Giordano International Limited was founded in 1981 and is a successful retailer and distributor of casual apparels operating in East Asia, South East Asia and the Middle East. Giordano operated in 20 countries and the corporate strategies encompassed values like quality, innovation, knowledge, simplicity and service. Its core competencies lied in creating ‘value for money’ thorough efficient supply chain and creating a good brand image by means of differentiation in customer services. Giordano in the past had adopted best practices from successful brands like MacDonald, United Colors of Benetton and the Mark & Spencer. Giordano was in completion with brands like Esprit, Benneton, Baleno, Bossini, G2000, Uniqlo and U-right which also were looking for growths in new geographies. To continue sustaining the business and craving for further growth Peter Lau the CEO was critically reviewing the Key Success Factors and how the same could be transferred to other country markets that it planned to enter.
Giordano’s Competitive Advantage
Carryout a Porter’s Five Force framework
Suppliers Bargaining Power – Giordano is backward integrated with the manufacturers in China and hence the treat is low. Customers Bargaining Power – Customers seek value for money and can switch to any supplier which based on the competition, innovation and fashion of the competitors. Competitive Rivalry – is high in the casual apparel industry and this is caused due to the low growth rates. All players like Esprit, Bossini etc are aggressively competing and are currently focusing on increasing their shares in different geographies. Mainly the competition is non-price based as each one of them is under profit pressures. Threat of potential new entrants – is moderate as development of a good network and brand building requires substantial time. Some already established brands from Europe and the US may however take a different view of the Asian market and decide to make an entrance. Threat of substitutes – for casual apparel is very low and the unbranded apparel serve as a near substitute and this would be for a different target segment. Carrying out a Value chain analysis it would be
Design – Procurement of right material – production as per the designs – Outbound logistics to various retail outlets – Branding & Marketing – Sales & Services About 90% value can be created by the Production, Brand Owners and the Sales and Services and Giordano owns them all. Giordano importantly had a flat Organization Structure and investment into its human capital.
Giordano’s Key Success Factors and Transferability to other countries The KSF of Giordano are broken down from its clear customer focus and was mastering the ‘3T’ – tangibles, task and treatment, which included 1. Market Driven and Customer Focused Designs - Quick market driven apparel development and reduction of time to market due to the Organizational strengths. Capturing customers required trends into its designs. Giordano’s focus was towards stylish and sensible clothing’s with good quality providing value for money. Transferability – Capturing the customer impulse into the design is a prerequisite for any apparel retailer and this should be incorporated into the basic business model of Giordano. For this to continue being a KSF Giordano needs to capture the customer preference towards the local and international fashion trends. Giordano has in the past adopted the best practices of the apparel retailer industry and should continue doing so and at the same time crave to become a trend setter in itself by means of starting its Giordano community and blogs which provide a great insight to what the customers are looking for. For this KSF to be extended in new geographies the design system and staff need to equipped with the needs of good designer. 2. Operations Control & Supply Chain– Giordano had an efficient operations control through good information technology system and...