The case describes the experience of Fashion Constellation S.A., a textile clothes producer on the Romanian market and how the changes in the country affected of its activity. Starting with 1990 many changes took place in Romania, not only in the economic area, but also in social and political ones. Therefore, in order to survive and develop, Fashion Constellation Co. had to adjust its market approach.
By 1997, the company Fashion Constellation S.A. had become one of the major players in the young (15-25), male and female fashion sectors. Its reputation in the business environment was that of an ambitious, design-oriented company led by an unconventional, abrasive and maverick figure that inspired considerable loyalty among his employees. Between 1990 and 1999, the five facets of Fashion Constellation's corporate strategy, i.e., operations efficiency, portfolio diversification, penetration of new markets, brand recognition and, later, product quality, were considered the "five sides of the Fashion Constellation pentagon". Each of these aspects of corporate strategy was considered to be equally important in order to achieve the fundamental objective of increasing company profitability, and, consequently, shareholder value. The underling objectives of the company were to consolidate its position on the Romanian market, and to penetrate new foreign growth markets, alone or in a joint-venture. For mature markets, the partnership with a famous brand and quality certified producer was a vital need.
The General Manager, Radu Leonte, suggested certain actions to be taken. Among top management staff, the debate was mainly around the opportunity to expand the company's offer to the schoolchildren segment, and 30 - 40 years old adults market segment as well, while keeping the focus on the initial 15 -25 teenagers and young adults segment. Another segmentation was related to the further market strategy options: to target the low-end market or the high-end market (about 3 % of the total Romanian market), or both. Finally, the third area of debate included penetration of the international growth market.
Author: Gabriel-Petru Luca, Ph.D.
Institution: “Gh. Asachi” Technical University of Iasi
Number of pages: 12
Language: English
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