Giordano: Positioning for International Expansion
CASE 4 Giordano: Positioning for International Expansion
Company Background
Giordano was founded in Hong Kong by Jimmy Lai in 1980. In 1981, it opened its first retail store in Hong Kong and began to expand its market by distributing Giordano merchandise in Taiwan through a joint venture. In 1985, it opened its first retail outlet in Singapore. Responding to slow sales, in 1987 Giordano changed its positioning strategy. Until 1987, it had sold exclusively men’s casual apparel. When Lai and his colleagues realized that an increasing number of female customers were attracted to their stores, he repositioned the chain as a retailer of value-for-money merchandise, selling discounted casual unisex apparel, with the goal of maximizing unit sales instead of margins. This shift in strategy was successful, leading to a substantial increase in turnover. In 1994, Peter Lau Kwok Kuen succeeded Lai and became chairman of the company.
Management Values and Human Resource Policies
A willingness to try new and unconventional ways of doing business and to learn from past errors was part of Lai’s management philosophy and soon became an integral part of Giordano’s culture. He also believed strongly that empowerment would minimize mistakes—that if everyone was allowed to contribute and participate, mistakes could be minimized.
Another factor that contributed to the firm’s success was its dedicated, ever-smiling sales staff of over 11,000. Giordano considered frontline workers its customer-service heroes. Charles Fung, executive director and general manager (Taiwan), remarked. Giordano had stringent selection procedures to make sure the candidates selected matched the desired employee profile. Selection continued into its training workshops, which tested the service orientation and character of a new employee.
Giordano motivated its people through a base salary that probably was below market average, but added attractive performance related bonuses. These initiatives and
Company Background
Giordano was founded in Hong Kong by Jimmy Lai in 1980. In 1981, it opened its first retail store in Hong Kong and began to expand its market by distributing Giordano merchandise in Taiwan through a joint venture. In 1985, it opened its first retail outlet in Singapore. Responding to slow sales, in 1987 Giordano changed its positioning strategy. Until 1987, it had sold exclusively men’s casual apparel. When Lai and his colleagues realized that an increasing number of female customers were attracted to their stores, he repositioned the chain as a retailer of value-for-money merchandise, selling discounted casual unisex apparel, with the goal of maximizing unit sales instead of margins. This shift in strategy was successful, leading to a substantial increase in turnover. In 1994, Peter Lau Kwok Kuen succeeded Lai and became chairman of the company.
Management Values and Human Resource Policies
A willingness to try new and unconventional ways of doing business and to learn from past errors was part of Lai’s management philosophy and soon became an integral part of Giordano’s culture. He also believed strongly that empowerment would minimize mistakes—that if everyone was allowed to contribute and participate, mistakes could be minimized.
Another factor that contributed to the firm’s success was its dedicated, ever-smiling sales staff of over 11,000. Giordano considered frontline workers its customer-service heroes. Charles Fung, executive director and general manager (Taiwan), remarked. Giordano had stringent selection procedures to make sure the candidates selected matched the desired employee profile. Selection continued into its training workshops, which tested the service orientation and character of a new employee.
Giordano motivated its people through a base salary that probably was below market average, but added attractive performance related bonuses. These initiatives and