Strategic Management Analysis: Dior's Capabilities and Knowledge

This report provides a strategic analysis of Christian Dior, examining its threshold and distinctive capabilities within the context of strategic management. It explores how Dior leverages its resources and competencies, including its workforce, fabric materials, creative and innovative capabilities, marketing strategies, and brand recognition, to achieve a competitive advantage. The report distinguishes between threshold capabilities, which enable the company to compete in the market, and distinctive capabilities, which allow it to thrive. It also discusses the importance of organizational knowledge, particularly tacit knowledge held by employees, and how Dior invests in its employees to retain them. The analysis incorporates relevant academic references to support its findings and offers insights into Dior's strategic positioning within the luxury goods industry.

Running head: STRATAGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author Note

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Discussion on Threshold and distinctive capabilities
Christian Dior popularly known as Dior, refers to a French luxury goods manufacturing and
selling organization. The organization has taken the seventh position in the list of most popular
luxury good items of the world for its exclusive collection as we as premium beauty lines.
Threshold and distinctive can be considered as to types of capabilities. While the threshold
capability helps a company to compete in the given market, distinctive capabilities allows the
organization to thrive as well as prosper (Donzé and Wubs 2019). When it comes Christian Dior,
which is a highly popular French luxury goods organization, the threshold capabilities of the
same includes its basic knowledge, skills, traits, and motive. Self-image as well a social role.
Without the mentioned social capabilities the performance of the organization would have been
substandard in several parts (Chailan 2018).
However, it is to be noted that only with the help of distinctive capabilities, the organization
could not have been reached so far. In order to move beyond the minimal performance, it is
highly required for the any organization to ensure additional performance which is known as the
distinctive capabilities. For Dior, the distinctive capabilities includes its highly creative an
innovative capabilities and superior marketing strategies.
Resources Competencies
Threshold Capabilities
(required to be able to
complete in a market)
Total number of Employees
working for the company:
84,981 employees
Fabric used: The most
common fabric used for the
Adequate workforce can be
considered as one of the
company’s threshold
competences.
Adequate amount of fabric

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creation of merchandises
includes natural cotton, wool
and silk
materials can be considered
as its second threshold
competency
Distinctive capabilities
(Required to achieve
competitive advantage)
1. High quality fabric
2. Recruiting employees
with high skills
3. Encouraging
creativity within the
organization.
4. High amount of
investment on
innovation
5. Brand recognition:
considering the fact
that Dior is one of the
most popular brands
across the world,
brand recognition can
be considered as one
of its distinctive
capabilities.
6. One of the major
distinctive
competency of
Christian Dior incudes
it’s Creativity. The
unique design and
high quality of the
merchandises sold by
the company helps its
to gain competitive

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advantages
Discussion on Organizational knowledge
When it comes to organizational knowledge, it can be considered as one of the major
component for Dior that helped it to obtain social recognition as well as competitive advantage.
Considering the fact that the knowledge of the employees working for the organization is
considered to be its major strength, Dior invest a high amount of financial resource to retain its
employees (Pouillard 2018). High remuneration and justified amount of leaves including
maternity leaves are used as a strategy to retain valuable staffs.
When it comes to Tactic knowledge it can be clearly understood that that this knowledge
are possessed by the employees sitting in the higher position in the company (Shipilov, Godart
and Clement 2017). Periodic meetings are conducted by the management of Dior in order to
ensure effective evaluation of knowledge that will be beneficial for the revenue of the
organization.

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Reference List
Chailan, C., 2018. Art as a means to recreate luxury brands' rarity and value. Journal of Business
Research, 85, pp.414-423.
Donzé, P.Y. and Wubs, B., 2019. Storytelling and the making of a global luxury fashion brand:
Christian Dior. International Journal of Fashion Studies, 6(1), pp.83-102.
Pouillard, V., 2018. Christian Dior-New York: French Fashion in the Luxury US Market.
In Global Luxury (pp. 111-131). Palgrave, Singapore.
Shipilov, A., Godart, F.C. and Clement, J., 2017. Which boundaries? How mobility networks
across countries and status groups affect the creative performance of organizations. Strategic
Management Journal, 38(6), pp.1232-1252.