Preview

GE REPORT

Powerful Essays
Open Document
Open Document
7854 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
GE REPORT
www.ccsenet.org/ijbm

International Journal of Business and Management

Vol. 6, No. 5; May 2011

Strategic Analysis through the General Electric/McKinsey
Matrix: An Application to the Italian Fashion Industry
Cesare Amatulli (Corresponding author)
Professor of Fashion Marketing
Faculty of Education Science, University of Bari
Piazza Umberto I, 70121, Bari, Italy
Tel: 39-80-497-0060

E-mail: c.amatulli@formazione.uniba.it
Tiziana Caputo

Research Assistant of Marketing
Department of Business, Law and Environmental Studies, University of Salento
Via per Monteroni, 73100, Lecce, Italy
Tel: 39-83-273-2234

E-mail: tiziana_caputo@libero.it

Gianluigi Guido
Full Professor of Marketing
Department of Business, Law and Environmental Studies, University of Salento
Via per Monteroni, 73100, Lecce, Italy
Tel: 39-83-233-2665
Received: November 3, 2010

E-mail: gianluigi.guido@unisalento.it

Accepted: December 7, 2010

doi:10.5539/ijbm.v6n5p61

Abstract
Introduced in the early Seventies as a specific framework for the evaluation of investment opportunities as part of product portfolio management, the General Electric/McKinsey Matrix is still widely used for the analysis of competitive scenarios. In this study, this managerial tool is applied to the apparel sector and four well-known
Italian fashion companies are analyzed. The procedure for creating the matrix is described and a detailed presentation is made, for each company over a five-year-period, of the results relative to the two typical dimensions of the matrix: business competitiveness and industry attractiveness. Considering the current tendency of the majority of fashion and luxury companies to internationalize and develop multi-product and multi-brand diversification strategies, this study may be useful for marketers working in these sectors who intend to develop positioning and competitiveness analyses. Additionally, given the limited amount of academic studies on the



References: Abell, D.F., & Hammond, J.S. (1979). Strategic Market Planning. Englewood Cliffs, NJ: Prentice Hall. Aeffe S.p.A., Financial Statements, 1998–2002. Amatulli, C. (2009). Il lusso esteriorizzato e il lusso interiorizzato. Bari: Cacucci Editore. Benetton Group S.p.A. (1998–2002). Financial Statements. Bergen, M., & Peteraf, M.A. (2002). Competitor Identification and Competitor Analysis: A Broad-Based Managerial Approach Boyd, H.W., & Walker, O.C. (1990). Marketing Management: A Strategic Approach. Homewood, IL: Richard D. Brun, A., Caniato, F., Caridi, M., Castelli, C., Miragliotta, G., Ronchi, S., Sianesi, A, & Spina G. (2008). Carcano, L., & Catalani, A. (2007). Il lusso alla ricerca di un’identità. Economia & Management, 5, 69–85. Carcano, L., & Rovetta, B. (2009). Strategia multi-brand per i beni simbolici. Economia & Management, 5, 47–64. Chakravarthy, B., & Henderson, J. (2007). From a hierarchy to a heterarchy of strategies: adapting to a changing context Chiari, C. (2009). Everlasting Luxury. Milan: Le Fonti. Cooper, L.G. (2000). Strategic marketing planning for radically new products. Journal of Marketing, 64 (1), 1–15. Cooper, R.G., Edgett, S.J., & Kleinschmidt E.J. (1999). New product portfolio management: practices and performance Cooper, R.G., Edgett, S.J., & Kleinschmidt E.J. (2001). Portfolio management for new products. Cambridge, MA: Perseus Books. Corbellini, E., & Saviolo, S. (2009). Managing Fashion and Luxury Companies. Milan: Etas. Day, G.S. (1977). Diagnosing the Product Portfolio. Journal of Marketing, 41 (2), 29–38. Fionda, M., & Moore, M. (2009). The anatomy of the luxury fashion brand. Brand Management, 16 (5/6), 347–363. Giorgio Armani S.p.A. (1998–2002). Financial Statements. Gluck, F., & Kauffman, S. (1979). Using the strategic planning framework. McKinsey Internal Document in Readings in Strategy, 5–6. Grönroos, C. (1997). Value-driven Relational Marketing: from Products to Resources and Competencies. Guido, G. (2005). La Dimensione dei Rapporti con i Consumatori nelle Imprese Orientate al Marketing Competitivo Guido, G. (2010). Un Riesame dei Criteri per la Valutazione della Customer Satisfaction: Il Modello Conoscenze-Speranze Hermes Lab, Camera Nazionale della Moda Italiana. (2003). Segnali sul Futuro nell’Economia della Moda. Hofer, C.W., & Schendel, D. (1978). Strategy Formulation: Analytical Concepts. St. Paul, MN: West Publishing Company. Jan, Y.C. (2002). A three-step matrix method for strategic marketing management. Marketing Intelligence & Planning, 20 (5), 269–272. Jin, B. (2004). Apparel industry in East Asian newly industrialized countries. Journal of Fashion Marketing and Management, 8 (2), 230–244. Jonk, G.J. (2007). SBU 2.0: a new tool for selecting business opportunities for the multi-unit organization. Kapferer, J.N., & Bastien, V. (2009). The specificity of luxury management: Turning marketing upside down. Kerzner, H. (2009). Project Management. Hoboke, NJ: John Wiley&Sons. Kotler, P., & Caslione, J.A. (2009). Chaotics: The Business of Managing and Marketing in the Age of Turbulence Lilien, G.L., & Rangaswamy, A. (2004). Marketing Engineering. St. Victoria, BC: Trafford Publishing. McDonald, M. (2007). Marketing Plans. How to prepare Butterworth-Heinemann Ltd. https://www.mckinseyquarterly.com/Enduring_ideas_The_GE-McKinsey_nine-box_matrix_2198 (July 10, 2010). O’Shaughnessy, J. (1995). Competitive marketing: a strategic approach. London, UK: Routledge. Okonkwo, U. (2009). The luxury brand strategy challenge. Journal of Brand Management, 16, 287–289. Paley, N. (1999). The Manager’s Guide to Competitive Marketing Strategies. Boca Raton, FL: CRC Press. Peters, J. (1993). On product and service management. Management Decision, 31 (6), 49–51. Porter, M. (1982). La Strategia competitiva. Bologna: Compositori. Prahalad, C.K., & Hamel, G. (1990). The Core Competence of the Corporation. Harvard Business Review, May-June. Ramanujam, V., & Varadarajan, P. (1989). Research on corporate diversification: a synthesis. Strategic Management Journal, 10 (6), 523–551. Robinson, S.J.Q., Hichens, R.E., & Wade D.P. (1978). The directional policy matrix: tool for strategic planning. Rumelt, R. (1982). Diversification strategy and profitability. Strategic Management Journal, 3 (4), 359–369. Taplin, I.M., & Winterton, J. (2004). The European clothing industry. Journal of Fashion Marketing and Management, 8 (3), 256–261. Valentino S.p.A. (1998–2002). Financial Statements. Wind, Y., & Mahajan, V. (1981). Designing Product and Business Portfolios. Harvard Business Review, January-February. Wind, Y., Mahajan, V. & Swire D. (1983). An empirical comparison of standardized portfolio models. Journal of Marketing, 47 (2), 89–100.

You May Also Find These Documents Helpful

  • Better Essays

    References: Dess, Gregory G., Lumpkin G., Eisner A., & McNamara G. (2012). Strategic Management. (6e).…

    • 1287 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Coach Inc. Case Analysis

    • 1060 Words
    • 5 Pages

    The profit potential that exist in the luxury goods industry could be better understood through an analysis of Porter’s five forces model. Starting with the threat of entry, the industry is unlikely to have new entrants because of the sustained competitive advantages of the existing successfully luxury brands. Leading companies such as Coach, Michael Kors, Salvatore Ferragamo, Prada, and etc. all have brand name recognition due to their success and popularity. According to the article, “To be unique and exclusive you cannot be ubiquitous.” (Gamble, 2015, C-81) For instance, Coach, Inc. strengthened their brand by becoming a leader in their accessible luxury segment by focusing on being unique in this market. Coach, Inc. and the other popular brands, have strong personal identifications because of the strategies they put in place. For this reason, new entrants to the market will have trouble attracting consumers who stand strong with the popular brand because of their loyalty. The power of suppliers within the industry for the luxury good market is low as the industry is not very concentrated. Materials to produce luxury goods, such as leather, are supplied in various countries throughout the world. For Coach, Inc. the case states, “All of the company’s leather products were manufactured by third-party suppliers in Asia.” (Gamble, 2015, C-71) Since Coach and the other…

    • 1060 Words
    • 5 Pages
    Powerful Essays
  • Best Essays

    Keller, K.L. & Kotler, P., (2009). Marketing Management (13th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.…

    • 4123 Words
    • 17 Pages
    Best Essays
  • Good Essays

    Dawn as the Brand

    • 1801 Words
    • 8 Pages

    Kotler, P. & Keller, K.L. (2009). Marketing Management. Upper Saddle River, NJ: Pearson Prentice Hall.…

    • 1801 Words
    • 8 Pages
    Good Essays
  • Best Essays

    Case Study: Aquascutum

    • 3088 Words
    • 13 Pages

    Kapferer, J-N. and Bastien, V. (2009) The Luxury Strategy: break the rules of marketing to build luxury brands. London: Kogan Page.…

    • 3088 Words
    • 13 Pages
    Best Essays
  • Satisfactory Essays

    Defining characteristic of the luxury goods industry are the market size and growth rate, scope of rivalry presence of forward/backward vertical integration Consumer characteristics Degree of product differentiation. The global luxury goods industry was expected to grow by 7% during 2006 to reach $112 billion. The scope of rivalry in the industry was global with Italian luxury goods companies accounting for 27% of industry sales in 2005, French luxury goods companies controlling 22% of the industry, Swiss companies holding a combined market share of 19%, and U.S. companies accounting for 14% of industry revenues. Most luxury goods manufacturers were vertically integrated into the operation of retail stores. Signature like Armani, Versace, and other designers were handcrafted under the supervision of the designer. Coach products and diffusion lines offered by other luxury companies were produced by low-cost contract manufacturers. Traditional luxury consumers in the U.S. ranked in the top 1% of wage earners with household incomes of $300,000 or better, a growing percentage of luxury goods consumers earned substantially less, but still aspired to own products with higher levels of quality and styling. Manufacturers of the finest luxury goods sought to exploit middle-income consumers’ desire for such products by launching “diffusion lines” that offered “affordable” or “accessible” luxury . Key differentiating features include product quality, image and reputation, customer service, styling, and store ambiance.…

    • 1974 Words
    • 6 Pages
    Satisfactory Essays
  • Powerful Essays

    It is used by marketers who have objectives for growth. Igor Ansoff’s matrix offers strategic choices to achieve the objectives. There are four main categories for selection.…

    • 856 Words
    • 4 Pages
    Powerful Essays
  • Good Essays

    Gucci Firm Analysis

    • 819 Words
    • 4 Pages

    David Fishman October 20, 2008 MGMT 401 Gucci Business-Level and Corporate Strategy During the late 1990’s, Gucci portrayed the characteristics of a firm with a differentiated business-level strategy. Gucci provides value to their customers with high quality luxury goods which consist of unique product features in relation to their rival competitors. One example of Gucci’s distinct quality is the prestigious image of their brand name using the famous “GG” logo on their items. Gucci is a successful firm in the luxury goods industry with many resources and capabilities that differentiate them from other companies within the industry. The first resource is the management team of Gucci following the millions in losses during the early 1990’s. Two managers in particular are Dominco De Sole, head of Milan office, and Tom Ford who replaced Dawn Mello as creative director in 1994. The duo of Ford and Sole turned the company around from near-bankruptcy to a close rival with LVMH, the luxury goods powerhouse. The two of them possess an intangible resource to Gucci that is valuable, rare, inimitable, and non-substitutable. Ford and Sole are considered to be valuable to the firm because of their leadership and vision to make Gucci a global presence and rare because their management skills are unlike any other firm in the luxury goods industry. What makes the management team a sustainable capability is the difficulty for other firms to match their business strategy from financial decisions to marketing abilities. Another resource that Gucci has used to gain a competitive advantage is its glamorous fashion sense that captures consumers all over the world. This resource only has the valuable characteristic however its quality is very significant to the Gucci brand. It is not a sustainable advantage because competitors also use a brand logo to maintain a loyal customer base and the…

    • 819 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Retrieved May 2006. Euromonitor (2002a), “Inditex”, Retail Monitor International, Vol XIII, pp. 41-72. Euromonitor (2002b), “The Gap Inc”, Retail Monitor International, Vol XIII, pp. 3962. Euromonitor (2005), “Clothing and footwear in Sweden”, Euromonitor, London. Expansion (2001), “Mango sera la primera cadena de moda internacional que entre en Italia”. February 14, 2001. Fabrega, F. (2004), Zara. El modelo de negocio de Inditex, Claves de gestion, Madrid. Fernie, J., Moore, C., Lawrie, A. and Hallsworth, A. (1997), “The internationalisation of the high fashion brand: the case of central London”, Journal of Product & Brand Management, Vol 6 No 3, pp. 151-162. Flavian, C. and Polo, Y. (2000), “Inditex (1994-1999)”, in Munuera, J.L. and Rodriguez, A.I., Estrategias de marketing para un crecimiento rentable. Casos practicos, ESIC, Madrid, pp.133-161. Foro de Marcas Renombradas Españolas (2003), Made in Spain. Hecho en España. La imagen de España y sus marcas en el mundo, ICEX. Foroohar, R. (2005), “Fabulous Fashion”, available from . Retrieved May 2006. Gap Inc (2000-2005), Annual Reports, San Francisco-California.…

    • 8726 Words
    • 35 Pages
    Powerful Essays
  • Powerful Essays

    2. “Let Them Eat Cake: Marketing Luxury to the Masses – as well as the classes”, Pamela Danziger…

    • 7537 Words
    • 31 Pages
    Powerful Essays
  • Powerful Essays

    Cravens, D. W. & Piercy, N. F., (2006), Strategic Marketing, (8th Edition), New York: McGraw-Hill.…

    • 5244 Words
    • 21 Pages
    Powerful Essays
  • Satisfactory Essays

    lv japan

    • 1056 Words
    • 5 Pages

    In this study, the opportunities and challenges, Louis Vuitton, the leading European luxury sector multinational firms in Japan, given the unique characteristics of brand management and the integration of culture and consumer behavior in Japan. In recent decades, Japan was the most lucrative market Louis Vuitton, but it seems that the global economic crisis has led to a decrease in sales. Facing a weak economy and a shift in consumer preferences, Louis Vuitton has its own unique strategy to adapt to the Japanese market. Days, based on the logo and charge a high price, it seems, gone, as there is more interest in craftsmanship and value for money. To boost sales, the company was forced to run less expensive collections are made with cheaper materials. The brand is also opening stores in small towns, where temptation logo still works. Over the years, Japanese consumers have shown enthusiasm and passion for the famous brand. What were the keys to a successful business model Louis Vuitton, in the Japanese market?…

    • 1056 Words
    • 5 Pages
    Satisfactory Essays
  • Satisfactory Essays

    The competitive advantages of these companies are the brands that are already established, accepted and appreciated as a source of luxury and quality for their clients. The designer itself is also an important advantage not just because of the reputation that they have, companies try to have designers with experience and knowledge. Designers are part of the core activities of these of companies; they follow the production process of haute couture dresses for the fashion shows being one of the main sources of advertising and marketing for these brands. The location is also essential for the business, cities like New York, Paris and London, where are made the fashion shows and where are the major infrastructures for industry. Also the outlets are an important source of profit of the company, telling the value of the brand for consumers.…

    • 263 Words
    • 1 Page
    Satisfactory Essays
  • Good Essays

    Project Plan

    • 2849 Words
    • 12 Pages

    • A detailed market share for the current fashion market both in Singapore and Italy.…

    • 2849 Words
    • 12 Pages
    Good Essays
  • Better Essays

    (2) This case explores the competitive advantage in the world of high fashion luxury goods. Does the advantage come only from the brand name or there are other advantages? Louis Vuitton and Gucci are brand names which are always associated with high fashion and are among the most successful international fashion houses.…

    • 1090 Words
    • 5 Pages
    Better Essays

Related Topics