Chapter 5– Dior’s Strengths from a Resource-Based View
After 75 years, Dior continues to stand atop the worlds of haute couture and luxury fashion. This feat is particularly challenging in such a niche market. However, Dior continues to push the industry and its competition forward through its commitment to craftsmanship, quality control, endorsements, and customer service.
In Chapter 5, we discuss the use of value-chain analysis to identify resources and capabilities. Of particular interest is the model proposed by McKinsey & Company. This model suggests that firms create value by way of six distinct activities: technology development, product design, manufacturing, marketing, distribution, and service. The model holds that firms can create value by developing one of these areas or a combination of them. Dior creates value by focusing on product design, marketing, and service.
First, Dior creates value by way of product design. Not just anyone can enter the haute couture market and even fewer can maintain the stronghold that Dior occupies. From its inception, the firm was guided by Christian Dior’s truly unique perspective on fashion. He redefined fashion by infusing a modern approach with elements and notes of times past. Today, Dior executes this vision by employing the very best seamstresses — many of whom have been with the firm for decades. Dior sources obscure and expensive fabrics and materials and then fashions them by hand, using time consuming and hand-executed techniques. This technique provides a certain aesthetic and high level of quality, which allows the firm to price their products at a premium. Consumers are willing to pay the price for a Dior gown or handbag because they can rest assured that the item is of the finest quality and construction that money can buy.
Second, Dior’s marketing strategies are among the best in any industry and certainly haute couture. A main component of the firm’s strategy is to sign endorsements with celebrities of international acclaim. The firm has signed Natalie Portman, Charlize Theron, Jennifer Lawrence, and many more. These endorsements create a synergy, by which the firm benefits from the influence that many of these celebrities carry. Dior then places their endorsers in aesthetics that only Dior can recreate. Whether it be breathtaking landscape photography/videography or silk backdrops, Dior excels at communicating luxury through images.
Third, Dior is known around the world for its commitment to customer service. Once a customer spends a certain amount of money with Dior each season, he/she receives key privileges. Dior regularly flies out its seamstresses and atelier’s to client’s locations for fittings and adjustments. In a famous scene from the “Dior and I” documentary, Raf Simmons loses his temper when a fitting is delayed — just weeks before his first collection with Dior is to debut — because an atelier was flown to New York City due to a client request. Raf did not understand that haute couture is the house’s main priority — collections come and go. This singular instance underscores Dior’s commitment to superior customer service.
Taken together, these three focus areas continue to be a key driver of value for Dior.
