UNIVERSITY OF MACAU

Giordano
MGMT408 International Business
Section: 001
10/17/2011

1) Describe and evaluate Giordanos product, business, and corporate strategies. Ans: Giordano as a fashion brand originated from Hong Kong, nowadays, it is one of the best known and established apparel retailers in the Asia Pacific region, and proceeds to expand its business into worldwide. Giordanos product: The selling product of Giordano from the preliminary mens casual apparel turns to unisex casual apparel. This shift is according to the visible demand of female consumers. Giordanos business: From the Hong Kong based casual merchandiser; Giordano expands its business geographically, for now it becomes an international apparel retailer. Corporate strategies: Giordanos adopted the vertical integration strategy (backward) as it integrated its suppliers in the supply chain. The manufacturing plants are located in Philippines and Mainland China in order to capture the low labor cost advantages. Besides, Giordano also runs differentiation strategy. The claims of Giordano which is a service oriented company, with the company aim to sell good quality product and deliver the best service experience to every customer. This business strategy is to differentiate itself by product quality as well as supreme services against its rivals.

2) Describe and evaluate Giordanos current positioning strategy. Should Giordano reposition itself against its competitors in its current and new markets, and should it have different positioning strategies for different geographic markets? Ans: Giordano currently running its value-for-money positioning and position its merchandises as a medium-low cost product. The products of Giordano can be divided into several categories like: premium product line Gio Ladies, general casual wear, and low cost product line Bluestar Exchange etc. However, the brand image of the premium line Gio Ladies is ambiguous, since consumers perceive it as a low cost product related with the unshaped brand image. Further, Giordano faces difficulties raise by the mainstream competitors like Theme and Esprit according to it keeps struggle with these seasoned players in the existing market. Thus, Giordano should reposition and clearly define itself and its product line against its competitors in the perception map of consumers, purpose to
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capture an outstanding position in current and new markets violent competitions. At the same time, Giordano should differentiate its product into a higher price level by deepen it valued asset, and the awarded perception of premium services and customized product allow Giordano achieve this objectives. Giordano should adjust its positioning strategies according to different geographic regions characteristics, like market environment, competitions, customer preferences, economic conditions etc. As the fashion industry is a fast changing industry, company has to position itself regard to the market and customer taste in different countries and re-position according to the change of market trends. The positioning strategies must shape the brand personality but carry on the core value of the company.

3) What are Giordanos key success factors and sources of competitive advantage? Are its competitive advantages sustainable, and how would they develop in the future? Ans: Giordanos success from many major factors as below: I. The management values and style: Giordanos management philosophy is willingness to try new ways of doing things, not to do things in a conventional manner, and to learn from past errors. It is a sustainable advantages since it involve all the procedure of business, it make the management more effective. In the future, they can enhance the range and wide of empowerment for more powerful management. Well-service: Giordano had received numerous service-related awards over the years; since they provide well-service to customers, such as responded seriously to the feedback collected, offer to tailor-make very large sized pants and shirts. Moreover, performance evaluations were conducted frequently at the store level as well as for individual employees. It still is a sustainable today, since most of the competitors focus on cutting cost that invest less to staff training; but a well-service performance will going to be a standard to those industry. Maintain the

II.

well-service and try to understanding what customers need may help Giordano improve their service in the future. III. Value-for-Money products: Giordano was able to consistently sell value-for-money merchandise through careful selection of suppliers, strict cost control, and by resisting the temptation to increase retail prices unnecessarily. It is not a sustainable advantage to Giordano, since
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it is general factors to other competitors. Develop more kinds of value which meet customers need may help Giordano stand out from the competitors. IV. Good inventory control: Information technology was used to facilitate inventory management and demand forecasting, such as POS. Giordanos inventory turnover on sales was reduced from 58 days in 1996 to merely 20 days by 2003. It is sustainable advantages since most competitors still using the outdated inventory system and decentralization of inventory; and it is costly to change the system immediately. Keeping updating the inventory system that may useful for their cost control. V. The right product positioning and creative advertising: Simplicity and focus were reflected in the way Giordano merchandised its good. They believed that merchandising a wide range of products made it difficult to react quickly to market change. Moreover, Giordano tended to spend relatively less on advertising and promotion than did its close competitors, preferring to adopt a more creative approach to spending such funds. It is sustainable advantages since Giordano success in positioning their products at the beginning, and creates their brand image in that area, competitors hard to challenge their market leadership.

Both factors above had been proven to success following Giordanos increasing.

4) Could Giordano transfer its key success factors to new markets as it expanded both in Asia and the other parts of the world? Ans: Since the culture gaps between different countries, it is hard to transfer the success factors in one place, but the vanguard of Giordanos management philosophy makes it much easier. Well-service performance and Value-for-Money products is the basic point to go success in Asia or other parts of the world; I think Giordano can transfer these factors, since it is the same requirement from the customers around the world, moreover, these factors are always been emphasize by Giordano and they invest much to develop them. The positioning and advertising is hard to transfer to different culture region, if they dont investigate the market thoroughly or just put the same suit to other region, they probably fail finally; so they have to do a
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research and make a strategy planning for expand in positioning and advertising segments.

5) How do you think Giordano had/would have to adapt its marketing and operations strategies and tactics when entering and penetrating your country? Ans: The success of Giordano to enter and penetrate Macau market is their properly market positioning. Giordano focus on the middle market, the price positioning is adapted to the consumption level of major Macau residents. They target on the extensive consumer. When enter Macau market, Giordano positioned itself as a retailer of value-for-money merchandise, selling discounted casual unisex apparel, with the goal of maximizing unit sales instead of margins. Giordano focus on the young and middle-aged group as their major target customer. Since this group of people are willing to expense for apparel and buy the new clothing frequently. Moreover, Giordano built their brand image through providing excellent customer service.

6) What general lessons can be learnt from Giordano for other major clothing retailers in your Country? Ans: In the whole clothing retail industry in Macau, most of the shops cant provide a satisfy service performance since the high turnover rate and culture problems of workers, Giordano provide a series of training programs and set up a reachable motive reward that can enhance workers loyalty and performance. For Esprit, they seems positioning a wrong market in Macau, less of people consume regularly in Esprit, they can learn Giordanos positioning strategy and efficiency promotion programs.

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