vOverview and Introduction

v
v
v
v
v
v
 Background
• Was founded by Jimmy Lai in the year 1980.
• “GIORDANO” – Italian name. Named after
a famous New York restaurant.
• Started selling casual clothes under Comitex
group.
• Set up its own retail shop in Hongkong in
1983
• Began expansion in Taiwan through a joint-
venture.
 Background
• Opened its first retail outlet in
Singapore.
• In 1987, Giordano changed its
strategy.
• Around 1990, Lai had around 200
Giorgano stores in Mainland China
& Hongkong.
• In 1994,Lai was under pressure from
the Chinese Govt.
• Lai left the company and Peter Lau
Kwok Kuen takes over as
Management values and style
• Lai always tried to do things in an
innovative way
• Success factor was there sales staff
• Only those candidates were selected who
matches the employee profile
• All the employees had to work in a store
for one week
• Attractive salary, respect , good incentive
helped to retain good employees
Strategies of
Giordano
 Product Strategy

Ø Retailer of unisex apparel

Ø
Ø Customer service as a part of a
product
Ø
Ø Tags were removed from some
of the products
Ø Customers were asked to set a
price for jeans
Business Strategy
Corporate Strategy
 Product positioning

• “Value-for-money” or “quality merchandise at

affordable prices”
• “Gio Ladies” was the product introduced
• Mid price positioning
• Bluestar exchange(BSE)-budget cautious
customer
• During 1990, it tried to reposition its brand.

•
 Giordano’s key success factors
•

• Using Porter’s five forces framework, the key

success factors can be explained
•

•
 RISK OF ENTRY BY
POTENTIAL
COMPETITORS
= MODERATE �
Investments in brand
building, and retail outlets
needed

RIVALRY AMONG BARGAINING POWER

BARGAINING POWER ESTABLISHED FIRMS
OF SUPPLIERS = HIGH � Price and
= LOW � Suppliers can non-price competition
be replaced easily increasing in intensity,
slower demand growth
OF BUYERS
= MODERATE � Low
switching costs but no
collective bargaining
power

THREAT OF
SUBSTITUTE
PRODUCTS
= LOW� Lack of
substitutes for casual
clothes
 Competitive Advantages

Excellence in design:
Ø Fast and market-driven new product development,
Ø Excellent organizational communication
Ø Dedication to the needs of customers (e.g., style,
fabrics, etc.)
Excellence in management of operations, logistics and
information technology systems:
Ø Effective supply chain management,
Ø Inventory control ,distribution
Ø Integration of purchasing and selling functions.
Ø Cost savings from efficient operations are transferred
to customers, thus delivering “value-for-money”.
•Excellence in marketing and branding:
Ø Strong positioning,
Ø Brand equity for excellent service and ability to deliver
“value-for-money”,
Ø Consistent execution of advertising and promotion to
strengthen brand image.
•Excellence in service:

Ø Excellent customer service

Ø Human resource policies (e.g., selection, training and
remuneration of frontline staff)
Ø Information systems, and performance monitoring (e.g.,
regular evaluations of service standards at store level and
mystery shopping)
•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
•
 Competition

• Main Competitors
•
• Similar strategies but different markets
•
• The Theme’s direct Competition
•
• Heavy Ads, sales Promos, attractive prices
•
• No question asked exchange policy
•
• The Gap – Giordano Unisex
 Competitor's Positioning
FIRMS POSITIONING TARGET MARKET
Giordano Value for money – Unisex casual wear
The Gap Trendy fashion
Value for money – for all ages
Unisex casual wear
Espirit More
TrendyUp market than
fashion Specialized
for all ages lines for
Bossini Giordano
Low Price children and menBoth
Unisex apparel-
Baleno Value for money – young and
Unisex old young
appeal,
Hang Ten Youngfor
Value Age casual
Money, adults Wear and
Casual
wear
Sporty Lifestyle sports wear, Teen and
young adults
Giordano’s growth strategy
 International expansion
Ø Established store in China, Malaysia, Singapore,
Taiwan , Japan , Korea, Saudi Arabia, India, etc.
Ø Different Strategies in different market.
Ø Slowdown due to Asian crises, SARS and Iraq war.
Ø Expansion beyond Asia.
• Australia, North America , Europe , Middle East.
Ø Network of over 2000 stores in 30 countries
Future View

opportunities

Challanges
 AWARDS
Awards Year
The fourth Hong Kong Awards for services 2000
Grand Award ( Giordano International) 2002
Grand Award ( Giordano ladies) 2002
Business to Consumer Services 2002
Suppliers Award.
Dubai Services Excellence Scheme Award. 2003
Hong Kong Super Brands Award. 2004
Top Service Award( 9th time). 2004
Most Innovative Company by Wall Street Journal 2007
Asia.
Dubai Services (excellence performance award)-3rd 2008
time consecutively.
Hong Kong Corporate Governance Excellence 2008
Award.
Best Services Performance ,Brand for Excellence in 2009
customer Care.
 ANALYSIS OF FINANCIAL DATA
PARTICULARS 2008 2007 2006 2005 2004
Turnover 5048 4950 4372 4413 4003
( HK$ Millions)
COST
Operating Profit 325 384 376 518 491
(HK$ Millions)
Operating Profit 6.4% 7.8% 8.6% 11.7% 12.3%
Margin
Profit Available To 311 295 205 406 387
Shareholders
( HK$ Millions)
Return On Sales 6.2% 6.0% 4.7% 9.2% 9.7%
Earning Per 20.80 19.80 13.80 27.50 26.70
Share(HK$)
Inventory Turnover 23 33 35 31 30
Ratio
Current Ratio 2.3 1.9 2.1 2.6 2.4
 Data related to stores
PARTICULARS 2008 2007 2006 2005 2004
Directly Managed
Number Of Stores 1036 1000 962 914 811
DATA RELATED TO STORES
Retail Floor Area(In 1046 995 957 918 846
000’s of sq ft)
Comparable Store (2%) 2% (3%) (1%) 7%
Sales
Total Stores 1970 1895 1767 1694 1585
Any Questions …
THANK YOU