The year 1999 would be a milestone for the company and a turning point in its process of international expansion. The opening process of its wholly-owned shops abroad reached its maximum with the inauguration of 42 establishments. In this same year the large shop of the chain in the Opera area of Paris was opened.From 1999, the frequency of opening wholly-owned shops abroad lessened progressively until 2002, when the rate of growth became negative. In this exercise establishments were closed in Germany (1), Andorra (1), Argentina (2), Brazil (1) and the UK (1), until there was a total of 6 closures and only two openings.This stage lasted hardly six years. In 2003 it left the Argentinean market completely, closing 4 establishments which were still in its possession. One year later it sold a franchise of its shops in Chile; and in 2005, it did the same with 8 shops in Israel. Leaving behind a multimillion investment.
Introduction•International ContemporarySpanish clothing chain•Established in 1984•Founder- Isak Andic•Headquarters- Barcelona•Brand Ambassador- Kate Moss•Mission- “To be present in all the cities of the world”
• More than 2500 stores in 108 countries• Collection mainly produced in China & Morocco• Turnover 1.408 billion Euros for 2011• 644 new stores in 2011, 11% growth• Collection Line- Casual Suit-evening Sport-MNG jeans
• National with International Growth 13 1984-85 – Started & 5 retail outlets and by 1988 they were• In seven years the company reached 100 retails outlets in Spain and a sales volume worth 48 million Euros. improve the internal fashion, design, system of stock image and good management, price-quality logistics and product relationship. distribution Global Concept
• 1992 - The first steps outside the Spanish market were made with the opening of two stores in Portugal• 1997 - The volume of business generated abroad surpassed that of national business• 2009 - It reached 76% of total volume with a turnover of 1,480 million Euros• At Present – Now Mango is present in 100 countries with more than 1,400 retail outlets distributed throughout the world
Key Growth Strategies Mangos greatest assetlies in its PEOPLE. Mango has based itsbusiness culture on humanrelations, teamwork and thecontinuous training
Key Growth Strategies Own LOGISTIC & SCM SYSTEM whichallows it to manage, direct and takedecisions throughout the complex processof design, supply, manufacture, sales andafter sales in a completely automatic way. • Reduce delivery times & streamline distribution of the product; • Manage orders • Control quality; • Reduce infrastructure costs ; and • Be flexible and adaptable at all levels
Key Growth Strategies All manufacturing activitytakes place through thirdparty companies, about 200SUPPLIERS throughout theworld.New suppliers are includedevery season to covertechnical requirements
Internationalization Of MangoStages in the International Expansion Strategy by Way of EntryStage Period Nature Way of EntryFirst Stage 1992-1995 Introduction Franchises. (Learning)Second 1996-2002 Expansion Franchises. Wholly-owned shops.Stage (Growth)Third Stage 2002-2005 Consolidation Wholly-owned shops only in markets in the euro, dollar and yen zones. Franchises in markets in the euro, dollar and yen zones. Diversification Only Franchises in all those markets outside the euro, dollar and yen zones.Source: Based on information from MANGO.
Factors behind Globalization of Mango• THE FRANCHISE AS A FORM OF ENTRY• MIX INTERNATIONAL MARKETING STRATEGIES – PRODUCT STRATEGIES - The company makes common collections in 89 countries that have completely different cultural, climatological and morphological environments. – Portfolio of brands - The products of the company are not commercialized in all the countries under the same brand. On an international level, the chain uses four names derived from the acronym or combination of the original MANGO brand. • MANGO – Original brand name • MNG • MANGO Barcelona – Used in China, wants to be associated with European Origin. • MNG by MANGO – Used in USA, ‘the Anglo-Saxon world uses initials a lot• PRODUCT LABELLING - MNG brand appears both in the outside labeling as well as the inside, in such a way that the same labels can be used in all the markets.• PRICE STRATEGY – In general, MANGO applies a medium-high pricing policy, which accompanies its product policy of medium-high quality
• Specific market segment – young women who like fashion• Price and positioning - ‘A middle class positioning’ but above ZARA.• COMMUNICATION - MANGO assigns 4% of the total sales in each country to advertising• Subcontracting - Mango manufactures none of the garments that it sells• Logistics and Supply chain management – more than 140 suppliers around the world, and each region specializes in one type of clothing that it can manufacture “at a competitive price.”• Computer platform to manage its supply chain – Mango can manage its more than 7,000 direct employees as well as the additional 22,000 people who work for Mango indirectly• As at 31st December 2010, the Mango group had 1,757 stores, 1,456 of which were located abroad because of Cultural Diversity of its products. “The challenge now is to consolidate the position in each country”. - Isak Halfon Director of International Expansion of MANGO
Future Sustained Growth• Explore New Niche Market• Reinforce Brand Image as Designer Product• Personalize Retail Outlets• Plan financial resources• Invest in new Technologies and facilities• E-business
Facts and FiguresBusiness figures for recent financial years are as follows:DESCRIPTION 2007 2008 2009 2010Net turnover 1,020 ,356 1,100,705 1,145,156 1,269,523Net profit 129,139 143,258 148,016 101,164Stores 1,094 1,228 1,390 1,757Countries 89 90 97 102Sales (%) 76% 77% 78% 81%Employees 6,973 7,865 8,132 8,690
Conclusion• Mission “To be present in all cities in the world and projecting a coherent and unified image”• Three fundamentals: 1) Offer quality garments at a reasonable price 2) Manufacture in countries with more competitive production costs, obtain a low cost and keep prices competitive 3) Control operating costs thanks to up-to-date information systems.• The concept of a global brand have been key factors for Mangos sustained growth over these years.