Dior or the House of Dior was established in 1947 by Christian Diorwho controlled and managed the house for ten years. After his death in 1957, Christian Dior's young assistant, Yves Saint Laurent became the art director of the House of Dior. His Spring 1958 collection saved the House of Dior from being shut down. Trapeze collection was successful and this line opened its way to international stardom but his later collections, for example, Fall 1958 collection did not make it big in the fashion world. After the disastrous 1960 season collection, he was replaced by Marc Bohan. Marc Bohan's first collection Slim Look was launched under the Dior label and he continued to be the creative director of this company until 1989. During this period, he received two Golden Dice (1983 and 1988).
Other than the ready-to-wear collections such as "Miss Dior","Baby Dior" (1967) and "Christian Dior Monsieur" (1970). The house launched perfumes for men like the Eau Sauvage(1966), Poison (1985), Fahrenheit (1988), Dune (1991), Dune for Men (1998), Dolce Vita (1995 ) and so on. The brand developed its own line of cosmetics Christian Dior Cosmetics which was launched in 1969 and constantly renewed.
In 1985, Bernard Arnault, the chairman and CEO of the Louis Vuitton-Moet-Hennessy (LVMH), bought Dior. The Italian designer Gianfranco Ferre became the head designer at Dior and replaced Bohan in 1989.His first Dior haute couture collection(1989), was successful and subsequently received the De d'Or(Golden Thimble award). Ferre announced his last collection (Spring 1997 collection) for the Dior label in 1996 before moving on to set up his own label. In 1997, Britain's John Galliano was appointed as the new Dior head and people found similarities from Dior's style in John's creations.
Dior continues to actively pursue its proactive growth strategy and has opened many stores, particularly in Asia. From 159 stores in 2003, the group increased its portfolio of stores to 200 by early 2006.
Priority was given for the development of the leading brands of the group in Asian countries. The group's strategy was to determine where to invest and anticipate the movement in developing countries.
Dior's growth also depends on new technologies like theInternet. Hence there is an increase in the sale of online luxury products in America compared to the other countries.
The group also uses natural growth: Dior acquired its own skills and increased its turnover, for example, by launching its own brand of fine jewelry. In addition, the group refocused its luxury business on its core brands: those whose potential to set the cash registers ringing was invested in to retain the profit momentum.The group's strategy was not only to increase its turnover but also to make its mark as the leading luxury group in the industry.
In terms of risks: when there is an element of risk involved, the customer thinks twice. Asians are very demanding in terms of service, and they primarily look for product quality. The product standards should qualify the consumers' expectations for them to be faithful towards the brand.
In terms of profitability: Asians travel a lot and purchase most luxury products directly in France, which suggests that they buy less or sometimes avoid buying in their own countries.This trend shows that the high investments made in the opening of these shops in Asian are not likely to be recovered. Dior has abandoned multi-brand boutiques and now sells products of the group brands only. This has contributed to build a better image for the group and to have control over sales and counterfeiting. This shift in strategy led to the creation of 15 specialty shops between 2002 and 2003.
[...] The group encourages young creative talent to “connect” the different brands in its portfolio The group has come to realize that the youth possess a certain modicum of power in regard to parents' purchasing behavior; realizing this shift in power, Dior targets the youth with ad campaigns and products more suited to this segment. Galliano revolutionized Dior). The group also invests heavily in research and development. The group is constantly innovating, be it new products, new lines , or new packaging, with all its launches proving to be major successes.Thus, these investments generate significant cash flow and help to renew the group's image. [...]
[...] Trends in internationalization for the next five years The Dior's group strategy has always been to follow the development of large countries and try to anticipate the movement in developing countries. The geographical areas in which the group plans to expand: In addition to strong growth in the U.S. and its successful implementation in Europe and Japan, to the group plans to continue this trend by increasing its presence in China (already 25 stores), and India stores). Its implementation strategy in these regions represents a valid investment. [...]
[...] Operational Marketing Distribution in the luxury market To protect the image of its luxury products, the brand resorted to an exclusive distribution channel (limited outlets or in a cluster of shops selling the same brand The group'sinternational development over the last 10 years Internationalization strategy With 83% of its sales realized overseas, expansionof shops are concentrated in large areas like the U.S., Europe and Asia. The multi-brand outlets such as department stores provide authority in the international arena by playing the role of an international showcase.This is especially true for the United States whose vast territory holds out potential for a massive network expansion . [...]
[...] BUSINESS STRATEGY -The group introduces new concepts to the brand and the diversification of the products helps the brand retain old and attract new customers. J'Adore Dior). -Customer loyalty, relationship marketing, direct marketing, websites. PRODUCTION STRATEGY Organization of production: -Disciplined organization, firm control over distribution. BUSINESS STRATEGY -Selective retailing sales decreased by in the market. PRODUCTION STRATEGY - Dividing the textile and clothing business, with manufacturing in Italy and China is a potentially risky strategy; - Discontinuation of certain licenses (lingerie, pantyhose). [...]
[...] MARKETING STRATEGY Distribution Policy: External growth: Investment in acquiring, Seldico Growth: expanding the retail network, expansion of distribution network in all regions of the world-bigger shops in ideal strategic locations Example:- Louis Vuitton and Dior boutiques at the Plaza 66 in Shanghai, the new fashion hotspot. Internationalization: Enhancing presence in Japan. WEAKNESSES FINANCIAL SITUATION Decline in operating profit in the sector of watches and jewelry. Sectors such as wine, champagne, watches and perfumes have seen their revenues drop in 2003. [...]
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