Strategic Analysis of Christian Dior Name of the student Name of the university

Running head: STRATEGIC ANALYSIS
Strategic Analysis of Christian Dior
Name of the student
Name of the university
Author Note:

STRATEGIC ANALYSIS
1
Executive summary:
The report below shows that the premium fashion firms like Dior comes under the influences of
several macroeconomic factors like political, legal and environment. The premium fashion
industry has become intensely competitive owing to presence of global firms as well as smaller
firms which even compete to poach the customers from their larger counterparts. Firms in order
to sustain in the stiff competition have to adapt to the macroeconomic factors.

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Table of Contents
Executive summary:........................................................................................................................1
Introduction:....................................................................................................................................4
Discussion, analysis and finding:....................................................................................................4
Internal analysis-VRIO model:........................................................................................................4
Value:...........................................................................................................................................5
Rarity:..........................................................................................................................................6
Imitability:...................................................................................................................................6
Organisation:................................................................................................................................6
External analysis:.............................................................................................................................7
PESTEL of France:..........................................................................................................................7
Political factors:...........................................................................................................................7
Economic factors:........................................................................................................................8
Social factors:..............................................................................................................................9
Technological factors:.................................................................................................................9
Environmental factors:...............................................................................................................10
Legal factors:.............................................................................................................................10
Porter’s 5 forces:............................................................................................................................11
Threats of new entrants:.............................................................................................................11
Bargaining power of buyers:.....................................................................................................11

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Bargaining power of suppliers:..................................................................................................11
Threats of substitutes:................................................................................................................11
Industry rivals:...........................................................................................................................12
Conclusion:....................................................................................................................................12
Recommendation:..........................................................................................................................12
Strengthening its presence in emerging market:........................................................................12
Acquisition of small scale boutiques:........................................................................................13
References:....................................................................................................................................14
Appendices:...................................................................................................................................18
Appendix 3. GDP of France:.........................................................................................................19
Appendix 4. Exchange rate of EUR against USD, GBP, AUD and JPY:.....................................20

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Introduction:
Management of business organisations need to carry out strategic analysis of their
respective current positions to ensure that their strategies are aligned to the market conditions.
Prajogo (2016) business organisations have to conduct analyses of the business environmental
factors like economic factors and technological factors to ensure strategic fit with these
environmental factors. They often obtain services of consultants to have these strategic analyses
conducted. These analyses also enable the companies recognise their future strategies. The aim
of the report would be conducting strategic analyses of the business environment of a business
organisation. The research would involve application of three models. The VRIO model would
be used to conduct the internal analysis. PESTEL and Porter’s 5 forces would be used to conduct
external analysis. The company would be form the substratum for the research would be
Christian Dior SE, also known as Dior (Dior.com. 2020). The company is based in France and
hence, the PESTEL would largely be viewed from the point of view of the country though it
would have mentions of other countries wherever deemed necessary. Similarly, Dior operates in
the premium fashion industry marketing apparel, accessories and skincare products. Thus, the
consultant in the research take into account the competitors of Dior wherever deemed necessary.
The consultant would then conclude the findings from the analyses and recommend future
strategies before the management of Dior.
Discussion, analysis and finding:
Internal analysis-VRIO model:
The following is the VRIO analysis of Christian Dior SE:

STRATEGIC ANALYSIS
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Value:
Christian Dior SE is able to create value for its stakeholders, both internal and external
stakeholders. The main internal stakeholders of Dior are the management body of the company
and the employees. The company earned a revenue of EUR 46826 million for the year ended
December 31, 2018 compared to the revenue of EUR 43666 million it earned for the year ended
on December 31, 2017. The company earned a net profit of EUR 6942 million in 2018 compared
to EUR 5825 million in 2017 (Dior-finance.com. 2020) (Appendix 1). Thus, the company is able
to protect the interest of the management which is generation of profits (Chien, Chen and Hsieh
2018). Secondly, the company is able to acquire and retain high market goodwill of value as high
as $89.6 billion, which again means it able to protect the interests of the management
(Forbes.com. 2020). The company in the same way is able to create value for external
stakeholder groups like investors, governments and customers. For example, the company is able
to create value for shareholders. The graph compares the share market trends of Dior against two
of its main international competitors namely, Marks & Spencer Group Plc.based in the United
Kingdom and Hermes International S.A., based in France. The graph shows that the Dior
experiences the strongest share market position among the three premium fashion giants
(Bloomberg.com. 2020) (Appendix 2). This means that company is able to give higher ROI to
investors, thus creating value for them. The company similarly can create value for government
bodies, both its home government namely, France and host country governments like the United
Kingdom in forms tax payments and employment creation in these countries. For example,
company paid income taxes amounting to EUR 2518 million in 2018. This company opens
chains of boutiques in its home country as well as host countries, like India, thus creating
employment opportunities (Mansworldindia.com. 2020). The company offers premium fashion