Describe and evaluate Giordano’s product, business and corporate strategies?

Product Strategy: Giordano sees itself as being more than just a retailer of casual apparel. It
was able to successfully incorporate customer service as part of its product. Besides its brand
name, logo, style and quality, excellent service has become part of the tangible products sold at
Giordano stores. Customers have come to associate service excellence as an integral component
of Giordano's merchandise. Giordano is able to provide a high level of customer service through
a concerted effort, which involved every employee of the company. However, it is also essential
to recognize the importance of the management and leadership's commitment to be customer-
oriented and to provide high quality service.
Besides incorporating service as part of its product, Giordano focuses on the concept of value-
for-money. Giordano is constantly aiming to improve the value of the product. Being customer-
oriented allows Giordano to focus on what the company's products mean to the consumer.
Customers are often encouraged to request certain product adaptations if current products fail to
meet their expectations. For instance, Giordano removed its logo from some shirts. Another
example is Giordano's invitation to customers to set the price of its jeans.
Giordano's other product strategy is to sell a small number of core products in its stores. While
other retailers have 200-300 items, Giordano features no more than 100 variants of 17 core
items. Flexibility and speed is essential in the retailing industry, especially when the fashion
trend is evolving constantly. Maintaining a restricted range of core products has allowed
Giordano to respond to market changes faster than its competitors, and to keep costs down.

Business Strategy: There are three generic strategies advanced as business strategies (Porter):
cost leadership, differentiation and focus, and combinations of these three pure strategies.
Giordano seems to pursue a combination, i.e. a focused differentiation strategy. The primary
source of differentiation comes from Giordano's commitment to quality, in terms of the products
it sells and the service it provides to customers. This can be illustrated by its dedication to
training and motivating its front-line staff as well as its no-questions asked return policy.
Giordano's strategy is focused on customer responsiveness understanding what its customers
want and putting their interests first, as well as on a specific niche - value-conscious consumers
who want affordable yet trendy casual apparel with reasonable quality.
Giordano is changing its focus to expand the market niche that it has been serving to include a
more up-market segment. However, this is done carefully to prevent a loss of existing customers
who may become confused by the value proposition that Giordano provides to them. For
instance, its launch of the Blue Star Exchange (BSE) line clearly indicates its commitment to the
existing value-for-money segment, but at the same time it is upgrading its core brand's position
so that customers may eventually perceive that Giordano stands for more than just 'low priced'
apparel. With the successful launch of the new product line and re-launching of Giordano Ladies
and Junior, Giordano appears to have overcome the main problem that niche strategies face i.e.
the inability to move to new niches.

Corporate Strategy: Giordano initially adopted a tapered vertical integration (backward)

strategy, as it had manufacturing plants in the Philippines and Mainland China, while also
sourcing from external suppliers. This was deemed necessary to allow better cost and quality
control, and the strategy worked until the currency crisis hit Asia. Competition amongst suppliers
(manufacturers) of good quality apparel became so intense that prices came down dramatically,
and it became an opportunity cost to rely on Giordano's own manufacturing division for supplies.
There could be other reasons, such as rising operating costs, putting pressure on the firm to look
for alternative sources of supply. In fact, in 1999, the Philippines plant was closed down, and
Giordano is now concentrating on their core business in retailing/ distribution. This can also be
evident in their allocation of investments to expand its retail outlets. This strategy is risky but
consistent with Giordano's core competency i.e. in customer responsiveness as opposed to
operational efficiency.

Q2: Describe and evaluate Giordano’s current positioning strategy. Should Giordano
reposition itself against its competitors in its current and new markets and should it have
different positing strategies for different geographic markets?

Giordano’s current positioning strategy is based on providing “value-for-money merchandise of

discounted casual unisex apparel”.

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.

Q3

 The competitive advantages those worked as key success factors for Giordano to achieve a
distinct position in the competitive markets are:

Computerization – The POS terminals that are used to record and transmit flows of stocks to a
mainframe computer which then aids in controlling stock flow of inventory.

A tightly controlled menu – It mainly focus on a few items whose demand and desirability can
be closely monitored.                   

Frugality – curbed spending on advertising and tight inventory control

Sources of competitive advantage for Giordano’s are: 

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