SWOT Analysis
Strength
1. Products are various and categorized like ladies, kids, etc so it reaches all ages and unisex
2. Providing a proffesional service so customers feel comfortable and concentration on quality at the service core
3. Many people have known Giordano as quality brand
4. Giordano was able to consistently sell value-for-money merchandise through careful selection of suppliers, strict cost control, and resisting the temptation to increase retail prices unnecessarily
5. 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
6. A quality staff recruitment for a high quality and loyal staff in Giordano from a careful staff selection
7. A well chosen supplier to get the finest supplier and keep innovating to create creative products and high quality materials
8. Prices are reasonable and keeping it normal, not to raise it up
9. Giordano store’s are located in dense population and high traffic areas
10. Move fast on a market change
11. Smart in sales opportunity and minimizing store size for the efficiencies
12. Using high technology for fast distributions. Every sales and the barcode information will be identified and transmitted directly to the company main computer and sales distribution department
13. Giordano always make sure that the stocks are always available in the store
14. Fast moving items to avoid old items piled at the warehouse or best seller items unavailable
15. Informations are fast spread to the productions so if there’s any slow moving item, Giordano will try to sell it as fast as possible and if it’s reaches the minimum number o selling it will be stopped
16. Customers are satisfied because out of stocks doesn’t happen often
17. Giordano using a smart information so they are different than others
18. Giordano aggressively promoting their brand through creative and focused campaign on customers so the marketing succesed
19. The employee have awareness of their roles in customer satisfaction and economic system
20. Integration of employees into a winning team
21. Giordano has many 1800 outlets in over 30 countries
22. Giordano offers value for money clothing with a good quality
23. Giordano maintains a flat organizational structure which makes it easy to make communication with employees within the company thus this leads to quick decision making.
24. Has excellent management and staff that offer excellent service
25. Tight inventory control that will not result in overstocking of goods
26. Has high advertising budget due to this their company is more recognizable.
27. 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
28. 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
Weakness
1. The model of the product is monoton example the simple T-shirt, jacket, etc
2. Since their stores are everywhere almost everyone wears them this could lead to
3. The IT strategy that they have adapted many not be suitable to other countries especially South East Asian countries since they may not support that technological structure.
4. Giordano’s failed ability to diffrentiate it’s core brands which is Giordano Ladies from its mainstream line.
Opportunities
1. Giordano just a have a store in Asia, maybe can expansion to a many country like Europe, America, Africa etc
2. Create a many models and make a innovation in fashion so people can be loyal in product of Giordano
3. Giordano needs to continually find new ways to improve and build it’s advantage outside and inside the industry
4. Needs to continue in strengthening its brand image through heavy advertising and excellent customer service
5. Giordano has recieved many awards like the The American Service Excellence Award, ISO 9002 Award and the People developer image which can help the company maintain their brand image
6. Should constantly upgrade their IT systems to ensure easier communication among their staff and make it more efficient.
Threat
1. Giordano has many competitors such as Esprit, Bossini, HangTen and many more
2. The enterance of many competitors in Asia.
3. Expansion into other continents like America and Canada that need to be researched carefully because this is important to success
4. Biggest threat comes from reputable players like The GAP because they have a various segment like Giordano have Giordano Ladies, Giordano Junior and etc. GAP have GAP Kids, etc.
5. Competitors and new entrants will successfully compete for good locations
6. Other competitors would be likely to try to emulate Giordano
7. Competitors could increasingly use technology to assist in their design process
Growth Strategies by Giordano
Giordano’s key success factors and sources of competitive advantage could include:
• Excellence in design: fast and market-driven new product development, due to flat organizational structure, excellent organizational communication and dedication to the needs of customers (e.g., style, fabrics, etc.)
• Excellence in management of operations, logistics and information technology systems: this includes effective supply chain management, inventory control, distribution, and integration of purchasing and selling functions. Cost savings from efficient operations are transferred to customers, thus delivering “value-for money”. Essentially, the basic criteria of sustainability should be identified, i.e. it must be difficult for competitors to copy and/or it must take time to copy, to allow Giordano to maintain its advantage at least for some time. With continuous investment in human resources and organizational commitment to service orientation; constant improvement in design and in the efficiency of operations; and efforts in increasing marketing muscle by promoting its brand; most of the key success factors, except site selection, are somewhat sustainable in the medium to long term.
• Excellence in marketing and branding: strong positioning, brand equity for excellent service and ability to deliver “value-for-money”, consistent execution of advertising and promotion to strengthen brand image.
• Excellence in service: continual commitment to providing excellent customer service and response. This is the result of integration of the corporate philosophy and leadership, service orientation of supporting functions like human resource policies (e.g., selection, training and remuneration of frontline staff) and information systems, and performance monitoring (e.g., regular evaluations of service standards at store level and mystery shopping). For instance, excellence in design and service comes from the integration of many activities in the value chain; it involves intangible elements such as organizational culture; and it does not reside in any particular individual. Thus, it is more difficult for competitors to “poach” this source of advantage and overtake Giordano, as compared to simply acquiring superior technology or poaching good managers. Moreover, even if competitors were to obtain this source of advantage, it might be difficult for them to implement it as successfully, because many factors such as the type of organizational culture and leadership would vary from company to company. Nevertheless, Giordano should never rest on its laurels. Rather, it should look into new ways of improving and strengthening its advantage. One important way of doing so is to continually invest in its human resources; as Fung (former Chief Operation Officer and Executive Director, South-East Asia) rightly said, “People are the key”.
• Good site selection: Giordano’s location strategy provides a competitive advantage because of its direct impact on ability to generate high volume customer traffic while keeping low margins.
For instance, excellence in design and service comes from the integration of many activities in the value chain; it involves intangible elements such as organizational culture; and it does not reside in any particular individual. Thus, it is more difficult for competitors to “poach” this source of advantage and overtake Giordano, as compared to simply acquiring superior technology or poaching good managers. Moreover, even if competitors were to obtain this source of advantage, it might be difficult for them to implement it as successfully, because many factors such as the type of organizational culture and leadership would vary from company to company. Nevertheless, Giordano should never rest on its laurels. Rather, it should look into new ways of improving and strengthening its advantage. One important way of doing so is to continually invest in its human resources; as Fung (former Chief Operation Officer and Executive Director, South-East Asia) rightly said, “People are the key”.
In the long term, sustainability depends on the management of Giordano in being able to make Giordano a customer-, logistics- and technology-driven learning organization. As the preceding discussion clearly shows, the main source of Giordano’s success is the integration of its primary functions (e.g., logistics and marketing) and support functions (e.g., HR and IT) in its value chain. This is largely sustainable in the medium to long term, provided that Giordano continues (1) to invest in its human resources, (2) to commit to its service philosophy and customer orientation, and (3) to monitor the industry and competition for threats and opportunities.
. 7P’S OF GIORDANO
- Product
Giordano 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. 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 offers many quality products such as t-shirts,polo shirts,jackets,pants,etc that are aimed at many target markets like young adults, adults, teenagers and even children. Giordano’s product made with high quality material. Giordano focuses on the concept of value-for-money. Giordano is constantly aiming to improve the value of the product.
- Price
Giordano’s current positioning to be that of “value-for-money” or “quality merchandise at affordable prices” [product differentiation]. The price of all Giordano apparel is affordable and acessible for the upper and middle class. The prices of their products range from Rp70.000- Rp 600.000. But the label does not matter, so the business has become value driven, because when people recognize value, that is the only game in town. So Giordano always ask ourselves how can sell it cheaper, make it more convenient for the consumer to buy, and deliver faster today than yesterday. That is all value because convenience is value for the consumer. Time is value for the customer. . Giordano use cost plus, the type of pricing that usually company is using.
- Place
Giordano store’s are located in big cities with high buying power, dense population and high traffic areas. Giordano clothing can also be bought online at the Giordano website with a WWS member card. Giordano in Singapore located its operations in densely populated housing estates in addition to its outlets in the traditional downtown retail areas.
- Promotion
Giordano spends a large proportion of its turnover on advertising and promotions. To keep listeners awake and excited, the product categories were on sale at each time slot were only released at the specified hour, so that nobody knew the next items that would be on this special sale. Listeners to the radio station were cajoled into coming to Giordano stores throughout the night. Giordano’s strength in executing innovative and effective promotional strategies. Aggressive advertising and promotions also played a significant role in the successful re-marketing of its core brand and re-launch or introduction of sister brands, Giordano Ladies, Giordano Junior and Bluestar Exchange. “World without strangers” their newest campaign has raised awarness among people in the world, this message of this campaign is clear that different genders, race, people from different cultural backgrounds can unite.
- Pysical Evidence
In markets with expensive retail space, retailers would try to maximize every square foot of the store for sales opportunities. Giordano have a strategy to involved not having a back storeroom in each store. Instead, a central distribution center replaced the function of a back storeroom. With information technology (IT), Giordano was able to skillfully manage its inventory and forecast demand. When an item was sold, the barcode information, identifying size, color, style and price was recorded by the point-of-sale cash register and transmitted to the company’s main computer. At the end of each day, the information was compiled at the store level and sent to the sales department and the distribution center. The compiled sales information became the store’s order for the following day. Orders were filled during the night and were ready for delivery by early morning, ensuring that before a Giordano store opened for business, new inventory was already on the shelves. There is also a unlimited time guarantee for customers and a three day reservation for goods that the customer would like to purchase
- People
Besides the willingness to accept employees mistakes, another factor that contributed to the success of Giordano was that it had a dedicated, trained, ever-smiling sales force. It considered front-line workers to be its customer-service heroes. People are the key. Giordano make exceptional service possible. Training is merely a skeleton of a customer service program. It’s the people who deliver that give it form and meaning. Giordano had stringent selection procedures to make sure that only those candidates who matched the profile of what Giordano looked for in its employees were selected. Selection even continued into its training workshops or attitude training. Employees must understand and appreciate every detail of the operations. Customers will also be greeted by well trainned staff who are mannered and care about the customer’s needs.
-Process
The process of purchasing Giordano goods begins when we enter the store we are greeted delightly by the Giordano staff then we select the goods that we are intrested in,we then go to the fitting room to try it on. If we like it we then purchase it we can also get buttons sewed on for free by the Giordano staff and there is also a redemption for the goods if we are not satisfied by then. There is also an another method which is purchasing online if we are we WWS member we will recieve a 12% discount for purchasing online, becoming a wws member is simply easy simply register online to become a member.
THE REASON WHY DOES GAP, ESPRIT AND THEME ALSO THE COMPETITORS OF GIORDANO
The reason is the competitor have a something the same with Giordano. Like Esprit have a same positioning as a retail with high quality product and value for money. GAP have a product or sister brand with many various segment like Giordano have a Giordano Junior, Giordano Ladies, etc and have a same positioning like Giordano are a upper middle class. And Theme International are direct competitor of sister brand Giordano, Giordano Ladies. Theme International selling a women clothes with high quality and fashionable, and then try to selling casual clothes.
Esprit is an international fashion lifestyle brand, principally engaged in the image and product design, sourcing, manufacturing, and retail and wholesale distribution of a wide range of women’s, men’s and children’s apparel, foot wear, accessories and other products under the Esprit brand name. The Esprit name was promoted as a ‘lifestyle’ image and products were strategically positioned as good quality and value for money — a position that Giordano was occupying. As of 1998, Esprit had a distribution network of over 6,500 stores and outlets in 40 countries in Europe, Asia, Canada and Australia. The main markets were in Europe, which accounted for approximately 62% of 1998 sales; and in Asia, which accounted for approximately 27% of 1998 sales. The Esprit brand products were principally sold via directly managed retail outlets, wholesale customers (including department stores, specialty stores and franchisees), and by licensees in relation to products manufactured under license, principally through the licensees’ own distribution networks.
Theme International Holdings Limited was founded in Hong Kong in 1986 by Chairman and Chief Executive Officer Kenneth Lai. He identified a niche in the local market, for high quality, fashionable ladies’ business wear, although it subsequently expanded into casual wear. The Theme label and chain was in direct competition with Giordano Ladies’. From the first store in 1986 to a chain comprising over 200 outlets in Hong Kong, China, Korea, Macao, Taiwan, Singapore, Malaysia, Indonesia, the Philippines, Japan, Thailand, Canada and Holland, the phenomenal growth of Theme was built on a vertically integrated corporate structure and advanced management system. However, its ambitious expansion proved to be costly in view of the crisis, with interest soaring on high levels of debt. In 1999, the company announced a HK$106.1 million net loss for the six months to 30 September 1998, and it closed 23 retail outlets in Hong Kong, which traded under its subsidiary The Clothing Shop. Theme International had since been acquired by High Fashion International, a Hong Kong-based fashion retailer specializing in up-market, trendy apparel.
In general, although these firms had slightly different positioning strategies and targeted dissimilar but overlapping segments, they all competed in a number of similar areas. For example, all firms heavily emphasized advertising and sales promotion — selling fashionable clothes at attractive prices. Almost all stores were also primarily situated in good ground-floor locations, drawing high-volume traffic and facilitating shopping, browsing and impulse buying. However, Giordano clearly distinguished itself from its competitors, with its high-quality service and cost leadership that together provided great customer value that none of its competitors had been able to match.
In a study by Interbrand on top Asian marquees, Giordano was Asia’s highest-ranking general apparel retailer. It was ranked number 20. The clothing names next in line were Australia’s Quicksilver at number 45 and Country Road at number 47. However, Giordano as a world label was still far off. As a spokesperson on consumer insights for advertising agency, McCann-Erickson said, ‘It is a good brand, but not a great one. Compared to other international brands, it doesn’t shape opinion’.
A threat from United States–based The Gap was also looming. Giordano was also aware that the American retailer was invading Asia. The Gap was already in Japan. After 2005, when it was planned that garment quotas would be abolished, imports into the region should become more cost-effective. Hence, Giordano had to examine whether its intention to shift towards a higher position from its current value-for-money position was viable.
DO YOU THINK THAT GIORDANO HAVE TO DO REPOSITIONING IF THEY WANT TO ENTER NEW MARKET
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.
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.
The possibility of changing current positioning in the light of developments in the industry, particularly with respect to consumers’ desire for trendier fashion, as well as the increase in the number and strength of competitors should also be discussed. This was apparent from the failure of its Giordano Ladies’ venture, because the positioning strategy failed to differentiate the up-scale segment from the value-conscious segment. Giordano has fought hard to establish its brand name for its value-for-money proposition, but it is also because of its established branding that Giordano cannot easily change its positioning. However, it can be seen that Giordano took measures to avoid the problems of brand dilution, and to overcome its apparent difficulty in moving consumers’ perception of Giordano towards a high-end positioning. For instance, it established a new product line, Bluestar Exchange, to cater to the needs of its existing value-for-money segment and revamped the core brand with extensive marketing communications and gave its stores a “new look”. Giordano initially tried to acquire Theme International in November 1999 to carry its line of up-market ladies apparel, but its take-over bid was rejected by Theme’s management and stockholders. Instead of giving up entering the up-market segment, it re-launched Giordano Ladies and Giordano Junior to carry a trendier line of apparel, with encouraging results.
For instance, the recent slight shift towards a higher end from the current low-end value-for-money positioning in Hong Kong was not fully executed in its other markets. Customers in these markets may become confused as to what Giordano stands for, and this inconsistency makes effective service strategy implementation difficult, particularly as consumers are becoming increasingly mobile and travel more frequently between Giordano’s core markets. In addition, economies of scale in apparel purchase, design and market communications may be diluted, if different strategies are followed across markets. If this trend persisted, Giordano may dilute its brand name and possibly might weaken its competitive advantage in other areas as well. Probably, Giordano would do better to keep a consistent positioning, keep its management focused on its core strengths, and send a clear message to all its staff and customers.
As Giordano enters into new markets and face strong and similarly positioned competitors in these markets (e.g., The Gap in the US, Japan and most European markets), the pressure to adopt a slightly different position that suits the unique market situation of a particular country may increase. In fact, this is illustrated by Giordano’s recent venture, Bluestar Exchange, which catered to a more price-conscious, mass-market segment. However, this strategy is extremely risky due to the costs involved in building a new marketing strategy and brand.
In conclusion, a potential strategy for Giordano could be to maintain its positioning in Hong Kong and over time slowly and gradually shift its position in its other markets slightly more up-market to follow its Hong Kong positioning. This strategy would have the added advantage that it would move upwards together with its core target segments, which is also developing upwards in terms of education and increasing disposable income (most of Giordano’s Asian markets are developing fast). We believe that in the balance, it would be better for Giordano to maintain a consistent positioning across all markets, even when Giordano decides to enter countries with entrenched competitors with similar positioning. Should these competitors be too strong, we feel that it would be better not to enter this market rather than try to establish a new brand and strategy. The main reason is that this would be expensive and high risk as less of Giordano’s core strengths could be transferred to this new market, and benefits from economies of scale could not fully be reaped (e.g., in terms of manufacturing volumes, marketing, training, etc.).
“GOOD AFTERNOON GIORDANO”, DO YOU THINK THAT IS NECESSARY? WHAT ARE THEY DOING THAT?
Giordano provide a proffesional service with make a costumer feel comfort where they there so I think it is necessary because it shows friendliness and politness towards a customer that is entering with this sentence customers will feel welcome and payed attention to this will also add to the customer’s satisfaction because if they get great service they will most likely come again to the store. This is such of good way to promote and to remind people indirectly. They do it to make something special with their service. It is also one of the ways to approach the customer more and to set mind of customer.
SHOULD GIORDANO ADAPT OR STANDARDIZE THEIR STRATEGY?
Strategy is differentiated from tactics, with greater emphasis on planning, focusing on long-term issues and being future oriented, with organization-wide impact. More importantly, an assessment of core competencies and sustainable competitive advantages, which are primary considerations for strategy formulation, is required. As alluded to earlier, core elements of Giordano’s strategy should be maintained when entering any country. This is the way to ensure a consistency in service and merchandise quality, which strengthens brand equity and positioning, and facilitates the achievement marketing communications objectives. In this respect, strategy should be seen as something to remain intact in any country. What could be changed are the tactics of implementation, which are discussed subsequently.
Giordano should go for 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 is to provide excellent customer services, information system and logistics and human resource policies and practices that should be execute 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.
The two dimensions of marketing and operations need to be addressed separately. It would be detrimental to ignore potential differences in implementation in various countries, even within Asia. However, the issue of standardizing or adapting the marketing program to the local context is a matter of degree rather than the absolute. The key determinant is the consumer, who may have significant differences in preferences towards the product and promotional mix. For example, younger customers in Singapore may prefer popular Hong Kong celebrities like Aaron Kwok and Faye Wong to endorse the apparel rather than using local artistes, whereas customers in Thailand and Philippines may prefer their own home-grown artistes more.
However, it may be far more useful to concentrate on the similarities between countries, which would allow Giordano to transfer its competencies more easily and build brand awareness more rapidly. In addition, as services are highly intangible, a strong global brand may offset this uncertainty by providing recognition and reassurance. Global branding should be supported by coordinated marketing communications and consistent corporate design. Nevertheless, when it is necessary to tailor the service to local needs, the Flower of Service concept can be applied. For instance, it is easier to provide a globally standardized core service augmented by nationally customized supplementary service elements. Giordano can therefore maintain its excellent service standards and good quality products across markets, while at the same time appealing to the local tastes/ preferences and specific market conditions (e.g., offered modes of payment).
While consistent global branding should be established, different cultures may not associate with the product/ service or brand in the same way. When designing the product/ service and communicating its brand image, it should be sensitized to cultural differences in order to avoid blunders that other companies have made in the past. For instance, when Ikea entered North America in 1985, it largely ignored American tastes and preferences. Instead, it stuck to its vision of selling “typically Swedish” products wherever it ventured in the world, and as a result, the six stores that it opened in North America between 1985 and 1990 did not become profitable. In 1990, it started adapting its merchandise mix to the preferences of Americans, and by 1994 North American sales tripled to $480 million, and Ikea expanded to having 15 stores by 1995. Thus, what Giordano could learn from this, is that in order to rapidly gain market share and large volume, Giordano must be careful to consider national and cultural differences in some aspects of its marketing mix.
The operations strategy should complement marketing, but its focus would be on internal cost cutting and efficiency. Globalization presents accessibility to cheaper or better resources, and higher volumes, leading to economies of scale and the learning curve effect. More importantly, the key idea is to learn and develop rather than merely transfer or apply known or proven strategies.
RECOMMENDATIONS FOR GIORDANO
1. It is essential to start promotions to increase brand awareness when starting businesses in new market.
2. 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.
3. 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
4. Giordano needs to find out possibility of outsourcing to maintain low costs
5. Extensive market research is needed to investigate designs and fabrics required by the target customers
DIFFERENCES TACTICS AND STRATEGIES TOOK BY GIORDANO IN INDONESIA COMPARE TO OTHER MARKET
Different tactics and strategies in Giordano Indonesia and branches all over the place is promotion. Giordano Indonesia doesn’t promote on-line buying because people in Indonesia don’t like to buy their clothes by internet. They don’t believe the product in good condition if they don’t touch the product, feel it and try to wear it. This is influence for their to decide buy or not. Giordano provide the store much better because they want customer feel comfortable inside. Giordano in Indonesia located in mall or plaza because people in Indonesia prefer hang out or wasting time in mall or plaza. Different in other branches, Giordano in other country can be access in internet and provide online shopping and they are located in crowded place in big cities, not in area in the mall.
Strength
1. Products are various and categorized like ladies, kids, etc so it reaches all ages and unisex
2. Providing a proffesional service so customers feel comfortable and concentration on quality at the service core
3. Many people have known Giordano as quality brand
4. Giordano was able to consistently sell value-for-money merchandise through careful selection of suppliers, strict cost control, and resisting the temptation to increase retail prices unnecessarily
5. 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
6. A quality staff recruitment for a high quality and loyal staff in Giordano from a careful staff selection
7. A well chosen supplier to get the finest supplier and keep innovating to create creative products and high quality materials
8. Prices are reasonable and keeping it normal, not to raise it up
9. Giordano store’s are located in dense population and high traffic areas
10. Move fast on a market change
11. Smart in sales opportunity and minimizing store size for the efficiencies
12. Using high technology for fast distributions. Every sales and the barcode information will be identified and transmitted directly to the company main computer and sales distribution department
13. Giordano always make sure that the stocks are always available in the store
14. Fast moving items to avoid old items piled at the warehouse or best seller items unavailable
15. Informations are fast spread to the productions so if there’s any slow moving item, Giordano will try to sell it as fast as possible and if it’s reaches the minimum number o selling it will be stopped
16. Customers are satisfied because out of stocks doesn’t happen often
17. Giordano using a smart information so they are different than others
18. Giordano aggressively promoting their brand through creative and focused campaign on customers so the marketing succesed
19. The employee have awareness of their roles in customer satisfaction and economic system
20. Integration of employees into a winning team
21. Giordano has many 1800 outlets in over 30 countries
22. Giordano offers value for money clothing with a good quality
23. Giordano maintains a flat organizational structure which makes it easy to make communication with employees within the company thus this leads to quick decision making.
24. Has excellent management and staff that offer excellent service
25. Tight inventory control that will not result in overstocking of goods
26. Has high advertising budget due to this their company is more recognizable.
27. 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
28. 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
Weakness
1. The model of the product is monoton example the simple T-shirt, jacket, etc
2. Since their stores are everywhere almost everyone wears them this could lead to
3. The IT strategy that they have adapted many not be suitable to other countries especially South East Asian countries since they may not support that technological structure.
4. Giordano’s failed ability to diffrentiate it’s core brands which is Giordano Ladies from its mainstream line.
Opportunities
1. Giordano just a have a store in Asia, maybe can expansion to a many country like Europe, America, Africa etc
2. Create a many models and make a innovation in fashion so people can be loyal in product of Giordano
3. Giordano needs to continually find new ways to improve and build it’s advantage outside and inside the industry
4. Needs to continue in strengthening its brand image through heavy advertising and excellent customer service
5. Giordano has recieved many awards like the The American Service Excellence Award, ISO 9002 Award and the People developer image which can help the company maintain their brand image
6. Should constantly upgrade their IT systems to ensure easier communication among their staff and make it more efficient.
Threat
1. Giordano has many competitors such as Esprit, Bossini, HangTen and many more
2. The enterance of many competitors in Asia.
3. Expansion into other continents like America and Canada that need to be researched carefully because this is important to success
4. Biggest threat comes from reputable players like The GAP because they have a various segment like Giordano have Giordano Ladies, Giordano Junior and etc. GAP have GAP Kids, etc.
5. Competitors and new entrants will successfully compete for good locations
6. Other competitors would be likely to try to emulate Giordano
7. Competitors could increasingly use technology to assist in their design process
Growth Strategies by Giordano
Giordano’s key success factors and sources of competitive advantage could include:
• Excellence in design: fast and market-driven new product development, due to flat organizational structure, excellent organizational communication and dedication to the needs of customers (e.g., style, fabrics, etc.)
• Excellence in management of operations, logistics and information technology systems: this includes effective supply chain management, inventory control, distribution, and integration of purchasing and selling functions. Cost savings from efficient operations are transferred to customers, thus delivering “value-for money”. Essentially, the basic criteria of sustainability should be identified, i.e. it must be difficult for competitors to copy and/or it must take time to copy, to allow Giordano to maintain its advantage at least for some time. With continuous investment in human resources and organizational commitment to service orientation; constant improvement in design and in the efficiency of operations; and efforts in increasing marketing muscle by promoting its brand; most of the key success factors, except site selection, are somewhat sustainable in the medium to long term.
• Excellence in marketing and branding: strong positioning, brand equity for excellent service and ability to deliver “value-for-money”, consistent execution of advertising and promotion to strengthen brand image.
• Excellence in service: continual commitment to providing excellent customer service and response. This is the result of integration of the corporate philosophy and leadership, service orientation of supporting functions like human resource policies (e.g., selection, training and remuneration of frontline staff) and information systems, and performance monitoring (e.g., regular evaluations of service standards at store level and mystery shopping). For instance, excellence in design and service comes from the integration of many activities in the value chain; it involves intangible elements such as organizational culture; and it does not reside in any particular individual. Thus, it is more difficult for competitors to “poach” this source of advantage and overtake Giordano, as compared to simply acquiring superior technology or poaching good managers. Moreover, even if competitors were to obtain this source of advantage, it might be difficult for them to implement it as successfully, because many factors such as the type of organizational culture and leadership would vary from company to company. Nevertheless, Giordano should never rest on its laurels. Rather, it should look into new ways of improving and strengthening its advantage. One important way of doing so is to continually invest in its human resources; as Fung (former Chief Operation Officer and Executive Director, South-East Asia) rightly said, “People are the key”.
• Good site selection: Giordano’s location strategy provides a competitive advantage because of its direct impact on ability to generate high volume customer traffic while keeping low margins.
For instance, excellence in design and service comes from the integration of many activities in the value chain; it involves intangible elements such as organizational culture; and it does not reside in any particular individual. Thus, it is more difficult for competitors to “poach” this source of advantage and overtake Giordano, as compared to simply acquiring superior technology or poaching good managers. Moreover, even if competitors were to obtain this source of advantage, it might be difficult for them to implement it as successfully, because many factors such as the type of organizational culture and leadership would vary from company to company. Nevertheless, Giordano should never rest on its laurels. Rather, it should look into new ways of improving and strengthening its advantage. One important way of doing so is to continually invest in its human resources; as Fung (former Chief Operation Officer and Executive Director, South-East Asia) rightly said, “People are the key”.
In the long term, sustainability depends on the management of Giordano in being able to make Giordano a customer-, logistics- and technology-driven learning organization. As the preceding discussion clearly shows, the main source of Giordano’s success is the integration of its primary functions (e.g., logistics and marketing) and support functions (e.g., HR and IT) in its value chain. This is largely sustainable in the medium to long term, provided that Giordano continues (1) to invest in its human resources, (2) to commit to its service philosophy and customer orientation, and (3) to monitor the industry and competition for threats and opportunities.
. 7P’S OF GIORDANO
- Product
Giordano 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. 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 offers many quality products such as t-shirts,polo shirts,jackets,pants,etc that are aimed at many target markets like young adults, adults, teenagers and even children. Giordano’s product made with high quality material. Giordano focuses on the concept of value-for-money. Giordano is constantly aiming to improve the value of the product.
- Price
Giordano’s current positioning to be that of “value-for-money” or “quality merchandise at affordable prices” [product differentiation]. The price of all Giordano apparel is affordable and acessible for the upper and middle class. The prices of their products range from Rp70.000- Rp 600.000. But the label does not matter, so the business has become value driven, because when people recognize value, that is the only game in town. So Giordano always ask ourselves how can sell it cheaper, make it more convenient for the consumer to buy, and deliver faster today than yesterday. That is all value because convenience is value for the consumer. Time is value for the customer. . Giordano use cost plus, the type of pricing that usually company is using.
- Place
Giordano store’s are located in big cities with high buying power, dense population and high traffic areas. Giordano clothing can also be bought online at the Giordano website with a WWS member card. Giordano in Singapore located its operations in densely populated housing estates in addition to its outlets in the traditional downtown retail areas.
- Promotion
Giordano spends a large proportion of its turnover on advertising and promotions. To keep listeners awake and excited, the product categories were on sale at each time slot were only released at the specified hour, so that nobody knew the next items that would be on this special sale. Listeners to the radio station were cajoled into coming to Giordano stores throughout the night. Giordano’s strength in executing innovative and effective promotional strategies. Aggressive advertising and promotions also played a significant role in the successful re-marketing of its core brand and re-launch or introduction of sister brands, Giordano Ladies, Giordano Junior and Bluestar Exchange. “World without strangers” their newest campaign has raised awarness among people in the world, this message of this campaign is clear that different genders, race, people from different cultural backgrounds can unite.
- Pysical Evidence
In markets with expensive retail space, retailers would try to maximize every square foot of the store for sales opportunities. Giordano have a strategy to involved not having a back storeroom in each store. Instead, a central distribution center replaced the function of a back storeroom. With information technology (IT), Giordano was able to skillfully manage its inventory and forecast demand. When an item was sold, the barcode information, identifying size, color, style and price was recorded by the point-of-sale cash register and transmitted to the company’s main computer. At the end of each day, the information was compiled at the store level and sent to the sales department and the distribution center. The compiled sales information became the store’s order for the following day. Orders were filled during the night and were ready for delivery by early morning, ensuring that before a Giordano store opened for business, new inventory was already on the shelves. There is also a unlimited time guarantee for customers and a three day reservation for goods that the customer would like to purchase
- People
Besides the willingness to accept employees mistakes, another factor that contributed to the success of Giordano was that it had a dedicated, trained, ever-smiling sales force. It considered front-line workers to be its customer-service heroes. People are the key. Giordano make exceptional service possible. Training is merely a skeleton of a customer service program. It’s the people who deliver that give it form and meaning. Giordano had stringent selection procedures to make sure that only those candidates who matched the profile of what Giordano looked for in its employees were selected. Selection even continued into its training workshops or attitude training. Employees must understand and appreciate every detail of the operations. Customers will also be greeted by well trainned staff who are mannered and care about the customer’s needs.
-Process
The process of purchasing Giordano goods begins when we enter the store we are greeted delightly by the Giordano staff then we select the goods that we are intrested in,we then go to the fitting room to try it on. If we like it we then purchase it we can also get buttons sewed on for free by the Giordano staff and there is also a redemption for the goods if we are not satisfied by then. There is also an another method which is purchasing online if we are we WWS member we will recieve a 12% discount for purchasing online, becoming a wws member is simply easy simply register online to become a member.
THE REASON WHY DOES GAP, ESPRIT AND THEME ALSO THE COMPETITORS OF GIORDANO
The reason is the competitor have a something the same with Giordano. Like Esprit have a same positioning as a retail with high quality product and value for money. GAP have a product or sister brand with many various segment like Giordano have a Giordano Junior, Giordano Ladies, etc and have a same positioning like Giordano are a upper middle class. And Theme International are direct competitor of sister brand Giordano, Giordano Ladies. Theme International selling a women clothes with high quality and fashionable, and then try to selling casual clothes.
Esprit is an international fashion lifestyle brand, principally engaged in the image and product design, sourcing, manufacturing, and retail and wholesale distribution of a wide range of women’s, men’s and children’s apparel, foot wear, accessories and other products under the Esprit brand name. The Esprit name was promoted as a ‘lifestyle’ image and products were strategically positioned as good quality and value for money — a position that Giordano was occupying. As of 1998, Esprit had a distribution network of over 6,500 stores and outlets in 40 countries in Europe, Asia, Canada and Australia. The main markets were in Europe, which accounted for approximately 62% of 1998 sales; and in Asia, which accounted for approximately 27% of 1998 sales. The Esprit brand products were principally sold via directly managed retail outlets, wholesale customers (including department stores, specialty stores and franchisees), and by licensees in relation to products manufactured under license, principally through the licensees’ own distribution networks.
Theme International Holdings Limited was founded in Hong Kong in 1986 by Chairman and Chief Executive Officer Kenneth Lai. He identified a niche in the local market, for high quality, fashionable ladies’ business wear, although it subsequently expanded into casual wear. The Theme label and chain was in direct competition with Giordano Ladies’. From the first store in 1986 to a chain comprising over 200 outlets in Hong Kong, China, Korea, Macao, Taiwan, Singapore, Malaysia, Indonesia, the Philippines, Japan, Thailand, Canada and Holland, the phenomenal growth of Theme was built on a vertically integrated corporate structure and advanced management system. However, its ambitious expansion proved to be costly in view of the crisis, with interest soaring on high levels of debt. In 1999, the company announced a HK$106.1 million net loss for the six months to 30 September 1998, and it closed 23 retail outlets in Hong Kong, which traded under its subsidiary The Clothing Shop. Theme International had since been acquired by High Fashion International, a Hong Kong-based fashion retailer specializing in up-market, trendy apparel.
In general, although these firms had slightly different positioning strategies and targeted dissimilar but overlapping segments, they all competed in a number of similar areas. For example, all firms heavily emphasized advertising and sales promotion — selling fashionable clothes at attractive prices. Almost all stores were also primarily situated in good ground-floor locations, drawing high-volume traffic and facilitating shopping, browsing and impulse buying. However, Giordano clearly distinguished itself from its competitors, with its high-quality service and cost leadership that together provided great customer value that none of its competitors had been able to match.
In a study by Interbrand on top Asian marquees, Giordano was Asia’s highest-ranking general apparel retailer. It was ranked number 20. The clothing names next in line were Australia’s Quicksilver at number 45 and Country Road at number 47. However, Giordano as a world label was still far off. As a spokesperson on consumer insights for advertising agency, McCann-Erickson said, ‘It is a good brand, but not a great one. Compared to other international brands, it doesn’t shape opinion’.
A threat from United States–based The Gap was also looming. Giordano was also aware that the American retailer was invading Asia. The Gap was already in Japan. After 2005, when it was planned that garment quotas would be abolished, imports into the region should become more cost-effective. Hence, Giordano had to examine whether its intention to shift towards a higher position from its current value-for-money position was viable.
DO YOU THINK THAT GIORDANO HAVE TO DO REPOSITIONING IF THEY WANT TO ENTER NEW MARKET
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.
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.
The possibility of changing current positioning in the light of developments in the industry, particularly with respect to consumers’ desire for trendier fashion, as well as the increase in the number and strength of competitors should also be discussed. This was apparent from the failure of its Giordano Ladies’ venture, because the positioning strategy failed to differentiate the up-scale segment from the value-conscious segment. Giordano has fought hard to establish its brand name for its value-for-money proposition, but it is also because of its established branding that Giordano cannot easily change its positioning. However, it can be seen that Giordano took measures to avoid the problems of brand dilution, and to overcome its apparent difficulty in moving consumers’ perception of Giordano towards a high-end positioning. For instance, it established a new product line, Bluestar Exchange, to cater to the needs of its existing value-for-money segment and revamped the core brand with extensive marketing communications and gave its stores a “new look”. Giordano initially tried to acquire Theme International in November 1999 to carry its line of up-market ladies apparel, but its take-over bid was rejected by Theme’s management and stockholders. Instead of giving up entering the up-market segment, it re-launched Giordano Ladies and Giordano Junior to carry a trendier line of apparel, with encouraging results.
For instance, the recent slight shift towards a higher end from the current low-end value-for-money positioning in Hong Kong was not fully executed in its other markets. Customers in these markets may become confused as to what Giordano stands for, and this inconsistency makes effective service strategy implementation difficult, particularly as consumers are becoming increasingly mobile and travel more frequently between Giordano’s core markets. In addition, economies of scale in apparel purchase, design and market communications may be diluted, if different strategies are followed across markets. If this trend persisted, Giordano may dilute its brand name and possibly might weaken its competitive advantage in other areas as well. Probably, Giordano would do better to keep a consistent positioning, keep its management focused on its core strengths, and send a clear message to all its staff and customers.
As Giordano enters into new markets and face strong and similarly positioned competitors in these markets (e.g., The Gap in the US, Japan and most European markets), the pressure to adopt a slightly different position that suits the unique market situation of a particular country may increase. In fact, this is illustrated by Giordano’s recent venture, Bluestar Exchange, which catered to a more price-conscious, mass-market segment. However, this strategy is extremely risky due to the costs involved in building a new marketing strategy and brand.
In conclusion, a potential strategy for Giordano could be to maintain its positioning in Hong Kong and over time slowly and gradually shift its position in its other markets slightly more up-market to follow its Hong Kong positioning. This strategy would have the added advantage that it would move upwards together with its core target segments, which is also developing upwards in terms of education and increasing disposable income (most of Giordano’s Asian markets are developing fast). We believe that in the balance, it would be better for Giordano to maintain a consistent positioning across all markets, even when Giordano decides to enter countries with entrenched competitors with similar positioning. Should these competitors be too strong, we feel that it would be better not to enter this market rather than try to establish a new brand and strategy. The main reason is that this would be expensive and high risk as less of Giordano’s core strengths could be transferred to this new market, and benefits from economies of scale could not fully be reaped (e.g., in terms of manufacturing volumes, marketing, training, etc.).
“GOOD AFTERNOON GIORDANO”, DO YOU THINK THAT IS NECESSARY? WHAT ARE THEY DOING THAT?
Giordano provide a proffesional service with make a costumer feel comfort where they there so I think it is necessary because it shows friendliness and politness towards a customer that is entering with this sentence customers will feel welcome and payed attention to this will also add to the customer’s satisfaction because if they get great service they will most likely come again to the store. This is such of good way to promote and to remind people indirectly. They do it to make something special with their service. It is also one of the ways to approach the customer more and to set mind of customer.
SHOULD GIORDANO ADAPT OR STANDARDIZE THEIR STRATEGY?
Strategy is differentiated from tactics, with greater emphasis on planning, focusing on long-term issues and being future oriented, with organization-wide impact. More importantly, an assessment of core competencies and sustainable competitive advantages, which are primary considerations for strategy formulation, is required. As alluded to earlier, core elements of Giordano’s strategy should be maintained when entering any country. This is the way to ensure a consistency in service and merchandise quality, which strengthens brand equity and positioning, and facilitates the achievement marketing communications objectives. In this respect, strategy should be seen as something to remain intact in any country. What could be changed are the tactics of implementation, which are discussed subsequently.
Giordano should go for 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 is to provide excellent customer services, information system and logistics and human resource policies and practices that should be execute 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.
The two dimensions of marketing and operations need to be addressed separately. It would be detrimental to ignore potential differences in implementation in various countries, even within Asia. However, the issue of standardizing or adapting the marketing program to the local context is a matter of degree rather than the absolute. The key determinant is the consumer, who may have significant differences in preferences towards the product and promotional mix. For example, younger customers in Singapore may prefer popular Hong Kong celebrities like Aaron Kwok and Faye Wong to endorse the apparel rather than using local artistes, whereas customers in Thailand and Philippines may prefer their own home-grown artistes more.
However, it may be far more useful to concentrate on the similarities between countries, which would allow Giordano to transfer its competencies more easily and build brand awareness more rapidly. In addition, as services are highly intangible, a strong global brand may offset this uncertainty by providing recognition and reassurance. Global branding should be supported by coordinated marketing communications and consistent corporate design. Nevertheless, when it is necessary to tailor the service to local needs, the Flower of Service concept can be applied. For instance, it is easier to provide a globally standardized core service augmented by nationally customized supplementary service elements. Giordano can therefore maintain its excellent service standards and good quality products across markets, while at the same time appealing to the local tastes/ preferences and specific market conditions (e.g., offered modes of payment).
While consistent global branding should be established, different cultures may not associate with the product/ service or brand in the same way. When designing the product/ service and communicating its brand image, it should be sensitized to cultural differences in order to avoid blunders that other companies have made in the past. For instance, when Ikea entered North America in 1985, it largely ignored American tastes and preferences. Instead, it stuck to its vision of selling “typically Swedish” products wherever it ventured in the world, and as a result, the six stores that it opened in North America between 1985 and 1990 did not become profitable. In 1990, it started adapting its merchandise mix to the preferences of Americans, and by 1994 North American sales tripled to $480 million, and Ikea expanded to having 15 stores by 1995. Thus, what Giordano could learn from this, is that in order to rapidly gain market share and large volume, Giordano must be careful to consider national and cultural differences in some aspects of its marketing mix.
The operations strategy should complement marketing, but its focus would be on internal cost cutting and efficiency. Globalization presents accessibility to cheaper or better resources, and higher volumes, leading to economies of scale and the learning curve effect. More importantly, the key idea is to learn and develop rather than merely transfer or apply known or proven strategies.
RECOMMENDATIONS FOR GIORDANO
1. It is essential to start promotions to increase brand awareness when starting businesses in new market.
2. 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.
3. 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
4. Giordano needs to find out possibility of outsourcing to maintain low costs
5. Extensive market research is needed to investigate designs and fabrics required by the target customers
DIFFERENCES TACTICS AND STRATEGIES TOOK BY GIORDANO IN INDONESIA COMPARE TO OTHER MARKET
Different tactics and strategies in Giordano Indonesia and branches all over the place is promotion. Giordano Indonesia doesn’t promote on-line buying because people in Indonesia don’t like to buy their clothes by internet. They don’t believe the product in good condition if they don’t touch the product, feel it and try to wear it. This is influence for their to decide buy or not. Giordano provide the store much better because they want customer feel comfortable inside. Giordano in Indonesia located in mall or plaza because people in Indonesia prefer hang out or wasting time in mall or plaza. Different in other branches, Giordano in other country can be access in internet and provide online shopping and they are located in crowded place in big cities, not in area in the mall.
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