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    Risk management in emerging fashion markets

    Arvaniti, Christiana (2010) Risk management in emerging fashion markets. Doctoral thesis (PhD), Manchester Metropolitan University.


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    Apparel retailers operating in global markets need to consider all kind of risks associated with their expansion strategies. Emerging markets present a unique profile of risks including geopolitical, regulatory, financial, currency and governance. Companies operating in emerging markets must protect their investment and develop safeguards against risks. This can be achieved through an understanding of the country‘s requirements for business and by tailoring their supply chain strategies to meet the unique needs of each market. The European integration allows countries with emerging and developing economies to offer opportunities for business growth and high returns. However, as they conceal greater risk than mature markets, a coherent strategy is necessary with strong communication links within the supply chain and an effective risk management framework is needed. Through the initial literature review it was hypothesised that countries at different stages of becoming emerging markets would present different levels of risks for fashion apparel firms. The meaning of risk within the business environment is evaluated and the tools that organisations have developed according to companies‘ risk appetite. A deductive qualitative approach to this research employs case studies of three Eastern European Countries - Hungary, Czech Republic and Greece and four fashion retailers – Esprit, Mango, H&M and Zara. Risks, uncertainties and disruptions that the companies had reported were connected with the risks identified in the selected markets. Twelve models were developed in order to test the hypothesis and satisfy the objectives. The models were based on the impact of, and the frequency of the risks identified by measuring the risk factors of Political, Economical, Social, Technological, Legal, Environmental and Supply Chain (PESTLE). First of all, the evaluation of the risk factors in each set of companies and countries was presented by creating a generic model showing the different levels of risk and following with an identification of risks concealed in each country for each company. On the basis of risks and uncertainties, each of the selected companies presented information regarding risks according to its nature and its risk appetite. The generic model was developed using IRM, COSO and ONDD frameworks. The risk factors were measured qualitatively and were determined by multiplying the impact and the PhD Risk Management in Emerging Fashion Markets Manchester Metropolitan University iv likelihood presented in additional tables, and expressed as ratios. The results of this study do not show significant differences in the examined risk areas as it was expected. However, Greece presented a slightly riskier character than Hungary and Czech Republic which are still developing. This can easily be seen in the models.

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