Giordano was founded in Hong Kong in 1980 by Jimmy Lai. Giordano consolidated its position as a leading casual apparel retailer in Asia by offering customers value for money, excellent customer service, understand customer’s needs. Besides this, key success factors like stringent selection procedures and staff’s training, operating efficiencies, success inventory control to close integration of purchasing and selling functions and short product development cycle, helping company survived the Asian economic downturn and SARS crisis. The emphasis on service and the value for money concept had proven to be successful and made Giordano’s brand really stand out.
How Giordano could sustain its past success was perhaps the most critical question confronting its management. These questions were how Giordano brand should be positioned against the competition in both new and existing market, how was the sustainability of Giordano’s key success factors and how was Giordano’s growth strategy in Asia as well as across continents.
As the result, Giordano should have same positioning strategies in both new and existing market to avoid customer’s confusion. Sustainability of Giordano’s key success factors depends on ability of top management to continue invest in human resources as human resources are most valuable assets in an organization and ability of top management to make Giordano a customer – service orientated organization. The main idea of Giordano’s growth strategy should be to learn and develop rather than merely transfer or apply known or proven strategies. Statement of the problem
Although Giordano had been extremely successful, the problems facing top management was how it could maintain this success in the years ahead. First thing was how the Giordano brand should be positioned against the competition in both new and existing market and if repositioning required in existing markets, would it be necessary to follow different positioning strategies for different markets (e.g. Hong Kong versus Southeast Asia)? Second thing was the sustainability of Giordano’s key success factors. Which of its key success factors or in other word, competitive advantages was likely to be sustainable and which ones were likely to be eroded? Third thing was would Giordano’s competitive strengths be readily transferable to other markets? Would strategic adaptations to IT strategy and marketing mix be required, or would tactical moves suffice?
Top management should decide whether to use same positioning strategies for all markets or different positioning strategies for different market depends on market environment. Sustainability of key success factors depends on the top management ability to create element such as organizational culture which is more difficult for competitor to copy. In order for Giordano’s competitive strengths to be transferable to other markets, Giordano must be carefully considering national and cultural differences in other markets.
Analysis of the causes of the problem
Giordano’s current positioning strategies are providing quality of products with value of money, high level of service provided to customers and sales staff is dedicated, ever-smiling, well-mannered and helpful. These positioning strategies had proved to be successfully in current market situation because delivery of quality service, differentiated with other brand, functionally value-added products and improvement on visual merchandising and apparel.
However, top management decided to reposition Giordano brand by upgrade its image and capture the up scale market segment. This repositioning became inconsistent with the brand image that Giordano tried hard to build over the years. This decision will cause problem with its current core target market segment. For example, failure of “Gio Ladies” is because of repositioning strategy failed to differentiate its new clothing line from its mainstream product line, and even...