Analyze Mantero Seta Spa(TM)s resources, strengths, weaknesses and competences

Question 3:

Analyze Mantero Seta Spa’s resources, strengths, weaknesses and competences.

Briefly evaluate its marketing mix. Recommend how Mantero Seta Spa could build on its strengths and competences to develop its competitive advantage.

Question1:

Through PESTEL analysis, evaluate the major external environmental drivers influencing the strategic environment of Mantero Seta Spa and the textile industry in China.

Mantero Seta Spa’s background

Mantero Seta Spa is a textile company in northern Italy. It was a major player in high-class fashion accessories and garments, mainly produced from silk. They managed their company as business-to-business operation and played superior role in international textile industry more than 10 years, selling their products to brand name fashion houses around the world.

However, on 2001, Mantero suffered big problems from the economic slowdown, after the terrorist’s attacks, followed by SARS crisis. After that Mantero directors realized that they should rationalize their organization strategy to sustain the profit and maintain competitive advantage.

They decided to find the new market and looked for a new group of the buyers, and their target was China. In Mantero’s opinion, China was a very attractive market. There were several factors attracting Mantero to chose China. First of all, they already had the commercial office in China which used for dealing with the supply of silk and yarn. Another factor, China was high substantial economic growth country which affected the rising of huge amount of high income level of population. Moreover there also had an increasing of demand in higher level need which preferred to consume more luxurious goods and services.

Due to their objective, they would like to find the way how to enter to market in China, distributing products under license and operating the business as Business-to-customer operation which sell their product under Mantero’s own brand.

Mantero Seta Spa’s resources

Mantero Seta Spa’s has tangible and intangible resources.

Tangible Resources

The first tangible resource is assets which are land and buildings. Mantero has a headquarters office and sale management office in Italy as well as Dyeing& printing buildings, weaving factory and warehousing. Furthermore, Mantero also had commercial offices in Paris, New York, and China. Another resource is people. Mantero employs 921 people, professional in specific tasks including expertise manager teams who are educated people and have high experience working in textile market.

The third is financial performance, which Mantero used for establishing a long-term competitive advantage. The last element is Office supplies, tools and machines which the company used in their operation and production processes.

Intangible Resources

Firstly,it is relation with suppliers: Mantero has an established relationship with suppliers. Secondly, it has a significant sales network with its suppliers, agents, including distribution licensees, with famous brands that distributed their products to the customers. The next factor is the relationships with customers. Mantero emphasizes on customer feedback consideration by listening and talking to customer and giving faithful and dependable suggestion to increase customer satisfaction. Last factor, the employee competences, which include skills, knowledge, experience and motivation of employees. This element is very important because it is a key factor for the organization’s growth that also helps retaining the customers and gaining their loyalty.

Mantero’s Strengths

Mantero has a strong corporate image, embedding with “made in Italy” and high quality product which created the up market textile company. They also use advance technology as the one of their strengths which was mainly dyeing and painting techniques including modern weaving process. The company increased innovation and creativity by providing the professional manager and the high level of craftsmanship staff to deal with designers of client’s firms and cooperate together to create new pattern or design of fabrics. Moreover, they were expertise in R&D activities which they were continuously doing research and experiment to innovate new design of products and new market potential evaluation.

This was combined with improvement and development of their products to be of highest quality in textile market to satisfy the customers. The next strength is considered customer’s positive feedbacks which Mantero emphasized by the existence of competent and well-trained staff to listen to the customer’s needs and advising them (for example, on after -purchase care) that helped to strengthen the relationship on the long term basis. Besides they had a set relationship with suppliers and license fashion houses that they have been doing the business together for many years.

Mantero’s weaknesses

However, Mantero had some weaknesses within their company. Mantero’s organization was divided to be many parts as product and distribution, accessories and distribution, marketing and communication, production and logistic and human resource and organization. All of these departments were controlled and operated by their own so it was quite difficult to all of these departments to coordinate together and followed the same organizational policy or strategy. Consequently, the internal competition was created in the company. Eventually, management recognized it as a problem and created the unified structure.

Another weakness of Mantero, that was particularly important considering the new strategies, was lack of expertise on business-to business operation and no experience on emerging markets.

Mantero’s Competences

Mantero’s competences were derived from their background and cultural distinction. The company occupied the position at the top end of the textile market. They produced their silk products using innovative techniques and high technology weaving process which made their textiles and garments a superior quality product. For the development of the product they had professional staffs with high level of craftsmanship and innovation that were specialized in specific tasks such as preparing fabric, drawing skilled and coloring artistry as well as interpreting and adapting styles to create and design fashion trend of product. Besides, they had effective relationship marketing.

Mantero focused on satisfying customer’s needs by a sufficient integration and coordination between workers in their marketing function which they worked together as the teamwork to serve the customer’s needs. The company had well-developed sale network which was used to distribute their finished licensed products across very prestigious brands through their autonomous distribution channels, which were 69 agents and 1,800 point-of-sales for men’s accessories and 36agents and 2,200 point-of-sales for women’s accessories. The last competence is dedicated consultation with customers, giving advice and suggestion about the product including its coordination with the rest of the collection and its relation with the house’s stylistic.

Mantero’s Marketing Mix

Product

The products of Mantero are fabrics, accessories for men & women, and women’s clothing which were mainly produced from silk material including yarns and other natural materials. They were produced both as finished goods and semi-finished goods which have high quality, excellent brand image and are contained in luxurious package.

Furthermore, they maintained their products as a high standard of “Made-In-Italy” which kept their position as the leader in the fashion supply chain.

Price

In addition to superior quality products and strong luxurious brand image, there was less price competition and inelastic demand. So the prices would be quite high and expensive which the company focused on the group of customers in high and medium/high segments.

Place

Mantero sold their products through their head sale offices in Paris and New York to their retailers, agents, and famous license fashion houses such as Kenzo, Emlio Pucci, Calvin Klein, and etc. Moreover they also distributed their product to various branches point-of-sales. Mantero had flexibility in volume of goods with ability to distribute products depending on suppliers or retailer’s need.

Promotion

Mantero kept positioning and maintained their fabulous brand as the leader player of textile industry. They promoted and launched their product through the exhibition, fashion, show, and sponsor’s events. They also offered the information to customers by posting on company’s website, news and presses.

Recommendations

For recommendation part, I would examine the way how Mantero Seta Spa could adapts their strengths and competences to improve their competitive advantage according to Balance Scorecard concept which is divided to four main perspectives. These are financial perspective, customer perspective, internal perspective and innovation and learning perspective.

Financial perspective

For entering Chinese market, the company should invest in obtaining the long-term competitive advantage. For example, more investment in finishing product lines, tools and machinery to produce finished goods to sell the customers. Improve warehousing and stocking, and prompt distribution to their end customers at any time. Concentrate on the market development to learn more about the way how to do the business as B2C operation and catch the new target market in China.

Customer perspective

Improve customer satisfaction by emphasizes on two-way communication as listening and talking to customers. Consider to customer feedback and design products to suit each customer’s preferences. Moreover, they should provide the convenience of purchase and after-sale-service to the customers. All of these could help the company to create strong relationship with customers on the long run and make customers become loyal to the company.

Internal perspective

Improve organizational support to manage staff to satisfy customer’s need by giving staff training how to treat customers and create a positive impression. The next point is to elaborate on employee motivation by supporting them as an availability of tools and mechanism to perform jobs and ensuring effective communications to accomplish job requirement. To achieve the success, Mantero needs to ensure that people are aware which they should work as a team and willing to do so. Cooperation and teamwork are necessary to succeed.

Furthermore, Mantero should increase the level of supplier satisfaction by giving them responsiveness, cooperation, and convenience of communication.

Innovation& learning perspective

First of all, Mantero should continue innovation which is the key factor tin making their products unique and distinctive; carry on concentrating on research and development and training employees to share ideas to launch new products’. The next element is increasing employee’s satisfaction by emphasize on care-how. Making the company as a great place to work and care deeply on their works including their body & mind which could implement the care system as face-to-face communication, community-focused and family center. Enhance employee competence. The company must ensure employees are adequately trained to support the achievement of organizational goal. Besides, Mantero needs to learn and focus on China market learning its marketing structure and trend, culture, customer perceptions, buying behavior including style and preference. All of these can influence the organization in the business strategies to adapt and apply in China market.

PESTEL analysis

Political Factor

The first element is the deregulation of state management, as in the past China had the state-owned companies which paid attention on economies of scale, the public goods, the nation profits rather than special profits from a particular industrialists or and any individual organizations in the country. Now it is replaced by the corporate strategy and China is more focused on profit-maximizations, paying more attention to competitive advantage to prevail over rivals. The next element is China’s new legislation rules and entering World Trade Organization (WTO) to attract foreign investors. They would warranty its accountability to a system following western policies.

Economic Factor

China had the substantial economic growth. There was a large amount of employment rate which created higher income levels to various groups of people. They had more disposable income to spend on the luxury products and services. The next element is fashion distribution trend in China. Fashion industries were focused on retailing methods which was the main option to delivered fashion products to target market.

However, due to high economic growth, an increasing on population growth which creates the large amount of labor force in China, these factors caused inflation rate to grow faster. Fast growing inflation rate would give the bad effect on the stability economic and consumption rate. Another risk was the undervalued currency of China which could not guarantee the dollar on the low rate in long term. Furthermore, there was the devastation from SARS crisis in 2003 which China still has consequences from. These threats might give the bad impact to foreign companies’ interests.

Social Factor

The major factor is consumer buying pattern. Consumer buying behavior was analyzed based on several elements. The first element was geographic differences. In China, consumers would consumed product depends on seasonal factor such as bought sweaters or thick clothing in winter and bought garments made from light fabric in summer . The second element was people’s belief which consumed product based on their financial status and social classes. Owing to an increasing on higher income, there was a rising of upper-class and middle class people in China. Both of these groups were interested more on consuming expensive goods and services for a convenient and enjoyable live. They preferred spending money on any luxurious products and services especially from foreign famous brands which could underline their high status among in society. From these reasons, international luxurious brands played a significant role in Chinese market.

Technological Factor

There was a growing development of communication channels in China, especially on fashion products which people would stick to a brand image more than to the product itself. Fashion companies would spent a lot of money on advertising media, public relations and sales promotions which could inform customers about products, persuade customers to purchase their products and generally speaking, create brand awareness and recognition. According to the communication media, fashion goods in China often were promoted through newspaper, magazine, as well as television the powerful media that presented products to the huge amount of customers. Moreover, many companies promoted their goods through the Internet. It has become a powerful media which delivered product information and provided personal services to customers.

Legal Factor

Major problem which happened in almost every country especially in Asia was product-counterfeiting. China also faced accusations in imitating famous brands, its especially well-known foreign brands that suffered. Certain companies have withdrawn from the Chinese market because of the counterfeits. Chinese government is trying to control this problem by launching the legislation to protect the intellectual property rights and brands. On the other hand, China market is very big and controlled by various local leaders. So it is quite difficult for Chinese government to solve this problem.

Conclusion

Mantero Seta Spa together with many other companies faced the crisis followed by the 11/9 and SARS; even if they made wise steps investing in machinery and land to retain profits and avoid over production they still needed a major change in strategy. Therefore they considered entering a new market and it was decided to be China.

China is a rapidly developing economy, with increasing disposable income of population and more and more people entering upper classes and elite. They tend to spend money on luxuries to underline their high social status. Besides, Mantero has supply connections in China.

Mantero Seta Spa has enough tangible resources (land, machinery, finance) and intangible resources (established connections with suppliers, sales network, RD and innovation) to enter the Chinese market. It is also possesses high expertise in the industry combined with a good management team. Their weaknesses are that it is a new market and new type of operation (Business-to-Customer instead of Business-to-Business that they had used before) that is challenge. The company needs a winning strategy, which is using the strong sides with learning to improve the weak.

Chinese government is making policies to attract investors, and entering WTO has made trade easier as well. Economical growing is stable and people increase spending. With the development of logistic, communication channels and other technology (using media, Internet) in China the company can easily create brand awareness with adverts.

However, Mantero should pay attention more on and some relevant factors and several risks such as trading policy, transportation costs, high inflation rate, value currency changing and counterfeiting fashion product problem which could make a bad impact to their organization. They need to ensure how to protect them form these threats.

Furthermore they need to learn and develop more on business -to-customer operation, to find the best choice to distribute their product directly to the customers; and to attract end-users to purchase their product by increasing their satisfaction and brand awareness. To gain the success, Mantero needs to choose the right marketing strategies by doing more research about the nature and characteristic of Chinese market as was stated in Bearden et al, (2001) “understanding culture, language, customer, and other unique aspects of international market of cultural target market is critical for marketing success”.

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