Case Analysis: Giordano Holdings
Situation:
Giordano saw that it is difficult to achieve rapid growth if they will just operate the business in Hong-Kong, so they decided to venture into foreign markets mostly in neighbouring countries. The sales from Taiwan, Singapore plus the Hong-Kong stores contributed almost 90% to their sales. The service concept (where Giordano was known in Hong-Kong) was also espoused in Singapore stores, while price slashing strategy was used in Taiwan. Giordano strengthened its distribution networks by opening more stores like in New Zealand, Thailand, Philippines and South Korea. However, not its entire foreign foray was successful especially in China. In China, they have losses and competition is heating up there. Also in Japan, they scaled down their operations.
Problem:
How Giordano will survive in the competition and grow in the new markets?
Analysis/Alternatives:
First, let me discuss the key competitive strengths of Giordano that made the company successful. These are:
(1) Computerization (from The Limited) - the computerization helped the company in their inventory control and production planning. Every time a purchase is made in the store, information is keyed in the cashier regarding model, color style and price and it is transmitted to the company’s main computer. The transaction is real time and the information helps the fine tuning of production operations.
(2) A tightly controlled menu (from McDonald's) - its product lines are controlled because of the power of their computerization technology, thus there is consistency in quality.
(3) Frugality (from Wal-Mart) – Operations are lean and mean because of computerized technology.
(4) Value pricing (from Marks & Spencer) – prices are inexpensive but it is a value for money merchandise
On top of the key competitive strengths of the company, they also espoused the principles of:
(1) Accepting Mistakes as Learning Opportunities
(2) Treating...