MANTERO SETO SPA:
A STRATEGY FOR CHINA
I. Introduction
In the realm of business, having a clear understanding of the changes in the environment has become one of the most indispensable attributes that a company should possess. Specifically, the subtle changes in both the internal and external elements of the environment should be regarded intently. The workings of the market as well as the dynamics of the company that are directly affected by external environment are among those that require attention. Moreover, understanding the other elements like the product life cycle, value chain, key success factors, competitive advantage, and general market attractiveness allows the company to recognize how it will take on changes and adapt to the dynamics of the internal and external environment. This paper will look into these concepts and apply it to the case of the textile industry.
Essentially, the focus of the study will be Mantero Seta SPA and its strategy to gain entry in the Chinese market. Thus, the discussions will be having an analysis of the capabilities of the company and how it will fit into the Chinese market. For clarity and coherence, the study is divided into several parts that discuss specific marketing concepts mentioned earlier. In the same account, the study will base its observations on the case study made by and (2004). In the same way, the arguments and observations are to be based on academic and scholarly journals that deal directly with the Chinese market and other theoretical market concepts discussed in the case study.
II. Product Life Cycle
Mantero Seta SPA is said to be one of the top suppliers of textiles in the fashion industry in the world. (2004) This implies that the company is involved highly on the market of clothes and other items of fashion. This also indicates that the speed of change in the entire market where the company operates is considerably high. This means that the companies that operate in this sector tends to require some level of flexibility as changes in styles depend highly on the season and the subtle changes in the environment. Moreover, as and (1999, 1) noted in their work, that flexibility alone will not be able to be highly useful for the company if it does not have the resources to compete with the other players in the industry.
In this regard, it is apparent that the product life cycle of Mantero Seta SPA, as well as those other players in the said industry, is rather fast. The creation to the termination of a particular element of fashion may have a significantly short cycle. (2004) Added to that piece of caveat is the fact that such changes are predictable and some are not. For instance, imminent change in the climate could trigger the need for a specific type of apparel to be set in the market. In the same regard, change in trends could also elicit certain changes on the demand of the consumers. In any case, it has to be emphasised that the company that operates in the industry where subtle changes could trigger and end or a beginning of a new product life cycle.
III. Value Chain
A company’s value chain refers to (1985, 1992) indicated as a means to acquire competitive advantage. This means that these are the set of attributes on which the company could employ in order to realise its goals of penetrating and even succeeding in the Chinese market. According to the case study, Mantero has focused its attention in improving its value by centring on its reputation, design and production methods. In the context of international trade and market entry, the reputation of the organisation holds a great deal of importance to ensure smooth sailing. (2003)
On the other hand, the concept of design basically indicates the differentiation methods of the company. Basically, the ability of the company to establish strong differentiation capabilities in the market places it in a powerful position with reference to the other players in the industry. For instance, Mantero has been noted to create designs that exemplify quality and creativity. (2004) This is how the products of the company are differentiated with the other items in the market. This is a good thing for Mantero given that the products in the market are highly interchangeable. () In the context of production, this area covers the issues of logistics as well as the actual creation of the products. Specifically, the ability of the company to minimise the costs of these part of the operations tends to signify added savings and even possible avenues of investing these saving to the other aspects of the company’s operations.
IV. Key Success Factors
There are several key success factors that the Mantero could employ in determining its performance in the process of entry in the Chinese market. These include the creation of products complementing the geographical differences of the country; proper marketing methods; and proper use of the channels of communication in China. As indicated in the description of the Chinese market in the case study, it is apparent that the market is highly diverse as it encompasses a considerably large area. Elements of ranging from culture to climate tend to dictate the buying behaviours of the public depending on the norms and traditions established in the said part of China.
In the area of using the proper marketing methods, Mantero could employ its reputation. It has been mentioned in the case study of and (2004) that the industry where Mantero operates is highly influenced by the brands and pre-existing notions regarding a particular company. It has similarly noted that the company only need to do is to strengthen its brand name with its core customers and establish ties with the industry so as to establish a firm grip in the Chinese market. The company could take advantage of this by effectively using channels of communication that are proven effective in the Chinese market. These includes ffashion shows and fairs, mass media, traditional catalogues, and through the World Wide Web. In doing so, Mantero would be able to build up its name recall and further establish their reputation in the Chinese market.
V. Market Attractiveness
The Chinese market is claimed to have been among the untapped areas in terms of textile and fashion. According to the case study of and (2004) there are several reasons why international textile suppliers have seen China as a viable place for trade. After its accession to the WTO, flocks of businesses and organisations of all sizes have been seeking to operate and trade in the Chinese market. One reason is seen in the exchange rate of the country against the US dollar. The perennial risk in this respect is the fluctuating and even volatile nature of the exchange rate between China and the US. Other threats include the after effects of the SARS virus that shook the country in 2003. Up until now the Chinese government is still battling some isolated cases of the sickness throughout the nation.
In addition, there is an established ring of counterfeit luxury items in China. Majority of these items are fashion products which directly compete with the original products of foreign companies operating in China. However, it has been mentioned in the case study that the Chinese government has been taking steps to ratify legislation protecting the patented brands in the market, including fashion trademarks. An added inducement for the companies towards China is the improvement of the technologies relevant to the operations of the textile industry. This is also fuelled by the increase of awareness of the buying public in China regarding the importance of brands in their buying decisions. As maintained in the case study, the buying public in China is slowly turning to a brand conscious public as the individual consumer show signs of seeking to stand out from the rest of the people. This is especially true in the younger generations of Chinese consumers who have apparently been attuned to the existing methods of retail.
A. Strategic Fit
The intention of Mantero to take on the Chinese textile market appears to be a sensible idea as it fits well into the strategy of the company. The multi-million company has been pent up in boosting its international presence as it has established numerous operations in strategic parts of the world. Another strategic and potentially lucrative market is seen in the Chinese market. Seeing this context, it is apparent that the company’s intent to take on the Chinese market is “a strategy with its environment results in superior firm performance.” ( 2002) Basically, this means that the entrance to the textile market of China is a logical choice and a rational decision for the leadership of the Mantero Seta organisation. In addition, the case study has similarly highlighted that the market of China will similarly benefit with the entry of the company in their industry.
B. Sustainable Competitive Advantage
After the company have realised its key success factors, and have successfully infused themselves in the market, all they have to do is to establish a set of actions that will ensure that the company will stay competitive and even achieve the top spot in the textile industry. In order to sustain its competitive advantage, the case study indicated that the company is highly acclaimed of its relationship marketing along with the top of the line designs that they offer their clients. According to the case study, the constant regard to feedback by Mantero is the key to the company’s success in keeping the loyalty of their core customers. In doing so, the company is given a pre-arranged list of customers that they have to regard highly and treat with utmost care, especially as the buyers of the industry have the power over the company. Moreover, the use of an effective information management system allows the company to store individual data regarding the individual clients and refer to them in future occasions.
VI. Conclusion
Marketing concepts have been deemed one of the most essential elements in establishing a plan of action for any organisation. The discussions above have highlighted the importance of knowing these aspects directly affecting the company and how these are employed to their advantage. For instance, knowing the product life cycle and value chain of the company tends to eliminate the possible costs that could incur in their operations. In the same regard, establishing the key success factors of the organisation allows the company to set up benchmarks to measure their performance. In the same regard, the competitive advantage of the company allows them to determine their strengths and play it so they can penetrate the market effectively.
Moreover, the regard of both the internal and external environment tends to be the key to the success of the Mantero Seta SPA in its international operations. In the context of their entry in China, it is less likely that they will fail in this endeavour. The discussions above have highlighted the capabilities of the company and how it is apparently fit to operate in the Chinese market. All they have to do is to devise a plan that would endow them enough flexibility to deal with the subtle changes and radical adjustments that takes place in their operations in China. Upon establishing a stable hold on the market, Mantero Seta SPA could now take on ways of sustaining their competitiveness in their chosen market.
Credit:ivythesis.typepad.com
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