How Effective Management of Operations Contributes To Competitive Advantage at Giordano
Globalization, fierce competition, and unpredictable changes in customer tastes are some of the issues that threaten the future of many companies. Companies need to manage their operations effectively to counteract the effects of these market forces and gain competitive advantage.
Competitive advantage has been defined as something that a company does particularly well (David, 2011, p. 9). This means possessing a unique resource, capability, or technology. Porter (1985) pioneered the view that competitive advantage is best achieved through the activities, or operations, of a company because a certain ...view middle of the document...
com.hk). Its brands include Giordano Concepts, Giordano Junior, Giordano Ladies, and BlueStar Exchange. The company operates in a competitive industry, with competition from companies including Gap. Giordano has grown to dominate the Asian market by focusing on operations components such as lean production, employee motivation, speed of delivery, and others. Analysis of these aspects follows.
Giordano designs clothes that appeal to customers, both in terms of features, benefits, and prices. Elegance of design makes a product stand out and appear superior in the eyes of customers. Great design, however, should not be emphasized over affordability. This consideration influences Giordano’s decision to keep its prices low while providing customers value for money (Wirtz, n.d., cited in Barnes, 2007).
The operational processes at Giordano are engineered to eliminate waste, cut costs, and deliver products faster. Speed is important in the fashion industry due to rapid changes in customer tastes and preferences. By demanding fast procurement services from its suppliers and shortening its production cycles, Giordano has been able to withstand economic crises and grow (Wirtz, n.d., cited in Barnes, 2007, p. 40).
Giordano’s success has also been attributed to high-quality customer service provided by its “dedicated, well-trained, and ever-smiling sales force” (Wirtz, n.d., cited in Barnes, 2007, p. 39). Commitment to quality also earned them ISO 9002 certification and various other awards. The quality of a product refers to how well it fulfills the needs, or purposes, of the customer. Producing quality products and services, therefore, requires knowledge of customer needs and expectations. Giordano attains and sustains the quality imperative by training its staff to be competent enough not to make errors. Production equipment and processes are also checked for accuracy and consistency. Feedback mechanisms, either built into production systems or received from customers, are important in providing quality products and services.
Capacity, facilities, and supply chain relationships are the other operations management decisions that contribute to competitive advantage at Giordano. Capacity, which is the output level that a company can achieve in a given time period, is an important operational consideration because it determines how well the company matches supply and demand (Brown et al., 2001). Using Information Technology (IT) to forecast demand and manage its inventory, Giordano has succeeded in running simple stores,...