GIORDANO INTERNATIONAL SUSTAINED SUCCESS BEYOND 2005 Case Study Solution
Problem Diagnosis
Giordano International was incorporated in the year 1983 and it has been positioned as the leading casual apparel retailer in Asia Pacific by offering classic, simple designs, excellent customer service and value for money. The company had been improving its operating efficiency constantly and it survived the outbreak of Severe Acute Respiratory Syndrome (SARS) and the Asian economic downturn. Now the company has been facing newer challenges in the international and existing markets.
These challenges included the higher interest rate, surging rents, increased competition and the omnipresent threat from the avian bird flu. The three primary issues which were now faced by Giordano International were positioning because there would be different sets of strategies for the different markets therefore, the management of Giordano International wanted to know that how to position its brand in existing and new markets.
The second issue faced by the company was the issue of sustainability because of the stiff competition in all the markets. The trends in the industry were set by the customer preferences and taste. Finally, the third challenge faced by the management of the company was related to its growth strategy. Different markets of the company had their own preferences; therefore, adaptability posed another significant challenge. Strategies will have to be formulated for Giordano International for its intermediate and the long-term future.
Case Analysis
First of all, we begin with the analysis of the Giordano International’s business product and the corporate strategies.
Evaluation of Giordano International’s business, product and corporate strategies
The main product of the company is casual clothes for women, men and the children. The company has different types of brands such as Blue star, Giordano Junior, Giordano Ladies, and Giordano. The business of the company is that it is the retailer itself and it was initiated in the year 1980 in Hong Kong. The company has become a pioneer in the customer service in the Asia Pacific region by focusing on five corporate values, which include service, simplicity, knowledge, quality and innovation.
The main business strategy of Giordano International is to understand its customers and provide value for money to them. The goal of the company is to become the leading retailer shop for casual apparel under cost so that the customers of the company are happy. There is a lot of similarity between their brand and the American brand, The Gap, however, the target market and the business strategies of the company are different.
The corporate strategies of the company mainly consider the other manufacturers, suppliers and the global corporate market of the competitors. China is the main target country for Giordano International. This is because it was easy for the management to coordinate with its supplies to produce high quality products. However, when the economy of China deteriorated, it was the first one to experience the bad flow. Nonetheless, the management of Giordano International had maintained the quality and uniqueness of its products no matter how negatively affected the economy was.
Porter’s Five Forces Model
The five forces have been analyzed briefly as follows:
Suppliers Bargaining Power: The threat of suppliers is low for Giordano International because it is backward integrated with the manufacturers in China.
Customers Bargaining Power: The bargaining power of the customers is high because they are looking for quality products and value for money. They can easily switch to other competitors because of fashion trends and innovation.
Competitive Rivalry: The competition is high in the casual apparel industry because of the low growth rates. All the players in the market such as Bossini, Esprit etc are aggressively competing against one another in order to increase their market share. This competition is mainly non-priced and it is based on profit pressures.
Threat of New Entrants: This threat is moderate because the brand building and the development of the networks requires time and money. However, despite this some of the entrants from the US or Europe can decide to enter this industry by taking a different view.
Threat of Substitutes: This threat is low in the industry because the unbranded apparel only serves as a substitute, which constitutes a different target market.
GIORDANO INTERNATIONAL SUSTAINED SUCCESS BEYOND 2005 Harvard Case Solution & Analysis
SWOT Model
The strengths, weaknesses, opportunities and threats facing Giordano International are defined briefly below:
Strengths
- The employees of the company provide a professional service to the customers and they emphasize on service and quality.
- The company has been successful in selling value for money merchandise through strict cost controls and careful selection of the suppliers.
- The stores of the company are located in the high traffic and dense population areas.
- The company is targeting the unisex casual clothes, therefore, female and males can use their products.
- The infrastructure of the company is strong because it allows the distribution to be conducted efficiently in international and national markets.
- The employees of Giordano International have received special training and are aware about their roles in customer satisfaction and the economic system............
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