Logistics & Operations Management

Case Study: Giordano

Student Name:

Marks: 100

Attempt Ten Questions. All questions carry equal marks.

Q1: In your opinion what are the core competencies of Giordano? Only list them.
Ans: Following are the core competencies of Giordano:
1. Innovative
2. Low price comparatively but with superior quality; resulting in recognition as a brand
3. Sense of team building resulting in quick decision making and production
4. High globalization in apparel industry
5. Value pricing
6. Computerization to manage inventory and forecast demands
7. Tightly controlled menu
8. Frugality
9. High reputation in market and thus won various awards
10. Flexibility to cope with changes in the industry
11. Highly respondent to customers through proper feedback etc.
12. Dedicated and well trained sales force

Q2: What kind of organization structure is Giordano following? Why?

Ans: Giordano is managing a flat organizational structure and relaxed management system since this
infrastructure helps it out in order to cope with the daily industrial changes. Giordano have a
dedicated, well trained and friendly sales force that helps it a lot in inviting more and more customers.
Its employees are chosen on the basis of high merit and strict rules and regulations that results in
best work force it offers. From every store to the outlet, highly efficient employees are seen, some of
which are also the office workers who work at the stores as a trainer once a week. With offering
handsome salary, the turnover rate of staff is quite low. Its organizational structure comprises of a
setup that includes all higher management to lower staff, all centered on the same floor, side by side,

thus developing a friendly and easy to communicate environment. Its outcomes are quick decision
making capability and thus rapid production of goods.

Q3: What made Giordano expand its business globally? List the reasons.
Ans: Giordano opted for globalization for increasing its business due to the following reasons:

In order to enhance the production and economy, it has to expand its business outside the
territory of Hong Kong, thus widening the potential growth and entering in the world-wide
market.

Asian economic crisis (1997-1999) played a key role in globalization of Giordano. It is

explained as below:
Due to crisis of 1997-1999, many retailers started discount offers, which were becoming a
constant hurdle. For this, Giordano had to enter the world outside its boundaries.
The constant desire of branching out in outer regional territories is also a main reason for
its globalization.
It wanted to be less dependent on Asia and expand its brand all over the main countries
like China, Taiwan and Singapore.

Q4: List all the brands that come under Giordano Portfolio.
Ans: Giordano Portfolio includes following brands:
1. Giordano
2. Giordano Ladies
3. Giordano Junior
4. Bluestar Exchange

Q5: Which companies Giordano use as benchmark for their business? List them.
Ans: Giordano used following companies as benchmark for their industry:
1. The Limited
2. McDonalds
3. Wal-Mart
4. Marks & Spencer

Q6: List down the different performance evaluation measures which Giordano uses for
employees.
Ans: The employees at Giordano are evaluated in the following manner:
First before employment, they are given proper training and checked character-wise.
Once they are selected, each employee is evaluated once every two months based on:

Customers feedback cards

Nomination done by the shoppers

Mystery shoppers

In this way, each store is assessed twice a month either by customers or mystery buyers.
On the basis of nominations done, the employee is awarded with Service Star every month.

Q7: List down the operations of a typical Giordano store. How are they able to provide value
for money?
Ans: Giordano supply value-for-money merchandise through operating in the following ways:

They chose retailers in a way that cost is controlled and strictly fixed. It is accomplished by
getting proper stock from the central distribution center in contrast to getting goods from
expensive retailers and saving in storage.

The inventory and forecast demands are managed through a proper IT system. Through an IT
system:
When a product is sold, its major information like barcode, color, style, size and price
are noted down from the point-of-sale cash register and transferred to the companys
database. On its basis, orders are completed during night and made available on the
stores in the morning.
The information gathered through IT system is forwarded to production sector. It helps
in understanding the taste and demands of the customers, which is a vital input for the
manufacturers to provide best products.

In this way neither there is any stock in the ware house that is being waited to be sold, nor are
the most sold goods out of stock.

This inventory control results in proper saving which in turn is utilized for the customers.

Q8: How does Giordano keep things simple as compared to other retailers?
Ans: By keeping simple, Giordano means that they have no urge to expanding products and services
by ignoring several matters that have helped them a lot in gaining a competitive advantage. Their
simplicity can be elaborated as given here under:

They keep their stores simple and believe in providing high quality items maintaining their
brand.

They manage inventory control through a properly-organized IT system that regulates the
necessary flow of products and information between the organizations.

Their simplicity lies in getting the best outcomes from limited but reliable resources.

These above mentioned points help them in facing and coping with challenging market changes.

Q9: List down the competitors for Giordano. Why some firms chose to compete them in value
for money who would otherwise not do so in normal circumstances?
Ans: The low-priced apparel competitors of Giordano are:
1. Hang Ten
2. Bossini
3. U2
4. Baleno
5. Espirit
6. Theme
There are two main aspects due to which the above mentioned companies compete on the basis of
money:
A. Due to the crisis of 1997-1999, the retailing sector squeezed and thus more companies
entered the low-pricing strategy.
B. The competing areas of above and those of Giordano were almost the same which helped
them in trying to develop a competitive edge over Giordano. For example, Hang Ten and
Baleno are strong in Taiwan, Theme and Bossini in Hong Kong, Baleno also in china and
Bossini in Singapore. They all tried to excel in providing better quality and service to young
adults, teenagers, from common men and women to fashionable business wear. In this way,
Espirit is a direct competitor of brand Giordano Ladies.

Q10: Which current market is mainly the focus of Giordano and why?
Ans: China is a hometown of world largest production and economy. Giordano considered entering
the new Asian market to boost up its brand and production. For this, China proved to be a great
outcome. Up till now, it is extensively flourished in the main land of China. Hong Kong is the mainland
of Giordano since it is producing 80% of its clothes. This is helping it out in surpassing the average
gross margin of the industry. According to an analysis, the growth rate of casual wear in China retail
market would double between 2004 and 2010. This has proved in the form of great level of growth of
Giordano in China. Recently, it has opened stores in 2 nd and even 3rd tier cities, in major cities like
Shanghai, Beijing and also in Indonesia.

Q11: Which factors of success Giordano should understand in order to sustain the market
growth?
Ans: In order to sustain and cope with the market growth, following factors are needed to be
followed:

Since they had entered the new market, they need to conduct a full analysis of the area and
upgrade their marketing and operational strategy accordingly.

A thoroughly conducted market research is required in order to understand the consumers

taste, preferences for fabric and colors.

They need to arrange a proper advertisement of their product via web and media etc.

The location of retail stores must be decided by considering the feasibility of customers to
reach there.

The price should be maintained low in order to maintain this core competency.

Q12: Marketing strategy of Giordano has been shifting from its Core operational strategy. Give
examples and reasons?
Ans: The core operational strategy of Giordano was based on low cost, better service and
uniqueness of its brand in its own region. By upgrading the market strategy .i.e. moving in the outer
Asian countries, it has faced various challenges in maintaining those previously unchanged
operations, such as:

Its first most core competency was low cost, but by moving into the global world, various other
competitors like Theme, Espirit, Hang Ten etc. are following the same strategy.

It used to offer a best service, but in new Asian countries, it has to upgrade and revolutionize
its services by considering the demands and priorities of the people of those regions.

Its main target was the customers, but by entering in a whole new country, it has to conduct a
detailed survey of the customers demands and preferences regarding clothing.

It can be well seen from above that entering a whole new market demands radical changes in the
prior strategies which need to be updated and transformed to whole new set of operational strategies
in order to cope in the new industry.