2009, 2009 Annual Financial Report, Accessed December 7, 2010 from

      http://www.dior-finance.com/en/pdf/Christian Dior 2009 Annual Report.pdf




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Jamal, H, 2010, Decreasing Profitability of Christian Dior, Accessed December 7, 2010

      from http://south-university-online.org/blog/decreasing-profitability-of-christian-

      dior/


Kort et al., 2005, Brand Image and Brand Dilution in the Fashion Industry, Accessed

      December 7, 2010 from http://www.heinz.cmu.edu/research/286full.pdf


UNCTAD, 2009, Review of corporate responsibility reporting: the largest transnational

      corporations and climate change related disclosure, Accessed December 7, 2010

      from http://www.unctad.org/en/docs/ciiisarcrp7_en.pdf




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