Export of quality clothing at a men's wear manufacturer -a study of market strategies at the House of Monatic in South Africa
Independent thesis Basic level (professional degree)Student thesis
South Africa, as many of the countries on the African continent, has for a long time been discriminated against when it comes to export of clothing and textiles. The trade regulations are now getting more favorable and the US and European markets are becoming more open for exports from the African continent.
We came in contact with the House of Monatic, which is a manufacturer of high quality men’s wear clothing in South Africa, and found that they were interested in us doing an export analysis of the company. The House of Monatic is an old colonial company founded in 1906 with over 1000 employees. The head office is situated in Cape Town, South Africa. Monatic manufactures licensed brands such as Yves Saint-Laurent as well as their own brands. At present the company is exporting to countries on the African continent, United Kingdom, Ireland and the United States. The thesis was mostly carried out at the House of Monatic in Cape Town where we stayed for three months. The method was to interview all the managers at the company to find out how the export management is run today and through theories find alternative exports strategies and how to improve the company’s current strategies. We also made a customer survey, which we sent out to Monatic’s customers to see
The end of apartheid in 1994 opened the borders not only for further exports but also for imports from overseas countries. This made Monatic’s domestic market share shrink and expanding through exports to new international markets became inevitable. Because the trade regulations are becoming more favorable we believe the international market is where profits can be found, especially on the US market. A risk when exporting is that profitability can be dependent on the exchange rates between currencies. As a solution to this problem Monatic could convince its international customers to do business in the South African currency, Rand. Monatic is currently establishing contacts in the US where they are setting up a new sales office. Monatic is going to introduce one of their own brands by letting a customer called Nordstrom sell it.
We think this is wise to sneak into the market and to not undertake large marketing campaigns, which could prove to be too costly. We believe it is risky for Monatic to enter several markets at the same time and that Monatic should concentrate on positioning itself on the US market at the moment. But we think it is smart to establish new contacts on other markets so that Monatic is ready when the opportunities come. We believe the Sub Saharan market has some potential that is worth further investigation. The UK market seems to have stagnated at the moment and we think it will become more profitable when the economy in Europe has recuperated. In the meantime it is best not to make to much investments but to harvest the profits that can be gained. There seem to be confusion about weather Monatic should focus on being a designer house or a manufacturer. It is difficult to combine the big bulk customers with boutique customers in the same production line.
Many of the customers wants improved design according to a customer survey we conducted. We also believe that the customers need to be organized in a classification system depending on volume and profitability. This would help Monatic to decide on how to distribute its limited resources. IT is becoming more and more frequently used among Monatic’s business partners. To not risking being pushed out of the market it is important to be ahead of competitors. By introducing an online order system and a product tracking system at the home page Monatic would decrease the workload of the sales staff. Furthermore it would make it easier for customers and Monatic would gain more competitive advantage by this facility. We also believe that by establishing their own shops in South Africa, Monatic’s brand would be strengthened and become more competitive on the domestic market. A Monatic shop would give an entire atmosphere and service to the customer that would
Place, publisher, year, edition, pages
Ekonomiska institutionen , 2003.
Executive Master in Project Management, 2003:78
Business and economics, South Africa, clothing industry, export, Monatic, market strategies, marketing, MFS
Economics and Business
IdentifiersURN: urn:nbn:se:liu:diva-1926OAI: oai:DiVA.org:liu-1926DiVA: diva2:19253