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Giordano Case Questions Case 4 in book

1. Describe and evaluate Giordano’s product, business, and


corporate strategies

2. How do you think Giordano had/would have to adapt its marketing and
operations strategies and tactics when entering and penetrating your
country?
3. What general lessons can major clothing retailers in your country learn
from Giordano?

Background of Giordano International Limited

“The improved communication from Share Point and Outlook


allows us to make better product allocations between markets,
which has helped Giordano raise the average selling price on
our items and increase gross profit.” Cody Chan, Regional
Merchandising Lead, Giordano.

Giordano, International Limited is a retailer of men’s, women’s


and children’s quality apparel, accessories and supplying
products to third parties, founded at 1981 by Jimmy Lai in
Kowloon, Hong Kong. Giordano has become a pioneer of
customer service in the Asia-Pacific region and, as of January
2008, currently employs more that 11,400 people and operates
1800 stores worldwide in 40 countries.The company is Asia-
Pacific’s most successful retailer and sells its name under the
brands of “Giordano”, “Giordano Concepts”, “Giordano Junior”
and “Giordano Ladies”. Giordano has been publicly listed since
1991 and since then trades on the Hong Kong stock exchange
under the ticker symbol.Giordano’s success is measured by the
company’s relentless focus on its five corporate business
values of quality, knowledge, innovation, simplicity and service.
The company has its own apparel manufacturing division where
many of its own clothing styles are produced. Giordano is also
renowned for its basic and practical men’s, women’s, and
children’s T-shirts and trousers, especially denims. In
comparison, Giordano is very similar to the American based
popular retailer The Gap.
Giordano’s Vision is “To be the best and the biggest world
brand in apparel retailing.” When the Mission is “To make
people “feel good” & “look great“.[1]

Analysis

→ → → Firstly, how, if at all, should Giordano reposition itself


against its competitors in its existing and new market? Would it
be necessary to follow different positioning strategies for
different market (e.g. Hong Kong versus South East Asia)?

Answer: According to Osama Taha- “A positioning strategy


results in the image you want to draw in the mind of your
customers, the picture you want him/her to visualize of what you
offer, in relation to the market situation, and any competition
you may have”.[2]

Giordano’s current positioning strategy is based on providing


“value-for-money merchandise of discounted casual unisex
apparel”.

Giordano repositioned its brand to focus on value-added


products and broadening it appeal by improving on visual
merchandising and apparel. The company also emphasized on
the merchandise that is relatively mid-priced which means
“inexpensive yet contemporary and trendy”, and offers quality,
value and excellent customer services. Now the fact is whether
or not Giordano should reposition itself against its competitors
in its current and new markets. Repositioning is not necessary
for the entire company because Giordano’s relatively mid-priced
positioning worked well: “the inexpensive yet trendy” clothing
appealed to Asia’s frugal customers, especially during the Asian
economic crisis. However, with the Asian economy booming,
customers now have more disposable income and spending
power. Thus, Giordano could find it worthwhile to alter their
brand image into a more high-value, high-quality and therefore
higher price market.

hk_qrc_giordano_ladies_shop
This could mean primarily repositioning Giordano as a higher
priced and higher value brand. Giordano must continue to be
creative in their promotions. Perhaps they should spend more
on traditional advertising, as they spend less on advertising and
promotion than close competitors. A spokesperson, McCann-
Erickson, in his one comment about Giordano was that it was a
“good brand but not a great one. Compared to other
international brands, it doesn’t shape opinion”. A competitor of
Giordano is Esprit. They are seen as more upmarket than
Giordano, whilst being stylish and trendy. However, Esprit
promoted a “lifestyle” image, even though it is positioned
similarly to Giordano. So, Giordano could re-launch its image,
to be more stylish and thus promoting a lifestyle and not just a
brand. It is not necessary for Giordano to follow same
positioning strategies for different market but it will depend on
the market condition of a particular whether to follow
standardized or customized strategy. The company can go after
with standardized positioning strategies “value-for-money
merchandise” for different market within the same region like
South East Asian countries. But before implementing this
standardized positioning strategy Giordano needs to
understand the single market on the basis of consumer’s tastes
and preferences about the product and promotional activities.
On the other hand, the other successful strategies of Giordano
in proving excellent customer services, information system and
logistics and human resource policies and practices should be
implemented tactically for different markets. It means
customized strategies should be developed for different
countries even within Asia because there are some variations
between countries in terms of their economic, cultural and
social factors.

→ → → Giordano completely understood its core competencies


and the pillars of its success, but it had to carefully explore how
they were likely to develop over coming years. Which of its
competitive advantages would be sustained and which ones
were likely to be eroded?
Answer: The competitive advantages those worked as key
success factors for Giordano to achieve a distinct position in
the competitive markets are:

Computerization – The POS terminals that are used to record


and transmit flows of stocks to a mainframe computer which
then aids in controlling stock flow of inventory.

A tightly controlled menu – It mainly focus on a few items whose


demand and desirability can be closely monitored.

Frugality – curbed spending on advertising and tight inventory


control

Value pricing – value for money apparel The other sources of


competitive advantage for Giordano’s are:

1. A dedicated workforce in all outlets that provides quality


service: In order to maintain this Giordano follows stringent
selection procedures to ensure only desired employees are
chosen, conduct workshops on “attitude training”, follows
rotational on the job training method and performance related
pay systems on the basis of periodic performance evaluations.
2. Simplicity and speed of operations: Giordano maintained a
flat organizational structure and this facilitated easy
communication between people within the organization, helped
to make speedy decision and to manage the project efficiently.
3. A recognized brand: Giordano has received awards such as:
The American Service Excellence Award, ISO 9002 Award and
People Developer Award which helped Giordano to establish
their brand as a familiar one in over 30 countries. All these
competitive advantages and sources should be maintained by
Giordano in order to keep its current competitive position and
there are some other competitive advantages that should be
developed by Giordano in future. The future competitive
advantages can be gained through investment into the
development of employees and continued development of a
learning organization which may not be gained by the other
competitors.
→ → → A third issue to be considered was Giordano’s growth
strategy in Asia as well as across continent. Would Giordano’s
competitive strengths be transferable to other markets? Would
strategic adaptation to IT strategy and marketing mix be
required or would tactical moves suffice?

Answer: Giordano Company’s main competitive strengths


which can be transferred to other market are: the experience of
the employees, inventory controlled system, HRM practices but
the policies should be different for each country and can use the
established distribution, marketing and inbound channels
members in order to market their product out side the home
country. IT strategy which is currently used by Giordano, it
should not adopt the same strategy for other countries where
they are planning to expand their business. Because the IT
infrastructure for each country in Asia and other continents may
not be the same and the current IT strategy of Giordano may not
be supported by that particular country’s technological
structure. Giordano needs more efficient, cost effective, and
secure internal communication platform which will link its many
sites in Hong Kong and other host countries. As the cross
border business of Giordano is increasing, the company needed
a comprehensive communications tool that would help
Giordano employees conduct multisite management meetings,
share documents and collaborate for fast business decisions
and quality customer service. In such scenario Giordano can go
for partnership with the IT company (Like Microsoft), through
which they can install such a server and software through which
they can equipped their staff with real time teamwork and
presence capabilities that dramatically increased productivity.
At the same time they can decrease its multi-national direct
dialling and travel cost, as well as IT management costs. The
marketing mix strategies that are followed by the Giordano for
the existing market should not be the same for new markets
where the company is willing to enter. The marketing mix
strategies mainly deal with arrangements of the 4 Ps’. So the
strategies regarding product price, price, place and promotion
should not be the same for all target countries as the market
differs in terms of their economic, cultural, social and political
environment. But the successful strategies which are currently
used for other market can be used by Giordano as guidelines
and can develop tactical strategies for different market
according to the market situation and customers’ requirement.

Recommendation

From the above analysis we have some recommendation for


Giordano International Limited. These are:

C It is essential to start promotions to increase brand


awareness when starting businesses in new market.

C The location and site selection for establishing


Giordano’s outlet in different country will be critical. The
company should carefully select the site to position their stores
which will be convenient for the customers.

C Customer is the key and main factor for differentiation


is customer care. The company needs to follow customized
customer service strategy for each market segment.

C Giordano needs to find out possibility of outsourcing to


maintain low costs

C Extensive market research is needed to investigate


designs and fabrics required by the target customers

Conclusion

Giordano has perfectly focused in the value-for-money concept


and everything they do is managed at a world-class standard.
The management conducted their business in such an excellent
and professional manner which helped this brand to reach from
Asia to the Middle East and India, Australia, Eastern Europe, and
now in North America.

References