Answer 1
The organizational policy of Giordano focused primarily on providing excellent customer service and quality products at competitive prices to customers. It is an established apparel retailer that has expanded across Asia Pacific region with presence in Greater China, Japan, Korea, South East Asia, India, Australia and Middle East. It targets the middle and low-income segment and is specialized in men, women and children’s casual clothing. The main reason for its geographic boundary expansion was to ensure development. It believes in encouraging value across a small number of products so that it can preserve its apparel quality. At the same time, it also helps Giordano to compete effectively with changes in market vis-à-vis fashion and lifestyle.
It has been consistent in its operation strategy and maintained its competitive pricing by having a centralized distribution center and uses outlets only for sale of garments. It extensively uses technology within its operations. Sales figures are used to forecast next day’s orders and fill the inventory at night. Keeping low inventory also helps it to react timely to changes in fashion and produce goods that meet the changing demands of the people. It therefore saves considerably through fast selling items and benefits are passed on to customers through quality garments that are low priced. Thus, its philosophy of ‘value for money’ has significantly contributed to its competitive success.
Answer 2
Giordano has been quite successful with its market strategy which relies heavily on exemplary customer service and cost leadership. It has maintained its leadership position in low priced quality garments. The strategy has been very successful during the financial crisis but it does not seem to be that effective when it increased its cost of garments that were trendier and catered to higher economic strata of society. Thus, in order to meet the demands of the segmented market, it introduced new label called Bluestar Exchange or BSE which were trendy and competitively priced. This has helped Giordano to be consistent with its market strategy of maintaining cost leadership.
Answer 3
As Giordano expands its business interests into new market segment and territories, the biggest operation management challenges that it faces is that from other international brands like Zara, Gap, Espirit, Thames etc. which are already established brands in the mid and upper segment of the market. Apart from Bluestar Exchange that meets the demands of low and mid income group, it has introduced sister brands, Giordano Ladies and Giordano Junior that target higher end segment. While the differentiation of these goods from its price conscious range is difficult, it has nevertheless compensated it with more personalized customer service. Giordano’s foray into new market segment has also put it into direct competition with international garment brands. Giordano, therefore, has to be more innovative both in its operation strategy as well as marketing approach.
Its expansion into new territories is also important as it would help it to exploit new opportunities in the era of rapid globalization. China as fast growing economy, has huge market potential as its income has significantly risen, thereby expanding its consumer market. It has been successful in China and created a niche market for its Giordano Ladies brand which cater to the changing preferences of the affluent class. It has also converted some franchisee stores into self managed outlets that have helped improve its profitability. Thus, it needs to be constantly alert and use flexible approach to meet the management challenges of its expansion across geographical boundaries.
Answer 4
Giordano must become more culturally sensitive in evolving its operation strategy in the future. In the current environment of rapid globalization, cross cultural understanding should become intrinsic part of organization culture. It must also be incorporated within its business strategy so that it can efficiently exploit the needs of new market. Up till now, Giordano has used similar operational and market strategy for all its outlets in Asia pacific region. But if it intends to expand its business beyond Asia, it must understand the socio-cultural compulsions of new markets and incorporate them within its operations. It would help it to correctly interpret the changing demands of new market and meet them by producing goods which can satisfy the needs of people.
Apart from fashion, Giordano also must ensure that it maintains its excellent customer service through training and development of its workforce. Cross cultural understanding would help it to attract new customers and earn their loyalty. At the same time, it should also strive to use local resources and help local economy by employee local people. This would greatly enhance credibility amongst the various stakeholders and customers of the region or new market. Most importantly, it should decentralize its operations so that country specific stores can respond promptly to local challenges efficiently and timely.
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Reference
- Case Study as provided.