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Business Strategy of Giordano International

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Introduction

A company need to frame varied sets of strategies for the purpose of fulfilling the objective and also to attain its specific aim. It initiates 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, the 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 form strategic planning

Mission and Vision

Giordano International is a Hong Kong-based clothing retailer that was founded in 1981 (Corp.giordano.com.hk 2015). The brand embodies contemporary lifestyle choices by providing superior apparel for men, women and children. The vision of the brand is to be the best and biggest brand in the world. The company maintains a cosmopolitan touch by thinking globally. 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 ongoing basis. Giordano focuses on exceeding the expectations of customers in terms of merchandise and service. 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

Giordano believes in modern simplicity and style. The brand maintains a competitive edge by providing world-class customer service; timeless quality products; strategic locations for easy accessibility of customers and providing additional services such as alteration and global exchange policy. It is the primary objective of any company to address the customer needs. The brand provides consistent exceptional shopping experiences 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).

The company's vision, mission, objectives and core competencies inform the strategic planning of the business in a clear-cut manner. The vision of the company states clearly where the company wants to be in future or after a certain period of time. The mission of the company states the reason for the existence of the company. The objectives define what the company wants to do and the core competency is the strength of the company or the area where the company is best at. All the components together form the strategic planning for the company as they state what the company needs to do in order to achieve its long-term goals.

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1.2 Analysis of the factors that have to be considered when formulating strategic plans

There are various factors that have to be considered while forming a strategic plan such as internal factors, stakeholders and macro-factors. The internal factors involve the code of ethics, organizational culture and policies of the company. The external factors involve political, economic, socio-cultural and technological factors affecting the strategic plan. The stakeholders involve employees, managers, customers, suppliers, creditors, the community and the government. At this juncture, the economic justification of stakeholders of the approach can be considered in order to shed light on the requirements of different parties who are directly or indirectly associated with the company (Freeman and et. al., 2010).

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 (Zhang 2014, p 698). 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 apart from being value for money, the brand also specializes in chains for men and women. Giordano must reposition itself to suit a global image to achieve its mission (Wirtz 2011, pp 1-13).

Giordano follows a vision-based planning approach. The brand focuses on a clear and concrete vision and makes judgments only on the priorities as the quickest and least expensive way. It is also important to follow an issue-oriented planning approach which is a hybrid of data-based and vision-based planning approaches. The current situation and future projections can be accomplished in this vision. The vision-based approach only focuses on challenges and opportunities while in the issue-oriented approach, the brand can strike a good logic between data and vision (Wittmann and Reuter 2012, p 12).

Structure of the Organization: The structure of the organization largely affects the strategy of the business. The companies must make the strategy according to the structure of the organization. The strategy of the organization has to be in accordance with the internal structure and the policies of the company.

Culture of the Organization: The culture of the organization is also a very important factor that affects the strategy of the company. The culture decides how the people will be able to implement the strategy. The culture of the organization is the collective thinking of the people and how would they contribute to the strategy. (Kiptoo and Mwirigi, 2014).

1.3 Evaluation of the effectiveness of techniques used when developing strategic business plans

A SWOT analysis can be used for analysing strengths, weaknesses, opportunities and threats for strategically planning a framework. A mapping course with a clear view can be obtained and can help Giordano in achieving its objectives. Through SWOT analysis, the present situation of Giordano can be assessed effectively and accurately; it demonstrates the impact of internal and external factors on the business. Especially SWOT helps Giordano in evaluating the advantages and disadvantages of internal factors. In addition, it also states chances and risks from external factors (Kvedaraviciene 2013, p 3)

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 a 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 determine the attitude of the government towards the industry and thus the business in particular. These factors are factors like policies related to trade, tariffs etc.
  • Economic Factors: Economic factors like 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. 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. Thus the latest technology must be adopted by the company.
  • Legal Factors: The Company like Giordano and Adidas must also take into consideration 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 by 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

Need for Organizational Audit

Giordano needs an organizational audit for designing a consulting activity in order to add value and improve the operations of the company.

Value Chain Analysis

Value chain analysis plays an important role as it is an era of rapid globalization for increasing competitiveness. The brand has excellence in design and outstanding customer service as the main activities of the value chain. The brand has adapted its IT structure from Walmart's, which integrates its logistics and marketing functions (Woo and Jin 2014, p 5).

SWOT Analysis

  • The strength of the brand is that its product caters to all age groups both men and women. The professional service provided makes the customers feel comfortable and important. The brand sells value for money through a careful selection of suppliers. The stores are located at strategic locations for the convenience of consumers (Woo and Jin 2014, p 5).
  • The weakness of the brand lies in the fact that its 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 for 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).

Benchmarking and Scenario Planning

The benchmark set for scenario planning is to grow in other markets for affluent consumers. In Asia, the brand focuses on value for money. It aims to target customer segments which have disposable income and can pay more. People believe that high-priced products are luxurious. So prices have to be raised in order to target the luxurious market segment (Urde, Baumgarth and Merrilees, 2013).

Strategic Synergy

The strategic synergy for Giordano by achieving a benchmark would be that there would be a greater market segment created. The new market segment of luxurious consumers who prefer other brands might switch to Giordano as it would be in a premium segment (Urde, Baumgarth and Merrilees 2013).

Strategic Positioning of Giordano

The strategic positioning of Giordano is that it sells value-for-money products but its prices are not that high. The Company Giordano has positioned itself as a brand which is famous for its trendy apparel and yet the prices are moderate. (Le, 2015)

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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 which makes the market attractive (Wirtz 2011).
Economic Forces- Hong Kong was ruled by the UK government, prior to its takeover by China. People spend larger amounts on apparel in Hong Kong than in the UK. Hong Kong has a fashion-conscious culture with the 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 is followed in Hong Kong.
Technological Forces- With the 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 the apparel industry are free to trade. There are reduced barriers to US exports (Trade.gov 2015).
Environmental Forces- Giordano supports a number of CSR events such as “Project Hope” and “World Without Strangers” for handling crises in the environment (Wirtz 2011).

Porter's Five Forces Analysis

Bargaining power of suppliers(Moderate)

It is appropriate to build a win-win relationship with suppliers to protect 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 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.

The threat of new entrants (Low- Moderate)

With the advancement of technology, there is a dilemma within the apparel industry regarding the sustainability of long-term advantages over competitors(Zhu and He 2013). The threat of the new entrants remains moderate to low as giving the competition to a brand like Giordano for the new entrants is not an easy game.

The threat of substitutes (High)

Apparels are available in value for money which restricts the capability of improving margins and raising prices for Giordano (Zhu and He 2013). With the ever-changing apparel industry, the threat of substitute products is quite high as the customer switches easily from 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 cutthroat.

Strategic Positioning

The strategic positioning of Giordano is planned to provide the best quality products at competitive prices while entering into the international market. 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 a new strategy

The key stakeholders of Giordano are internal and external stakeholders. There are internal stakeholders for fund investors, shareholders, management team and employees. External stakeholders include customers, suppliers, government, and communities. The main purpose of a business is to satisfy its customers. The satisfaction of customers is influenced by the fund investors as they contribute to the business.

The roles of the shareholders will be to provide the source of finance for Giordano if they expect to increase their value with the growth of the Business (Gudonaviciene & Rutelione, 2009 pp. 397-406). The roles of management manage efficient and lower cost of operations. Employees would provide efficient operation for the organization and help Giordano to attain a competitive advantage with their good training. The roles of suppliers have an important role in supplying raw materials at good quality and low prices which will produce quality products and cost benefit to organizations and consumers.

The customers cannot be satisfied without a win-win situation with suppliers and employees. The government lays out important regulations for the smooth operation of the business. The brand also has a social responsibility towards the community through environmental measures (Pitt and Koufopoulos, 2012).

Stakeholder Mapping Analysis

Significance

Strategy Formulation: The stakeholders' analysis is very important for the companies from the point of view that through the stakeholders' analysis, the company gets to formulate the strategy which is in accordance with the people who are affected by it.
Value Addition: The stakeholders' analysis also helps the company to add value to its business.
Formation of Partnership: The stakeholders' analysis is also very beneficial for the formulation of the partnership.

2.4 Presentation of a 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 reposition 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. There is a great advantage of adopting such a strategy as such companies are considered to be of the 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. 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).

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 to improve 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 a luxurious market segment (Stonehouse and Houston, 2013).
Diversification- Giordano can consider diversifying the 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 to sell products and make 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.

Substantive growth, Limited growth, and retrenchment strategies

For substantive growth of the brand, Giordano may consider franchising and 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).

For limited growth strategies, Giordano may simply aim to retail the existing market share and perform no alternative. Giordano can modify its products according to global needs for the market it enters. The products can be innovated according to foreign markets and increase in market presence. A combining strategy may be adopted by combining the above strategies.

For retrenchment strategies, remedial actions must be taken promptly by Giordano. The brand is known for its value for money which ignores the luxury segment. Competitive pricing strategies can be followed for competing with other luxurious brands in the global market. This would help in attaining the mission of the organization by satisfying its customers. Giordano must focus on generating revenue by increasing margins (Chakrabarti, Vidal and Mitchell 2011).

Blue Ocean Strategy

Blue Ocean's strategic tool can be used for determining the competitive landscape. The products can be designed to minimize 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 the direction through which strategy which will move and methods for the duration of the same. It can also be done on the basis of the willingness or level of the corporation to seek for competitive edge (Johnson, Scholes and Whittington, 2008).

Upon analysis of the mission and objectives, the purpose of the firm to pursue future opportunities is guided. An internal and external environmental analysis is conducted by identifying its strengths, weaknesses, opportunities and threats. The market entry strategies are formulated alternatively for the growth of the organization. Based on this data and analysis, the Blue Ocean strategy can be adopted for future strategic planning. The mission of Giordano is to make people feel good and look great. Blue Ocean Strategy can be used as a tool for meeting the mission of the organization. The Blue Ocean strategy can help in creating an uncontested market space through process innovation(Wirtz, 2011).

Blue Ocean's strategic tool can be used for meeting the 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 the 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 go outside its comfort zone and explore new territories in the market. Blue Ocean tool also helps in developing a strategic canvas and allows the management to see the results by benchmarking. Blue Ocean's strategy helps in moving the organisation towards its competitors by lessening the gap and increasing the chances of achieving goals. As seen in the case of Polo, Ralph Lauren updated prices and looked to capture greater market share. Thus, new markets can be made by not competing but making the competition irrelevant (Omar and Sawy, 2013).

Justification of the Strategy

Increased Profit: Through the new strategy the profit of the Company is likely to be increased. The company must be able to adapt according to the changes of the market and this is the reason that without the adaptation of the changes the company cannot earn profits.
Long-Run Survival: The long-run survival is also possible only when the company gets to adopt the new improved strategy with the changing time.
One of the main reason which blue ocean as a strategy can be undertaken by businesses is that through this long-term performance of the enterprise can be enhanced easily. Further, the profitability level of the enterprise can be easily enhanced through the introduction of this strategy within the business operations. Blue Ocean strategy can enhance market share along with the profitability level of the organization and it is one of the main reasons behind the selection of this strategy. This can surely bring favourable results for the organization in every possible manner and can act as a development tool for the business (Blue Ocean Strategy, 2016).

TASK 4

4.1 Explain the different roles and responsibilities needed for strategy implementation

It is significant for Giordano to place a better and more 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, 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 a brand. A blue ocean strategic move also creates brand equity that has an impact on people for decades. Giordano can make proactive changes in the industry for the purposeful application of the tool. The strategy is an integrated approach for aligning three propositions- profit, value and people. Speed, quality and consistency in providing products to consumers can be attained at a low cost with efficient planning and engagement (Ackermann and Audretsch, 2013).

In the next step, Giordano should try to address the present form of demands made by their targeted clients and the supply provided by them. This would be profitable for the firm to address the overall abilities and quality given by the organisation in their performance (Stonehouse and Houston, 2013).

Considering the entire data collected, the team of Giordano should take effective and strategic actions by considering the market information and approaches for the blue ocean strategy.

In the end, Giordano must monitor and make changes in the strategy (if required). As they are planning to expand their market by increasing the number of stores to 2,600 it is crucial for them to ascertain the market condition and accordingly implement the changes.

strategy implementation process

Roles and responsibilities for implementing the strategy

There are several kinds of responsibilities fulfilled by businesses in order to implement the corporate strategy. According to the given scenario, for implementing the blue ocean strategy responsibilities of all levels of management-

Operational- Lower level management consists of line workers who are engaged with varied organizational activities which prove to be effective in determining long-run growth and success of the business. Here, Giordano International's workforce directly involved in the product process of clothes are allocated responsibilities to speed up the flow of production. They are responsible for meeting the specific demands of buyers. This is because the Blue Ocean strategy is about the reconstruction of industry boundaries. However, they will be provided training to perform better. At this level, all operations or daily basis work is completed by the operational manager in accordance with a direction given by the tactical level. However, 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 includes all departmental managers such as production, marketing, research & development as well as finance. At this juncture, the finance manager is responsible for allocating the financial budget as per the needs of the business. Furthermore, the marketing department is responsible for increasing the customer base with introduction of lucrative marketing strategies. At the same time, low-cost strategy tends to focus on reducing the price of a product so as to maximize the opportunities of the business along with minimum cost. Moreover, the research and development department of Giordano International focuses on exploring new marketing for the purpose of creating a win-win outcome with the implementation of the blue ocean strategy. Here the level of complexity goes to moderate and accordingly some sort of uncertainties can be seen here also(Campbell, Edgar and Stonehouse, 2011).

Strategic- It is the top level of management which consists of the CEO and managing director of Giordano International. They make strategic decisions and ensure the proper resources for the implementation of the blue ocean strategy. For example, cost-effective sources will be accessed to hire personnel and provide them with training to implement new strategies for business. However, they play a vital role in the entire business as they give strategic direction to the company for increasing the overall rate of return. Basically, they focus on the long-term time horizon along with higher uncertainties as they focus on the sustainable competitive edge of the firm.

Market researcher- A researcher in the organisation is highly responsible to identify and allocate the appropriate information and data about their targeted market and concerned business. This helps the managers to formulate a perfect set of action plans for the blue ocean strategy. With reference to this, Giordano is hereby required to hire a relevant market researcher with an updated cognition regarding the ongoing stipulations of markets.

Further, it is the responsibility of the HR manager to recruit talented personnel who can execute the strategy that is related to Blue Ocean.

In addition to this, the major responsibility is towards the proper allocation of resources in accordance with the crucial aspect of the activities under Blue Ocean.

4.2 Evaluating resources required to implement a new strategy

The process of implementation requires proper availability of resources and knowledge for gaining a possible set of desired objectives. It is necessary that the business should address the required form and level of resources that are generally needed by an organisation to overcome the steps and processes defined under the blue ocean strategy. Moreover, Giordano should evaluate the kind of resources requisite to employ the strategy defined by them. In that context, Giordano also needs to address the sort of available and required resources that are helpful for them to execute the Blue Ocean strategy in an effective manner (Wang, 2013). The following is the information about the types of resources which are generally needed by an organisation like Giordano to integrate the blue ocean strategy. Generally, organizational resources are considered the foundation stone for strategy development. However, analysis of resources is the imperative aspect whereby an organization's success can be ensured in the marketplace (Lynch, 2007).

Physical resources- Land, buildings, plant, equipment, etc. are physical resources for any business which support to ensure successful operation in the marketplace. According to the given scenario, Giordano International is applying the blue ocean strategy where new opportunities are explored with less risk. At this juncture, the business will open its new outlet where the requirement of land basic necessity (Giordano Interim Report. 2013). Not only this, but resources like machinery for producing clothes will also be needed along with technologies for record keeping etc. These resources will be acquired by Giordano International to implement the strategy successfully (Giordano FAQ. 2009).

Human resources- Giordano should obtain the requisite number of appropriately skilled employees, agents, contractors, etc. as per the requirements in the expansion strategy. Here, the blue ocean strategy serves as the expansion phase of the firm under which the focus is laid on minimization of cost and exploring new markets in order to determine the long-run growth of the firm (Lovelock, 2011). Apart from this, a skilled and competent workforce will be hired so as to offer good quality services to buyers of Giordano International. At the same time, continuous training and learning programs can also be offered to the workforce for their expertise.

Time: This presents that an adequate amount of time is needed in order to make implementation of the blue ocean strategy in an effective manner. With time all the aspects under the strategy can be covered with greater effectiveness. In order to successfully implement the Blue Ocean strategy it is required by the manager to focus on time resources so that they can accomplish it in the set time period.

Finance: The role of an adequate amount of funds is significant in implementing the blue ocean strategy as involves expansion that is time-consuming. It is significant that a firm needs to possess suitable financial resources so that it is able to accomplish its objectives through the execution of the Blue Ocean Strategy.

Marketing- It is another important approach through which products and services of business will be promoted. However, in order to increase the sales turnover of the business social media marketing can be used by the firm. Moreover, discounting strategies are applied in order to approach buyers. It can be critically evaluated that initially, the business might not attract more buyers but selected aspects would be effective to increase customer base in the long run (Moutinho and Southern, 2011).

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4.3 Discussing targets and timescales for achievement in the organisation to monitor a given strategy

It is highly beneficial for them to ascertain the values and determine the targets that are to be achieved by them by implementing the strategy (Lovelock, 2011). Similarly, Giordano also needs to frame SMART objectives for achieving its set objectives in the right time span. For this purpose, the management of Giordano International set the following objectives for implementing the Blue Ocean strategy-

  • To increase sales turnover by HK‎$30 million till the middle of 2017 (Giordano, 2016)
  • To enhance customer base to 1000 by 2017
  • To discover at least 3 new markets by the middle of 2018

The aforementioned SMART objectives reflect that the time frame and exact aspect of the target are also provided, It would be effective for Giordano International to set goals at each departmental level such as operation, marketing and production as well as sales. For example, the sales team will be motivated with higher incentives along with the establishment of new objectives. It facilitates to retain buyers till 25% at the end of 2017 (Teece, 2010). It enables businesses to formulate short-term strategies for the successful implementation of the blue ocean strategy to discover new markets at relatively lower costs. Apart from this, upper-level management is responsible for discovering new markets with strong research and development activities. It proves to be effective in creating a competitive edge for the business. Apart from this, the sales team is motivated to achieve targets by the end of 2017. Here, short-term objectives such as monthly targets can be set under Giordano International so as to promote SMART objectives and implement blue ocean strategy in a successful manner. Therefore, SMART objectives are important for motivating personnel and all related departments of business. The figures have been assumed as per the analysis of the annual report of the firm. The increase in past years' data is considered in order to set the targeted figures.

Targets and time-scales: Their target is to gain market benefits of revenue and position by offering a unique range of watches with various colours Moreover, they are also planning to supply a new variety of leather jackets to the men's segment via distributors market and stores. Their aim is to improve their profits by 25% from both segments by the end of 2016. Along with this, they have an expansion strategy for increasing their market boundaries in the international sector by introducing 200 more stores in the areas where the demand for the products offered by Giordano is higher. They are planning to achieve this aim by the end of this year i.e. 2016.
The SMART objectives of the Blue Ocean strategy are as under -

Specific- One of the main specific objectives of the business is to enhance profitability level by 10% in one year. This aim is linked with the overall growth of the organization and its accomplishment can surely bring favourable results for the firm (Wang, 2013). Along with this, the expansion strategy of Giordano is specific which is to increase the number of international stores from 2,400 to 2,600 by the end of 2016.

Measurable- In order to measure the accomplishment of this goal, the team of Giordano can compare its present number of stores (2,400) with the stores expanded by the end of 2016 and this can assist in knowing whether the aim has been accomplished or not. Moreover, the profits could be measured by comparing the previous year's balance sheet with the results gained in the current planned year (Omar and Sawy, 2013).

Attainable- To attain the expansion objective, the team of Giordano is required to focus on marketing tools and information along with the demanded product range which is highly preferred by the customers (Lovelock, 2011). In addition to this, the profit-increasing capacity could be easily attained by implementing strategic theories and methods for producing low-cost products and assessing the cheaper supply chain.

Realistic- To attain the specified objectives is a realistic task for Giordano as the business is quite efficient and has the internal strength to meet all the targets in proper manner. They have 8,100 staff members which eventually helps them in executing their business operations.

Time- For accomplishing the expansion and profit-raising strategy, Giordano has a time period of four months.

Smart targets are important as with the achievement of such the achievement of the strategy can be attained in an effective manner. The two important smart targets include the expansion of the business and increasing the profitability of the firm. Smart targets have a significant role in providing direction to a firm towards carrying out its performance.

Conclusion

Based on this report, it can be inferred that Giordano International can opt for market expansion in order to boost its operational base. With its help, the company can able to increase its market share by addressing the opportunities available in different markets. Besides this, it can even expand its product line in existing as well as new markets in order to remain competent for longer. This helps in attracting varied sets of customers.

References

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