Comprehensive Business Strategy Report: Giordano International

This report provides a comprehensive analysis of Giordano International's business strategy. It begins with an examination of strategic planning processes, including the roles of mission, vision, objectives, goals, and core competencies. The report then delves into the formulation of a new strategy for Giordano, conducting organizational and environmental audits using tools such as SWOT, PESTLE, and Porter's Five Forces analyses. A stakeholder analysis is also included to understand the significance of various stakeholders. The report then proceeds to the evaluation of alternative strategies, considering options for growth and retrenchment, before justifying an appropriate future strategy for Giordano. Finally, it covers the implementation of the chosen strategy, detailing the required roles, resources, targets, and timescales for effective execution and monitoring. The report provides a deep understanding of the company's strategic positioning and offers actionable recommendations.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1: THE PROCESS OF STRATEGIC PLANNING.............................................................1
1.1 Assessment of how business missions, visions, objectives, goals and core competencies in
form strategic planning................................................................................................................1
1.2 Analysis of the factors that have to be considered when formulating strategic plans...........2
1.3 Evaluation of the effectiveness of techniques used when developing strategic business
plans.............................................................................................................................................3
TASK 2: FORMULATION OF A NEW STRATEGY...................................................................4
2.1 Analysis of the strategic positioning of a given organisation by carrying out an
organisational audit......................................................................................................................4
2.2 Environmental audit of Giordano..........................................................................................5
2.3 Significance of stakeholder analysis when formulating new strategy...................................7
2.4 Presentation of new strategy..................................................................................................9
TASK 3 APPROACHES TO STRATEGY EVALUATION..........................................................9
3.1 Analysis of possible alternative strategies relating to substantive growth, limited growth or
retrenchment................................................................................................................................9
3.2 Justification of an appropriate future strategy for Giordano................................................11
TASK 4 IMPLEMENTATION OF STRATEGY.........................................................................12
4.1 Explain the different roles and responsibilities needed for strategy implementation .........12
4.2 Evaluating resource required to implement a new strategy.................................................15
4.3 Discussing targets and timescales for achievement in organisation to monitor a given
strategy.......................................................................................................................................16
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20

INTRODUCTION
Company need to frame varied set of strategy for the purpose of fulfilling the objective
sand also to attain its specific aim. It initiates with strategic planning and developing strategies
for the same. This aids in reducing the impact of any unforeseen event and also helps in getting
rid of risk and uncertainty. With a motive to gain deep knowledge regarding business strategy,
present report has been prepared. For this purpose, Giordano International has been taken into
account which is a Hong Kong based clothing retailer. In this, discussion is incorporated for
strategic planning, formulation of new strategy, evaluation and implementation of strategy.
TASK 1: THE PROCESS OF STRATEGIC PLANNING
1.1 Assessment of how business missions, visions, objectives, goals and core competencies in
form strategic planning
Mission and vision
Giordano Internationala is a Hong Kong based clothing retailer that was founded in 1981
(Corp.giordano.com.hk 2015).The brand embodies contemporary lifestyle choice by providing
superior apparels for men, women and children. The vision of the brand is to be the best and
biggest brand in the world (Bryson, 2011). The company maintains a cosmopolitan touch by
thinking global. The mission of the brand is to make people feel good and look great. Giordano
has over 2400 store operations in the Middle East region and beyond (Corp.giordano.com.hk
2015). The brand believes in providing corporate values with trendy fashion regardless of
nationality, ethnicity or culture and illustrates the message of a world without strangers
(Corp.giordano.com.hk 2015).
Goals and objectives
The core objective of the brand is to provide maximum customer satisfaction. The brand
aims at providing excellent customer service by keeping in contact with customers and soliciting
feedback on an on-going basis. Giordano focuses on exceeding the expectations of customers in
terms of merchandise and service (Steiner, 2010). The brand aims to be a pioneer in customer
service by focusing on five corporate values QKISS- Quality, Knowledge, Innovation, Service,
and Simplicity (Giordano-me.com 2015).
Core competencies
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Giordano believes in modern simplicity and style. The brand maintains a competitive
edge by providing world class customer service; timeless quality product; strategic locations for
easy accessibility of customers and providing additional services such as alteration and global
exchange policy (Spee and Jarzabkowski, 2011). It is the primary objective of any company to
address the customer needs. The brand provides consistent exceptional shopping experience to
its customers. The additional services such as customer service toll free hotline, complimentary
alterations and global exchange policy programs are core competencies of the business
(Corp.giordano.com.hk 2015).
Refer to Appendix
1.2 Analysis of the factors that have to be considered when formulating strategic plans
Giordano is a successful company but it has confronted some important strategic
planning process issues. The current positioning of the brand is customer satisfaction. The main
objective of the brand is to provide maximum customer satisfaction. The current positioning of
the brand is to provide trendy clothes at inexpensive prices (Allison and Kaye, 2011). The brand
sells at discounted casual unisex appeal. The issue with brand positioning is that the strategy
works in Asia but in other economies, people might appreciate a more affluent brand. Esprit is a
tough competitor, as a part from being value for money, the brand also specializes in chains for
men and women. Giordano must reposition itself to suit as a global image for achieving its
mission (Wirtz 2011, pp 1-13).
Refer to Appendix
1.3 Evaluation of the effectiveness of techniques used when developing strategic business plans
With the blue ocean strategic tool, Giordano starts with the identification of the major
factors that define competitive differentiation with the given industry today. This includes price,
quality, breadth of product, availability of product etc. (Kim and Mauborgne 2005).
PESTLE Analysis: The PESTEL Analysis is also one of the most popular techniques through
which the strategy is formulated. The PSTEL technique enables the strategist to analyze the most
important Macro factors which can affect the business and which have the direct impact on the
strategy. The PESTEL factors are Political, Economic, Sociological, Technological, Legal and
Environmental which are defined as follows: Political Factors: The political factors are very important to be considered while
developing the strategy. The political factors may be defined as those factors which
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determine the attitude of the government towards the industry and thus the business in
particular (Allison and Kaye, 2011). These factors are the factors like the policies related
to the trade, or tariffs etc. Economic Factors: The economic factors like the inflation or deflation also need to be
considered. The economic factors have a direct impact on the industry as these factors
determine the state of the economy of the country the business is operating in. The
economic factors also affect the demand of the consumers. Sociological Factors: The societal factors of the customers are also very important. The
social factors like the demographics, the trends and analysis of the population are also
very important as these are directly related to the purchase pattern of the consumers.
 Technological Factors: This is a well-known fact that this is the technological era and
without the latest technology adoption the survival of the company in the international
market is not possible (Poister, 2010). Thus the latest technology must be adopted by the
company. Legal Factors: The Company like Giordano and Adidas must also take into consideration
the legal factors like the laws and regulations that have to be followed by the companies.
 Environmental Factors: The business does not act alone and it is surrounded with the
environment. These factors affect directly the strategy of the company. Thus the
environmental factors are also very important for Giordano and Adidas (PESTLE
Analysis, 2016).
TASK 2: FORMULATION OF A NEW STRATEGY
2.1 Analysis of the strategic positioning of a given organisation by carrying out an organisational
audit
SWOT Analysis
 The strength of the brand is that its product caters to all age groups of both men and
women. The professional service provided makes the customers feel comfortable and
important. The brand sells value-for-money through careful selection of suppliers. The
stores are located at strategic locations for convenience of consumers (Woo and Jin 2014,
pp 5).
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 The weakness of the brand lies in the fact that their product range is limited. The adapted
IT strategies are not feasible for all organizations. The brand also fails to differentiate
core brands from the mainstream (Mittal and Arora, 2014).
 The opportunity of the brand lies in the fact that there is scope for expansion in continents
other than Asia. Their brand image can be strengthened through greater advertising and
customer service. The brand image can be maintained and even improved through these
efforts (Woo and Jin 2014). The brand has threats of intense competition like GAP, Esprit etc. The competitors have
better strategic locations and technology in the design process (Mittal and Arora 2014).
Refer to Appendix
2.2 Environmental audit of Giordano
PESTLE analysis Political Forces- Hong Kong has a democratic government that makes the political
situation of the country positive. The government does not provide any subsidy to apparel
industries. Due to free trade, Hong Kong is the sixth largest exporter of apparel and
textiles that makes the market attractive (Wirtz 2011). Economic Forces- Hong Kong was ruled by the UK government, prior to its takeover by
China. People spend large amounts on apparel in Hong Kong than in UK. Hong Kong has
a fashion conscious culture with highest clothing expenditures (Wirtz 2011). Social Forces- Giordano provides both business and casual clothing for men and women
of all ages in addition to kids wear. A combination of both US and Chinese cultures are
followed in Hong Kong (Gopinathan, Nouraldeen and Wilson, 2010). Technological Forces- With rapid transition in technology, Giordano has adapted the IT
structure of Walmart. The speed of technological transfer makes the company feasible for
customers. Legal Forces- The import and export regulations of Hong Kong state that operations of
apparel industry are free to trade. There are reduced barriers to US export (Trade.gov
2015).
 Environmental Forces- Giordano supports a number of CSR events such as “Project
Hope” and “World Without Strangers” for handling crisis in the environment (Wirtz
2011).
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Porter’s Five Forces analysis
Bargaining power of suppliers(Moderate)
It is appropriate to build a win-win relationship with suppliers for protecting interests at
both ends. There is supplier concentration and diversity in designs offered by suppliers. The
suppliers have bargaining power but the degree of their bargaining power is moderate as there
are lots of suppliers who are willing to supply for a brand like Giordano.
Bargaining Power of customers (High)
There are a lot of competitive brands available in the market such as Gap and Esprit that
make increase the bargaining power of customers (Mun 2011). The bargaining power of the
customers is also very high and the reason behind this is that in this competitive era the customer
is the king of the market and without valuing the customer it is not possible for the business to
survive. The customers have various options and their bargaining power is also high.
Threat of new entrants (Low- Moderate)
With the advancement of technology, there is a dilemma within the apparel industry
regarding sustainability of long-term advantage over competitors(Zhu and He 2013). The threat
of the new entrants remain moderate to low as giving the competition to a brand like Giordano
for the new entrants in not an easy game (Bamberger, Biron and Meshoulam, 2014).
Threat of substitutes (High)
Apparels are available in value for money that restricts the capability of improving
margins and raising prices for Giordano (Zhu and He 2013). With the ever changing apparel
industry the threat of the substitute products is quite as the customer switches easily with one
brand to another.
Rivalry among Competitors (High)
There are a number of intense rivalries such as H&M and Sara in the global market while
Bossini has a strong local market share (Zhu and He 2013). The rivalry among the customers is
also very high. All the competitors are mapping the activities of one another and the competition
us cut throat.
Strategic positioning
The strategic positioning of Giordano is planned at providing best quality products at
competitive prices while entering into the international market (Mashhour and Moghaddas-
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Tafreshi, 2011). The brand also needs to grow its sales internationally through aggressive
advertising so as to match competition in the market (Chaudhry and Hodge 2012).
2.3 Significance of stakeholder analysis when formulating new strategy
The roles of the shareholders will be provided the source of finance for the Giordano if
they expect to increase their value with the growth of Business (Andrews and Russell, 2012).
The roles of management manage efficient and lower cost of operations. Employees would be to
provide efficient operation for organization and help Giordano to attain competitive advantage
with their well training (Pilcer and Amighi, 2010). The roles of suppliers have an important role
to supply raw materials at good quality and low price which will be produced a quality products
and cost benefit to organization and consumers.
The customers cannot be satisfied without a win-win situation with suppliers and
employees. The government lays important regulations for smooth operation of the business. The
brand also has a social responsibility towards the community through environmental measures
(Bryson, 2011).
Refer to Appendix
2.4 Presentation of new strategy
With the results achieved through PESTLE and Porter’s analysis, Giordano can consider
becoming a luxurious brand and provide premium products rather than competitive prices.
The new strategy for the company Giordano would be to repositioning itself and become the new
and improved brand. The company can position itself as a brand which is the luxurious brand
and it can also offer the prices which are premium in nature (Mashhour and Moghaddas-
Tafreshi, 2011). There is great advantage of adopting such a strategy as such companies are
considered to be of best quality company and this is why the consumer is willing to pay more for
the products of such companies.
Till now the company is famous for its low/moderate price apparels and this strategy
seemed quite successful for the company also. However there is a whole large segment which
consists of the prime consumer, i.e. consumers who are willing to pay more for the best quality
products and the products which they find value for money (Pilcer and Amighi, 2010). Thus the
new strategy for Giordano could be to enter into this segment of the market and try to increase
the share of the market through aggressive marketing (Ingram, 2016).
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TASK 3 APPROACHES TO STRATEGY EVALUATION
3.1 Analysis of possible alternative strategies relating to substantive growth, limited growth or
retrenchment
Ansoff Strategies Market Penetration - The strategy can be used to increase sales in the existing markets of
Giordano. The brand must extend its strengths in the market for improving sales to
existing or new customers through increased advertising, price competition and intensive
distribution. Product Development - The strategy to increase sales in current or developing products
can be done through variants such as accessories, range extensions and innovations for
current models (Stonehouse and Houston, 2013). Market Development - The strategy to increase sales in new markets can be done by
competitive pricing and entering luxurious market segment (Stonehouse and Houston,
2013).
 Diversification - Giordano can consider diversifying business to bed accessories by
integrating concepts from Esprit. Market research must be done before putting anything
into action (Stonehouse and Houston, 2013).
Market entry strategies
Franchising is a foreign market entry mode for managing stores at various locations. The
franchisees for Giordano must be set up in international markets for selling products and making
Giordano available at convenient locations. The store must carry luxurious furnishing and high
end services meant to target the luxurious market segment. Affluent customers can purchase
through such chain stores (Rochet and Rice, 2009).
Substantive growth, Limited growth, and retrenchment strategies
For substantive growth of the brand, Giordano may consider franchising, horizontal or
vertical integration. Through horizontal integration, the brand can capture greater market share
by merging with local famous brands. Just-in-Time inventory can be ensured through vertical
integration (Ackermann and Audretsch, 2013).
Refer to Appendix
Blue Ocean Strategy
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Blue ocean strategic tool can be used for determining competitive landscape. The
products can be designed for minimizing competition through new start-ups and developments in
the existing organization (Teece, 2010). Demand is rather created than fought over. Blue Ocean
provides ample opportunities that can be profitable for Giordano. Blue ocean strategy is an
opportunity-maximising risk-minimising strategy. There are two ways to create blue oceans in
the business. Firstly, Giordano can consider launching new industries. Either way, and the most
commonly followed method, Giordano can expand the boundary from the existing industry. The
strategy mainly focuses on creating value for the customers.
3.2 Justification of an appropriate future strategy for Giordano
The process of strategy selection
The selection of strategy is based on direction through which strategy which will move
and methods for purusation of the same. It can also be done on the basis of willineness or level of
corporation to seek for competitive edge (Johnson, Scholes and Whitthington, 2008).
Blue Ocean strategic tool can be used for meeting mission of Giordano as it not only
creates an uncontested market space but also appears to be a combination of cost leadership and
differentiation. These factors help in defining a niche market using approaches of information
gathering through internal and external environment analyses. As seen in the case of Japanese
company Canon, it creates a niche market by shifting the target customer of the copier industry
from corporate purchasers to users (Blue Ocean Strategy, 2016). The Blue Ocean tool helps the
organisation in going outside the comfort zone and exploring new territories in the market. Blue
Ocean tool also helps n developing a strategic canvas and allows the management to see the
results by benchmarking. Blue Ocean strategy helps in moving the organisation towards its
competitors by lessening the gap and increasing chances of achieving goals (Klaer, Wayte and
Fay, 2012 ). As seen in the case of Polo, Ralph Lauren updated price and look for capturing
greater market share . Thus, new markets can be made by not competing but making the
competition irrelevant (Omar and Sawy, 2013).
Refer to Appendix
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TASK 4
4.1 Explain the different roles and responsibilities needed for strategy implementation
It is significant for Giordano to place better and effective strategy which is able to lead
the business to great success and overall achievements (Wirtz, 2011). In that respect, the cited
organisation should follow the stated processes which are helpful in creating a perfect strategy:
Strategy implementation process
 In the prior step, Giordano has to determine the vision of the blue ocean strategy. For
instance, they are likely to increase their overall stores from 2,400 to 2600 in the
international sector. Further, the Giordano needs to evaluate the information gained from
the market research. In addition to this, they are able to identify the number and level of
resources available in the market (Bhardwaj, Eickman and Runyan, 2011). For
introducing new stores they require proper information about the available resources in
the concerned sector.
 Blue oceans strategy is very powerful as it is a tool for building brand. A blue ocean
strategic move also creates brand equity that has an impact over people for decades.
Giordano can make proactive changes in the industry for purposeful application of the
tool. The strategy is an integrated approach for aligning three propositions- profit, value
and people. Speed, quality and consistency of providing products to consumers can be
attained at a low cost with efficient planning and engagement (Ackermann and
Audretsch, 2013).
Refer to Appendix
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Roles and responsibilities for implementing the strategy
There are several kind of responsibilities fulfilled by business in order to implement the
corporate strategy. According to the given scenario, for implementing blue ocean strategy
responsibilities of all level of management- Operational- Lower level management consists of line workers who are engaged with
varied organizational activities which prove to be effective to determine long run growth
and success of business. Here, Giordano International workforce directly involved in the
product process of clothes are allocated responsibilities to speed up the flow of
production. They are responsible to meet specific demand of buyers. It is because blue
ocean statey is about reconstruction of industry boundary. However, they will be
provided training to perform better. At this level all operation or dialy basis work is
completed by operational manager in accordance with direction given by tactical level.
Hoever, they just supervise the work allotted to employees. Furthermore, certaintainty
remains higher because this is the actual phase of strategic implementation. Tactical-Middle level management include all departmental managers such as
production, marketing, research & development as well as finance. At this juncture,
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Illustration 1: Strategy implementation process
(Source: Campbell, Edgar and Stonehouse, 2011)