The Fashion Industry of Lebanon, SWOT - Assignment Example

Executive Summary The fashion industry of Lebanon is one that is currently recognized internationally and is creating a continuous impact with concepts of fashion. The growth of this industry is one that has carried a unique strategy, specifically because of the demographics and location of the fashion. Specifically, the location has provided international opportunities for the area. More important, the cultural trends and fashion forward aspects, as well as influences of art, have allowed the area to be a main component to driving forward the fashion industry. The beginning of manufacturing and the Industrial Revolution allowed Lebanon to incorporate technology and opened options for globalization, all which are helping the country to become a driving force of trends in fashion. This paper will examine the strategies incorporated into fashion and will analyze the strengths and weaknesses that are a part of the culture. Table of Contents 1.0 Fashion Industry Structure of Lebanon……………………………………………………….3 1.1 Demography of the Industry………………………………………………………….3 1.2 Value Structure of the Industry……………………………………………………….4 1.3 SWOT Analysis………………………………………………………………………8 2.0 Competitors……………………………………………………………………………………9 References………………………………………………………………………………………..13 1.0 Fashion Industry Structure in Lebanon The fashion industry is one that is continuing to grow in various regions, specifically because of the growth and changes within the economy. Currently, the movement into global capitalism and the focus that is incorporated into different industries is the central focus. The fashion industry began to change with the industrial revolution, specifically because it allowed for mass production and exploitation at an international level. Industry leaders in fashion are known to have two components. The first is based on global trends that are reaching different regions. The second is from ethnically diverse types of clothing, all which help with a combination of trends and fashion forward thinking that is based on regional concepts. This is further combined with different regions that combine industrial materials that are available as resources with the fashion that is available (Chandler, 303, 2004). The several changes that are a part of the fashion industry at large have also affected the fashion industry structure in Lebanon and the different concepts that apply to this. 1.1 Demography of the Industry The Lebanon fashion industry has over 92 companies that produce different levels of fashion. The fashion is divided first by accessories, design, footwear and overall fashion. This is further divided by the expected industry that is based on global expectations, specifically which combines the economic scale of fashion with the production. Haute couture is the most expensive. This is followed by luxury items for those who still require high quality but want a lower price. Affordable luxury is the next target market followed by mainstream brands and discount brands. The most fashion forward area is in Beirut, the capital of Lebanon. There are over 5,000 artisans working in this area as well as a Beirut Art Center, which includes exhibition spaces for artists. Schools specifically designed to the visual arts are also a part of the culture. This is being followed with international brands that have introduced fashion into the Beirut fashion line as well as several Beirut artists who work for haute couture fashion lines in the United States. This has led to international fashion festivals in Beirut as well as an increase interest in fashion, arts and design in Beirut (Daily Star, 14, 2010). 1.2 Value Structure of the Industry The competitive dynamics that are a part of the Lebanon fashion industry are based on various components that have altered the trends in the industry. The types of competitive forces that are in any industry include local monopolies, traditional industrial markets and Schumpeterian markets, which include markets that are copied from other products and change the value through innovation (Grant, 324, 2005). The fashion industry is one that is unique because of the blend of products and the sources which are a part of the innovations. The high quality fashion garments are segmented into two types of competition, one which is available internationally and the other which is based on building local monopolies. High end fashion that is available in this way helps to support the national fashion industry and the growth, specifically by changing the economic forces available. The competitive advantage of this allows fashion designers in Lebanon to create a structure where luxury items and haute couture items are specifically linked to the fashion of the nation, without creating dynamics outside of the competition. Industrialized countries then are able to take the innovation and blends and add it into the international forces (Tokatli, 10, 2007). At the same time, Schumpeterian markets are able to become readily available with the copies of the high end fashion products that are copied in smaller cities and for other fashion aware consumers. The clustering that is a part of the fashion industry in Lebanon is the second component associated with the industry. Clustering is defined on the regional location of a specific industry and how this changes the level of wealth that is within the region. Clusters develop specifically because of networks that are within one area and which lead to spill overs in other regions. Technology is one of the components that is a part of this, combined with industrial dynamics and external economies that relate to this. Specialization of supplies then combines with demand that moves to other regions to form the cluster (Hakanson, 4, 2003). The fashion industry in Lebanon is able to work with location as a large advantage. The location of the nation is next to Europe, specifically with ties to Italy, Spain and France, all which are fashion forward industries to the West. These are combined with fashion that moves into Eastern parts of the world and which is based on Arabic dominance. The combination of these two factors and cultures allow the arts and fashion of the area to carry a specific weight both in unique components to the fashion from the culture as well as an impact from surrounding countries. Lebanon and the ties that are associated with these areas creates a cluster that moves from local dynamics to one that is able to influence boundaries at an international level, specifically because it is located as a hub to the rest of the Western and Eastern counterparts. Current trends and growth in network technologies further this specific process for the cluster to continue to expand (Bianchi, 3, 2003). The third component that changes the value structure of the fashion industry in Lebanon is the lifecycle. Traditionally, lifecycles were determined by the impact and trends that were in a specific industry, with expectations that the trend would take time to be initiated and would eventually filter with less demand. However, the supply chain in more contemporary times has the ability to reexamine the traditional life cycle, trends and demands. Quick responses, flexibility and management are all incorporated into the life cycle to ensure that trends continue. Many customers are now interested in remaining loyal based on the quality of products and the capabilities within a company. More important, an internal focus on the continuous production of supplies, followed by results that are seen in the external environment, help to enhance the life cycle of those that are looking at the fashion industry (Handfield, Nichols, 323, 2002). The commands and trends that are within the fashion industry are able to show the specific life cycle that can be recycled and which creates loyal customers. This is done through asymmetrical power relations that are incorporated into those in Lebanon. The brands that are available in Lebanon are able to create a sense of being fashion forward in the area for a specific period of time, with a short life cycle for the highest trends in the area. However, the global impact and clustering allows the quality materials and fashion to be recycled into other industries, creating a second type of power relation in the fashion industry. The industry is known to offer the fashion in the country first, than reproduces this for a global market. The life cycle then lasts longer and is more continuous in demand. This combines with the sense of being fashion forward which eliminates the inconsistency in demand with new products and trends in the country (Tokatli, 67, 2006). The next component which affects Lebanon and the fashion industry is the strategic groups that are associated with the fashion. A strategic group is defined as a group of firms that follow the same strategy within a business to reach a competitive advantage. Typically, this is done by one group having a larger amount of products available with diverse options. Other groups will follow the same outline; however, there will be specialization in one of the products. This helps to build relationships and changes the competitive advantage of those that are within the industry (Porter, 130, 1980). The concept of fashion and strategic groups in Lebanon is associated with high – end fashion that began as a national group, such as Zara. The attribute of this fashion company was to provide luxury type fashion and cutting edge designs that combined both ethnicity and forward thinking components for fashion. This standardized the fashion thinking and built strategic groups within Lebanon. Fashion forward and fast fashion is two of the terms which were initialized from this first strategy. Other fashion designers are following this formula as well, by combining the Lebanese culture and art with fast forward thinking and trends in design. Since each is based on the artistic works of designers, the unique components come from the new releases of clothing that then make an impact on the national supply chain and the international demands for the clothing (Lopez, Fan, 279, 2009). Another component that is affecting the Lebanese fashion industry market is specialization over the value structure of the industry. There are two main advantages that are a part of the strategy, including the comparative and competitive advantage. The comparative advantage is based on other internal fashion industries in Lebanon, including those who are continuing to influence the culture. The competitive advantage is not only based on the internal structure of the industry but also the competitive value that has now been recognized internationally. The value structure changes because of the advantages of the fashion firm at an international level. Technology as well as modern styles is some of the contributors to the value structure (Kogut, 1, 1985). For Lebanese fashion, this is the ability to combine modernism with culture to create a competitive advantage. The value structure is one that is now advertised as not being available in other parts of the world because of the distinct and artistic designs and cultures. This then becomes a trend that is desired at an international level, specifically because of the fashion forward trends that are incorporated into the styles and which lead to more demand in the industry (Leadbeater, 5, 2001). 1.3 SWOT Analysis The strength that is a part of the Lebanese fashion is first based on the corporate social performance from the strategies that are associated with fashion. The main component is to create a different product that is specific to Lebanese culture and which incorporates the fashion and design that are ethnic in nature. The geographical locations continue to think with diverse styles and trends for fashion while implementing different levels of geographical diversification. For fashion designers, this is creating a hub for fashion to continue to grow as the international looks and trends are based on the incorporation of culture and fashion forward thinking (Brammer et al, 1025, 2006). The external environment leads to continuous growth in demand and an industry that is continuing to boom, specifically because of the approach to fashion and sales that provide continuous trends and demands for the supplies. While the fashion industry is able to expand with the approach taken for trends, there are several weaknesses. The development of fashion in Lebanon is growing in demand not only because of the local artisans, but also because of the several high – end fashion designers and the links made at an international level. Most fashion designers are connecting first to Italy and the West, as well as taking trends from the East. However, governmental strategies and the incorporation of a global market have not completely provided the correct alternatives for manufacturing and distributions. The inability to create a completely open arena for the fashion industry and the limitations on the resources as well as incorporation into a global structure have led the fashion industry into struggles from governmental policies, stakeholders and competitors that are also competing internationally (DTI, 4, 2004). The opportunities that are available for the fashion industry in Lebanon are based on the way in which the industry has approached the specific trends. The internal environment is currently structured on releasing the fashion at a national level first, then leading the trends into international relations. This allows the fashion industry to continue to grow and to be in demand both nationally and internationally. Beirut is able to become a hub for the fashion industry and provides a continuous demand for the growth and distribution of the different needs that are a part of the industry. The threats that are a part of this are based on the continuous rise in fashion as well as the global interactions. The movement of multinational companies into Beirut and the interchange between Western countries may lead several in Lebanon to have more competitors than expected and can lead to difficulties because of the global exchange that is now a part of the industry. 2.0 Competitors The fashion industry carries several unique competitors because of distribution channels, advertising methods and the expectations in each arena. The fashion industry is required to have a sense of collaboration, specifically by working with fashion shows and other outlets to display unique lines of clothing. However, the ability to move forward in the industry is based on the innovation and demand that is a part of the fashion industry. The ability to have an edge over competitors in the fashion industry is based on having an edge over competitors while ensuring that the designs are not costly while causing complications with the channels for distribution. For this to work correctly, there has to be a societal demand that continues to incorporate fashion into the main distribution channels and which has a continuous trend that draws toward specific brands and clothing items because of the style in which it carries (Easey, 109, 2002). Four competitors which show specific strategies are Elie Saab, Abedmah Fouz, Zuhair Murad and Bassam Fattouh. These designers are known to remain competitive in the market of Lebanon and have created an approach that is driving fashion forward within the industry. Elie Saab is one that has built a brand name by combining ideas of luxury and modernism. The brand name is also known to create a cultural combination or collage of designs, specifically which combines the culture of Lebanon with the West. The market is known to incorporate not only Lebanese culture, but also is a distribution channel throughout France. The designer is also well – known for providing high end garments to Hollywood stars with continuous expansion from the Beirut location to other arenas. The design includes haute couture, ready to wear fashions and accessories which create three types of trends and demands within the marke (Elie Saab, 1, 2010). This particular competitor strategy is one which shows the incorporation of cluster strategies, cultural influences and global markets that are based on fashion forward thinking. Abed Mahfouz is the next designer that shows a specific level of competition. The beginning of this specific fashion design company was based on the modern woman and was dedicated to sales in the Middle East. This led to wedding collections that were added into the main designs and led to haute couture designs. When moving into the high – end luxury fashion, the openings were distributed throughout Italy as a cultural expression of luxury. The collection has now moved into the same stigma in New York with an alteration from haute couture to ready to wear and wedding gowns (Abed Mahfouz, 1, 2010). Zuhair Murad is the third designer known for specific collections. The strategy of this designer also includes haute couture, ready to wear and bridal wear. Specialized designs include collections for cruises that are more substantial. The first designs were built specifically for Beirut and were shown in a boutique. The specialized look the designer was known for combining Eastern and European styles into a modern look. He is now known as an international designer and is featured in haute couture fashion shows; however, boutiques and national distribution are still the primary part of the operation of Zuhair Murad, specifically to continue with the national influence of the designer (Zuhair Morad, 1, 2010). The last example of designers is Bassam Fattouh. The strategy of this designer was to take out the initial components of being an independent artist and instead to build a corporate structure based on beauty and health. Beauty products, cosmetics, haute couture, ready to wear and other applications are a part of the designs. However, the incorporation into a corporate entity has provided the option of building beauty parlors that offer cosmetics, assistance with makeovers and fashion forward trends. The focus is on women who are interested in beauty that reflects luxury. Since concepts of beauty, cosmetics and fashion are all associated with the same corporation, it provides an edge that is based on the international theme of beauty among women (Bassam Fattouh, 1, 2010). The strategic group of each of these competitors shows the basic designers coming from Lebanon and building an internal structure then offering designs to the West. Elie Saab and Abedmah Fouz specifically use international designs as a main component to ensure that the works and design are incorporated to higher end demands. Combining the haute couture, ready to wear and accessories provides the competitive edge for the fashion designers. Zuahir Murad has a competitive edge over these two designers, specifically because of the national presence which is maintained. The boutiques that are continuously a part of the style allow the designer to continue to remain a part of the Lebanese culture, even with the growth and expansion into international haute couture designs. This allows the reputation to remain consistent both nationally and at an international level. The strategy of Bassam Fattouh takes the same approach with beauty parlors located throughout Lebanon which have grown into international recognition because of the cultural associations with the fashion. The four designers all have taken the same approach for competition in building a reputation as national designers that are based on Lebanese culture, then expanding this into Western and Eastern influences. This is combined with the strategies that allow each to maintain and move ahead by going into an international component of the designs that are offered. The competition then allows the designers in Beirut to remain at a central location while having an international influence. However, the competitive edge is one that is a part of the internal environment, specifically with the continuous influence and demand at a national level while keeping the main headquarters of the businesses in Lebanon. Zuhair Murad and Bassam Fattouh are the two designers that have used the Lebanon national identity specifically to create a cluster and to gain international demand for the beauty products that are associated with Lebanon. References Abed Mahfouz. (2010). About Abed Mahfouz. Retrieved from: http://www.abedmahfouz.com/. Bassam Fattouh. (2010). About Bassam Fattouh. Retrieved from: http://www.bassamfattouh.com/home.html. Bianchi, Annaflavia. (2003). “Industrial Reshaping and International Production: the Italian Garment Industry and Its Linkages with Morocco, Romania and Turkey.” Clusters, Industrial Districts and Firms: the Challenge of Globalization. Brammer, Stephen, Stephen Pavelin, Lynda Porter. (2006). “Corporate Social Performance and Geographical Diversification.” Journal of Business Research (59), (9). Chandler, Alfred D. (1990) Scale and scope: the dynamics of industrial capitalism, Belknap Press. Daily Star. (2010). “Born Again Beirut.” Fairfax Media. DTI (2004) Review of the Governments Manufacturing Strategy: Competing in the Global Economy – The Manufacturing Strategy Two Years On at http://www.berr.gov.uk/files/file18188.pdf Easey, M. (1995; this edition 2002) Fashion Marketing, Blackwell Publishing. Elie Saab. (2010). About Elie Saab. Retrieved from: http://www.eliesaab.com/site.html. Grant, R. (2005) Contemporary Strategy Analysis, Blackwell Publishing. Hakansan, L. (2005) ‘Epistemic Communities and Cluster Dynamics: on the Role of Knowledge in Industrial Districts, Industry and Innovation, Vol. 12, No. 4, pp433-463. Handfield, R. (2002) Supply chain redesign: transforming supply chains into integrated value systems, Financial Times/ Prentice Hall. Kogut, B. (1985) ‘Designing global strategies: comparative and competitive value-added chains, Sloan Management Review, Summer 1985, pp15-28 Leadbeater, James. (2001). “Recognizing Culture.” UNESCO. Lopez, Carmen, Ying Fan. (2009). “Internationalization of the Lebanese Fashion Brand Zara.” Journal of Fashion Marketing and Management (13), (2). Porter, M. (1980) Competitive Strategy: Techniques for Analysing Industries and Competitors, Free Press. Tokatli, Nebahat. (2006). “Asymmetrical Power Relations and Upgrading Among Suppliers of Global Clothing Brands: Hugo Boss in Turkey.” Journal of Economic Geography (7), (1). Tokatli, Nebahat. (2007). “Global Sourcing: Insights from the Global Clothing Industry – the Case of Zara, a Fast Fashion Retailer.” Journal of Economic Geography (10). Zuhair Murad. (2010). About Zuhair Murad. Retrieved from: http://www.zuhairmurad.com/ Read More