Introduction
Managed operations are important for a business to maintain its competitiveness and provide customer satisfaction at its best; further such operations help to reduce the cost of operations and improve its communication using sophisticated effective communication systems (Business strategy: 2009, 81814-82214). This is what so far contributed to the tremendous success of Giordano from a minute to a multinational company (Barnes: 2003, 101-227). Through such managed operations, the company has been able to open up many branches across many countries of the Asian Pacific area. These operations have been successful through adaptation of the segmentation strategy as according to Caroline and Jennifer (2007: 301-335) which is effective in the expansion of a company. This has helped it fight with the current dynamics of the market and still win the favor of customers due of its enhanced accountability, it has also increased on warehousing and supply chain management strategies. In its operations it has embraced technologies of IT and educated most of its employees to carry out such operations thus enhancing its operations in marketing its products, casual wear and also in its operations such as logistics, procurement and ultimately administrative communication to its employees and customers. This essay does a critical analysis of the operations of this company and how they contribute to its competitive advantage, its challenges and proposals to mitigate these challenges. It also takes a keen look at how Giordano monitors its employees and engages them in decision making and also how it keeps in touch with customers.
How do Giordano’s operations contribute to its competitive advantage?
The operations of Giordano have largely contributed to its success as a world class organization. As according to Bhaskar (2010: 102-108) it has intelligently approached the market with eminent customer service with the help of its proficient sales persons among other employees whom it attributes for its success. It has also ensured that streamlined recruitment of only competent employees is done through improved HRM operations enhancing strategic decision making (James & John: 2007, 637-653). It has further extended its ability to enhance operations through training its employees using seminars and workshops a clear show of employee engagement (Frances, Aloysius & Irene: 2010, 297-318). This has further been enhanced by some of its substituent branches such as that of Singapore receiving ISO certification. It has gone further to engage its employees by continued good pay, good employee turnover and this has made it have a customer oriented focus. It also has a speedy development of product cycle from manufacture, distribution to the consumer allowing competence in communication a key factor for a company to win customers. This company believes to attract customers it has to instill some practices, these are: Frugality to save on cost, computerization to improve the spread of information, value pricing for both their customers and products and also stringently controlled operations of the company. This has brought about the incorporation of innovative business strategy with technology earning the company excellence and commitment to serve and maximize its profits reflected by the awards the stores win particularly those of Singapore and Hong Kong (Jesus, Javier & Jesus: 2009, 5087-5107; Stair & Reynolds, 2008). It also ensures high standards of employees through continued evaluation, replenishes its stock from a central supply station and uses technologies of IT to monitor transportation of products till arrival to the consumer. This helps delivery and procurement services to be of eminent levels and reliable thus customer retention. Using technology it has managed to forecast the demand, the current style of market and also refill stock at night to prevent inconveniencies during the day and also dissemination of authority and power thus helping to save on money and cost. This has helped it to expand and maximize profits, learn from its mistakes and also expand on the scope of the products it offers. The company has also fetched opportunity in market and also those of mismanaged companies such as Apparel of Asia to increase its customer attraction. Using the lean system as proposed by Hines et al (2004: 994-1011) the company has concentrated on value particularly for its customers by continued satisfaction and being more price sensitive while selling its products. The value for their products have been increased with its locations is in strategic regions accessible to the customers such as Shanghai, Beijing and Germany among other offices while its main office is in Hong Kong. It has also increased its value stream from selling wear specific for ladies and men to selling of unisex assortment causing increase in customers. Management of products from the manufacturers to the customer has also been improved through efficient logistic and warehousing. The lean method that emphasizes on less wastage has also foreseen Giordano release products when needed to prevent running out of stock and also deter overstocking. This has made the pull for their products increase tremendously; they launched a new line of product which was the blue exchange that made customers flock in their shops forcing them to expand further. This is exclusive for this company making it award winning thus achievement of successful marketing, eminence understanding of customers and with increased profitability. This company has also integrated the three business strategies in its operations since Giordano private companies act as a stockholder and has long term mission to give the customer best wear of all kinds, make profits and also expand globally. It has also used business unit strategy by monitoring their customers’ trends using IT to better understand them, set prices from its central office in Hong Kong and also give customers quality at its best. Using the operational business strategy it has improved its logistics making the shipping of goods to customers effectively and also restocking which is done during the night to ensure customers shopping are not inconvenienced. The corporate, operational and business unit strategies all contribute to the success of Giordano.
Challenges in operations of Giordano as it tries to expand
As this company dealing with clothes and other casual wear tries to expand it is facing the challenges of management particularly in the human resource management (Barnes: 2003, 101-227). This is particularly so since its operations are controlled from one central station though the recruiting of employees and their selection is done for diverse countries which have different regulations concerning labor and tariff barriers. This company also has a problem of supply chain management which is significant in the adding of value, for the flow of information and also distribution of good to get to consumers (Stair and Reynolds, 2008). This has resulted to increased cost of management since all processes; orders are worked on from its main office in Hong Kong. This has further posed as a threat for time wasting thus poor delivery of products to customers. This has lead to their products being regarded as good but not great particularly due to its mode of presentation showing a lack of strategic fit and an unwillingness of the company to cooperate with its competitors and substituent branches. This may affect the company’s progress in the future making it not to recuperate incase of a crisis. The retaining of power to be wielded by one organization also lacks to provide dissemination of power to other branches thus too authoritarian. This is seen by the fact that all operations in Giordano are managed from its headquarters in Hong Kong. With the increased customer needs Giordano must streamline these systems to instill and maintain their satisfaction. This company has also a major problem in warehousing which is an important aspect of good delivery to customers Robert and Kristen (2010: 286-293). Since it segmented it’s warehousing to retail shops causing an inefficient flow of information from the supplier to the customer. The lack of proper inventory in the presentation of its brands to customers has made it face competition from other similar companies making it to lose identity of its initial brands Shipping in this company is slow thus has an inconsistent repositioning of its brand since it is not quite budget conscious of its customers. Complains on the quality of products due to poor warehousing methods have been raised minding that their product is sensitive to effects such as sun, dust and airing conditions. The warehousing of small quantities of goods to their many retail shops is much expensive compared to transport to wholesale shops thus dropped returns.
Recommendations to cope with these challenges
To cope up with these challenges of warehousing and logistics that threaten to cause a significant turn around for this company then there is need for the company to streamline some of its operations through strategic planning. The application of project based associations will help a great deal with managerial and structural problems of Giordano preventing the lack of transparent recruitment of employees and also poor logistics in the release and delivery of products for sale to and from the warehouses (Jonas & Karin: 2006, 249-265). To improve the supply chain management better development of customer insight to broaden the scope which customer delivery can be of help to Giordano. This is going to be enhanced with the use of planning that is enterprise resourced so that product availability is made appropriately and with eminence inventory on its presentation (Edurdo, Jessica & Piccolo: 2009, 559-573). Lean manufacturing reducing on waste and increasing profit will help increase the flow of goods efficiently, the value stream where value of customers is taken as priority and increase on the pull where customers hunt for the company’s products (Hines et al : 2004, 994-1011). This helps the company increase competitive advantage and attractions of customers due to increased satisfaction. This would also encourage global out sourcing enhancing supplier integration enabling Giordano to locate the best supplier to reach out to customers. Managing of the supply chain would be efficiently improved by the rating of such a department so it weaknesses can be recognized from its performance analysis Stephen and Ronnie (2005: 3-11). Improvement of ware housing can be done through inventory so that reduction in cost can be done as this will help the overall returns to increase. Reducing shipping anomalies and disseminating the management of this company will help to reduce paper work needed saving on time for disbursement of goods. Giordano should also increase rate of stock take and also that of picking orders as this will ensure fast delivery to customers, proper training of employees in this department will be of good use for Giordano. This will reduce complains of customers on dissatisfaction issues. These problems are all going to be sorted out by the adherence to curb the forces of dynamic market so that new market entrants, purchasing power for customers, rivalry, technology and supply power are dealt with as according to Porter (2008: 79-83)..
Using MIS and related tools to monitor employees
Giordano has embraced the use of management information systems to monitor employees and ensure effective business operations which cover management of personnel and consumers, technologies and procedures to be used to iron out company issues and concerns as according to Philip and Lane (2006). MIS is significant since it helps to highlight the weak and strong sides of the company; it helps to collect the views of employees which are important for company development and is crucial for predictive outcomes of the company especially in the area of competition (Wang & Wang, 2010, 53-73; Nigel, 2005). This has helped them to monitor how their employees’ serve customers by increasing the speed, the monitoring of how goods are moved from warehouses. It has also helped to barcodes all items and their pricing based on their color and style then this information is replicated in the company’s main computer. This has further helped to reduce fabrication of sales using IT skills. These are also used to determine when replenishing of stock and also its release based on orders made should be done. This company has been seen to monitor employees with the help of customers to select the ‘service star’ based on the best customer provider (Barnes: 2003, 101-227) using cards of customer feedback posted in their office rewarding such employees. This information is crucial in the creation of value for business and also enhancement of accountability (Khajit and Phapruke: 2009, 95-107). This has been seen by ability of information system with IT being key determinants of its future by neutralizing its competitive edge, enabling it to control both its stock and logistics. This has made it to be recognized as the best apparel company in Asia. The use of information technology has also been implemented by this company to help in managing company innovations and predictions on the marketing outcomes in terms of sales and preferences of the people. This has been a good method to steer up distribution of products, their advertisement and also the submission of new reports on the fashion trends of modern day as proposed by Richard and Bruce (2009: 401-405). This has been shown by its ability to understand what employee engagement entails by giving them training and also credit for augmented sales. It is documented to motivate its workers particularly those it recognizes have low sales through offering best salary package for the best turnover. It has further embraced computerization as one of the key factors of success thus increase value pricing for its employees It has further enhanced the fields of procurement and HRM enabling perfect dissemination of information from authority to other business departments in Giordano which has been seen to enhance communication, ensuring transparency in every sales by bar-coding it and improve stock release and replenish among other logistic activities. The company is also seen to organize panels where issues concerning the company are openly discussed so that development of the company is through joint forces of customers and personnel. The company has also learnt the current trends of marketing and using its skills, has developed the use of social networks to take and give orders to customers, monitor the movement of products by their employers to customer and the dynamic preferences of their products by customers based on age has been studied (Dave & Steve: 2004, 10-15). This is seen through emails from customers during the selection of the service star who is rewarded thus a way of monitoring performance of employees.
How MIS systems may fail recognize a problem
Such a problem in this company may fail to be recognized in a situation where this system has been hacked. This is because this company depends much on a local area network for its IT thus hacking would cause the loss of important information due to diverted server such as in e-mails from employees ( Elms, LaPrade & Maurer: 2008, 1-9). It can cost the company the sales it makes and orders requested so that they are delivered by a different company making it to incur losses. Delivery particularly in the supply chain and logistics would be diverted to wrong clients causing the company to incur losses. Lack of proper protection of network can also cause exposure of disclosed information about customers and personnel causing internet theft and great loss for the company both in terms of customers and profits (Chaffey & Steve: 2005, 102-108).
How to analyze customer preferences
Customer preference is information significant in determining the trend of sales to customers and their changes in lifestyles. This helps to determine how to reduce the cost and sell to customers at a lower cost, improving customer retention and satisfaction and also enhance sales and marketing. This can be done using social networks where customer profiles and preferences are listed, how often they buy based on their age and income earnings. This has been seen as an effective ways to know the dislikes and likes of customers. Using questionnaires from shoppers and also asking for their opinions can help in sourcing for their preferences (Rupnik, Kukar and Krisper: 2007, 89-104). It has enabled marking of retailers who buy more and also banking and crediting to ensure there is no fraudulence. Though this being the case it has raised concerns of security where many customers experience misuse of information and incurring of losses once networks are hacked posing as a serious threat of internet theft. The issue of privacy is also of concern since these data collection demand personal information collection and monitoring for changes. Warehousing has also been used to monitor customer preferences based on the replenishing and release of stock. This is because the more a product is replenished the more it’s preferred and thus precise and accurate information can be obtained. This is advantageous due to its accuracy; it is also cost effective since it does not require paper work or exposure of private information. Though this is the case it is dependent on season such as winter and summer since the preferences are varied. It can also be affected by poor delivery systems in the supply chain (Nishi & Konishi: 2010, 1947-1966).
References
Barnes, D. 2005. Giordano (Adapted from the case written by Jochen Wirtz, 2003)
Bhaskar, C. 2010. Finding Competitive Advantage in Adversity. Harvard Business Review, Vol. 88 Issue 11, p102-108
Business strategy. 2010. Federal Register, Vol. 75 (249), pp.81814-82214
Caroline, T. and Jennifer, D. 2007. Market Segmentation. Journal of Marketing Management, Spring87, Vol. 2 Issue 3, p301-335.
Chaffey, D. and Steve, W. 2004. Business Information Management Improving Performance Using Information Systems. Business Information Searcher, 2004, Vol. 14 Issue 3/4, p10-15
Eduardo, S., Jessica, W., Ronald, F. 2009. Using Simulation-Based Training to Enhance Management Education. Academy of Management Learning & Education, Dec2009, Vol. 8 Issue 4, p559-573
Elms, R., LaPrade, D. and Maurer, L. (2008). Hacking of Corporate Information Systems: Increasing Threats and Potential Risk Management Techniques. CPCU eJournal, Vol. 61 Issue 2, p1-9
Frances, B., Aloysius, N. and Irene, H. 2010. When Suits Meet Roots: The Antecedents and Consequences of Community Engagement Strategy. Journal of Business Ethics, Aug2010, Vol. 95 Issue 2, p297-318
Hines et al. 2004. Learning to evolve: A review of the contemporary lean thinking. International Journal of Operations and Production Management, Voulme 24 issue: 10, pp. 994-1011
James, K. and John, G. 2007. Business strategic decision making: the role and influence of directors. Human Resource Management Journal, 2007, Vol. 17 Issue 2, p99-117
Jesus, P., Javier, B. and Jesus, G. 2009. The intervening effect of business innovation capability on the relationship between Total Quality Management and technological innovation. International Journal of Production Research, Sep2009, Vol. 47 Issue 18, p5087-5107
Jonas, S. and Karin, B. 2006. HRM in project-intensive firms: Changes and challenges. Human Resource Management, Vol. 45 Issue 2, p249-265
Khajit, K. and Phapruke, U. 2009. Management Accounting Information System Effectiveness and Business Value Creation: An Empirical Study of Thai Listed Firms. Review of Business Research, 2009, Vol. 9 Issue 2, p95-107
Nigel, S. 2005. Operations Management, 5th edition, Pearson Education Google books pp.69- 73
Nishi, T.; Konishi, M. (2010). An optimisation model and its effective beam search heuristics for floor-storage warehousing systems. International Journal of Production Research, Apr2010, Vol. 48 Issue 7, p1947-1966
Porter, M. (2008) The Five Competitive Forces That Shape Strategy, Harvard Business Review, January 2008, pp. 79-93.
Phillip, K. and Lane, K. 2006 marketing management 12th edition Pearson education
Richard, M. and Bruce, R. 2009. Enabling Business Processes through Information Management and IT Systems: The Fast Fit and Winter Gear Distributors Case Studies. Journal of Information Systems Education, Winter2009, Vol. 20 Issue 4, p401-405
Robert J. and Kristen B. 2010. How and why an independent audit matters. International Journal of Disclosure & Governance, Nov2010, Vol. 7 Issue 4, p286-293
Rupnik, R., Kukar, M. and Krisper, M. (2007). Integrating Data Mining And Decision Support Through Data Mining Based Decision Support System. Journal of Computer Information Systems, Spring2007, Vol. 47 Issue 3, p89-104
Stair, R. and Reynolds, G. 2008. Fundamentals Information Systems, 1st edition, Cengage Learning
Stephen, G. and Ronnie, L. 2005. Enhancing the competitive advantage of transcultural businesses. Journal of European Industrial Training, 2005, Vol. 19 Issue 9, p3-11
