His family had moved from Turkey to Barcelona in the 70s.
Andic started his trading activities in clothes by buying and re-selling Hippie shirts to his friends in the seventies. By 1975, at the age of 21, he had already four stores and two market stalls
By 1980 the business had grown so much that Andic decided to start outsourcing the design and manufacture of his garments. Andic?s clothing line was marketed under the Burbuja and Tejanos Isak labels. So Andic found himself managing two product lines: garments supplied by wholesalers and those designed and manufactured exclusively for him. The clothing business designs were so popular that the former soon outsold the garments supplied by clothing wholesalers. Andic continued to use the same trading business model for the next four years, up until the foundation of the Mango brand in 1984.
The brand name was selected after the mango fruit, an exotic and tasty fruit whose spelling was common in many languages. It also had the advantage of not being already a registered trade mark in Spain, differently from several other brand names he had tried to register.
Andic wanted to have his stores in premium locations. Initially he thought to keep supervising the shops by himself, but when the business kept growing he realized that he had to adopt a different model.
By 1988, Mango had fewer than thirteen stores in Spain. That year saw a major change of direction for the chain. The move proved a crucial one, with Mango redefining its product range, shop d’cor, garment quality and price, and brand image. Until then, the business had focused almost exclusively on selling denim garments. Now, the Mango firm decided to design and market an off-the-peg collection.
Since then, Mango chose to specialize in a very specific target: young, modern urban woman aged between 17 and 35 years: We are not interested in taking on other trading format concepts, or creating men’s or children’s segments. Mango wants to give its customers an intergraded product range. Our aim is (ndr, so) that the woman who dresses in Mango can buy absolutely everything there, from street clothes to evening wear, including sports gear and accessories This is the only way to give customers the confidence that they are going to make the right choice Andic claimed.
Mango carefully conveyed its image through its window displays and catalogues (published for each collection). The company began to use top models such as Claudia Schiffer and Naomi Campbell, among others, to convey its corporate image to both its customers and the general public. Many up-and-coming models also posed for Mango, providing the springboard for future success.
Mango invested in advertising not only within its stores, but also in the mass media, unlike some of its competitors. In 1992 Mango started its international Expansion. The founder’s dream was to be represented in every city of the world?. By 1996 Mango had 265 stores, of which 115 abroad in 22 different foreign countries.
Up until 2000, Mango had not dared expanding into the US market despite the matter had been internally discussed several times. However, with the new Millennium, the Shareholders had decided that the moment had come to enter some of the world?s largest markets. Mango vowed to enter USA first and later on one of the Asian markets bearing strong potential.
After having carefully read the case study, students are expected to research all relevant data, build the suitable theoretical framework and address the four following points:
1) Write an essay outlining the retail trends of the world’s prt-a-porter market. The essay will include a short outline of the competitive scenario during the years between 1995 and 2010. Analyze the main industry players, their sales volumes (for at least 3 subsequent years) and their respective positioning in relation to Mango. Students should also mention which among the different competitors represent the most direct competitors for Mango and motivate the choice. Analyze in depth such competitors by examining their critical success factors and operating model. (Minimum 600 words).
2) Analyze and describe Mango’s business model and international expansion. What has been the strategy behind this expansion? What have been the distinctive characteristics of Mango’s supply chain model? What factors have been behind its rapid success? How has its business model been influenced by international trade regulations? Under which category of the FDI theory would Mango fall? Did the international expansion approach adopted by Mango influence in any way the firm’s operations in the home country? Was there any change of the overall strategy linked to Mango’s international expansion? (Minimum 800 words)
3) Analyze the US market’s attractiveness of America as a fashion retail destination. Discuss the pros and cons related to entering the US market. What were the entry barriers for Mango at the moment when the USA entry was being decided (beginning of 2000)? Would any of these barriers materialize in the years subsequent to Mango’s US entry? Which competitors did mainly suffer from Mango’s entry and how did they react to Mango’s introduction (Minimum 600 words).
4) Analyze a large Asian market along the categories used in the Mango’s USA market entry strategy. Motivate the choice of the market that you suggest Mango should consider for the entry. What entry strategy should Mango select? How would the legal and fiscal regulation of the chosen country impact the prospects of Mango retail business? (Minimum 600 words).
Each of the four questions has a weight of 25% of the total Mid Term assignment. The Mid Term assignment will represent 40% of the total mark; the final exam will represent 60%.
The assignment is individual and will need to be handed over as a word file in A4, double spacing, Arial 10 format to ESE Didactic Office by March 5th, 2012. It should include tables and as many references as possible to the course material so far dealt with (first 8 chapters of the C. Hill International Business Manual).
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