Christian Dior SA SWOT and PESTLE Analysis

Opportunities

1) Chance of consolidation and buying smaller competitor: The massive global slowdown especially in luxury goods industry has resulted in different consumer purchasing behaviour. In many parts of the world the focus has shifted to from absolute luxury brands to affordable luxury brands. In such scenario the cash-rich fashion houses can look to grow by acquiring smaller competitors.

2) Expansion in male product portfolio: Majority of the products a focused towards female population. The Group manufactures the accessories and apparels for male consumers but there still exist an opportunity to be more innovative and expand male-focused product portfolio.

3) Increasing technological innovation: The present generation is probably most tech-savvy of all times. The popularity of smart watches is an indication of that. The Group must try to bring in more technological innovation in its products. The recent purchase of stakes in Rimowa GmbH that specialises in electronic baggage tag technology by LVMH Moët Hennessy Louis Vuitton SA is a step in that direction.

4) Expansion in emerging markets- Taiwan, Thailand and India: The young populations in the mentioned countries have started to buy luxury goods in search of exclusivity and uniqueness. However the key to meeting their demand lies in Omni-channel presence.

Threats

1) Counterfeiting and parallel distribution: Goods selling from illegal channels or fake goods may damage the brand image and shake consumer brand perception. This has directly impact on revenue and earnings. The Group must take all necessary steps to counter this.

2) International exposure and uncertainties: The group is subjected to risks and uncertainties all around the globe. The dipping oil-prices leading to major currency shake-ups, terrorist attacks in France and economic turmoil created by Brexit all impacted the consumer sentiments and thereby the sales of the group.

3) Fluctuations in number of tourists: The weak economic environment along with geopolitical instability adversely affected the number of tourists. In Taiwan massive reduction in Chinese tourists led to lower sales figure for the company.

4) Strong competition from brands such as Chanel: Brands such Chanel have kept up their pace with changing times and pose a significant challenge to the future growth prospects of Christian Dior Group.

References

1. Dior Finance: https://www.dior-finance.com/en-US/Documentation/InformationsReglementees/01,02_RapportsFinanciers.aspx/

2. Markets Ft: https://markets.ft.com/data/equities/tearsheet/profile?s=CDI:PAR

Political

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Economic

This section is available only in the 'Complete Report' on purchase.

Social

This section is available only in the 'Complete Report' on purchase.

Technological

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Legal

1. Strong compliance standards for suppliers: A socially and legally responsible corporation needs to implement strong compliance standards for suppliers, so that there are no legal, ethical or social violations. Christian Dior outsources manufacturing of several of its products in countries such as China. Ethical and social compliance standards for suppliers is a critical pillar of Christian Dior’s workplace accountability programs and it covers policies such as protection against child labor, forced labor, discrimination, fair wages and healthy workplace. The suppliers are mandated to follow the same and Christian Dior conducts random audits to ensure proper implementation.

2. PETA allegations over cosmetic testing: Christian Dior along with other leading cosmetic companies have been accused by PETA of breaking UK and European law by having its cosmetics products and their ingredients tested on animals in China. These kind of allegations mar the reputation of the company and if proven true may also result in financial liabilities.

Environmental

This section is available only in the 'Complete Report' on purchase.

Political

This section is available only in the 'Complete Report' on purchase.

Economic

This section is available only in the 'Complete Report' on purchase.

Social

This section is available only in the 'Complete Report' on purchase.

Technological

This section is available only in the 'Complete Report' on purchase.

Legal

1. Strong compliance standards for suppliers: A socially and legally responsible corporation needs to implement strong compliance standards for suppliers, so that there are no legal, ethical or social violations. Christian Dior outsources manufacturing of several of its products in countries such as China. Ethical and social compliance standards for suppliers is a critical pillar of Christian Dior’s workplace accountability programs and it covers policies such as protection against child labor, forced labor, discrimination, fair wages and healthy workplace. The suppliers are mandated to follow the same and Christian Dior conducts random audits to ensure proper implementation.

2. PETA allegations over cosmetic testing: Christian Dior along with other leading cosmetic companies have been accused by PETA of breaking UK and European law by having its cosmetics products and their ingredients tested on animals in China. These kind of allegations mar the reputation of the company and if proven true may also result in financial liabilities.

Environmental

This section is available only in the 'Complete Report' on purchase.