Successful strategy leading to lock-in – lessons from the Danish garment industry, 1960 to 2000

Abstract

The article analyses the development of two prominent Danish clothing producers in the years after 1960, Tage Vanggaard's dressmaking factory and the slacks manufacturer Brandtex, during which period each had their success despite the general trend within the industry. The article has as its point of departure an evaluation of the companies' strategies and the difficulties they encountered when the need arose for strategic change. It concludes that both companies got caught in what we might call a strategic paradox: their success was the result of a willingness to maintain the same strategy for about 20 years, but the problems they encountered following these years (an inability to see the world differently) was the result of the same willingness. It is argued that a key to understanding the lock-in that happened could be found in the narratives that evolved inside and around the companies.

Keywords:

• strategy
• strategic change
• lock-in
• corporate culture
• Danish fashion
• clothing industry
• Brandtex
• Tage Vanggaard

Acknowledgements

The article is based on a paper presented at the conference ‘Fashions’ 11–13 June 2009 in Milan organized by EBHA. The preparation of the article was funded by the Heritage Agency of Denmark. The sections about Tage Vanggaard are based on the article ‘En kjolefabriks kamp for overlevelse’, written in cooperation with Louise Skyggebjerg and published in Erhvervshistorisk Årbog 2009.

Notes

1. Michael E. Porter, On Competiton (Harvard: Harvard Business School, 1998), 39ff.

2. Porter, On Competition, 64f.

3. Porter, On Competition, 57f.

4. Andrew M. Pettigrew, ‘Context and Action in the Transformation of the Firm’, Journal of Management Studies 24, no. 6 (1987): 659.

5. Pettigrew, ‘Context and Action’, 658.

6. Philip Selznick, Leadership in Administration. A Sociological Interpretation (Berkeley,CA:Harper & Row, 1984), 18f.

7. Susanna Fellman et al., Creating Nordic Capitalism – The Business History of a Competitive Periphery (New York: Macmillan, 2008), 253.

8. For example, John F. Sherry, ‘Brand Meaning’, in Kellogg on Branding, ed. A.M. Tybout and T. Calkins (Hoboken, New Jersey: Wiley, 2005), 31–61.

9. Per H. Hansen, ‘Organizational Culture and Organizational Change: The Transformation of Savings Banks in Denmark, 1965–1990’, Enterprise and Culture 8, no. 4 (2007): 920–53. Hansen develops his theory about the significance of the narratives by drawing on research into corporate culture, here particularly by Karl Weick and Joanne Martin.

10. For further considerations regarding the use of newspapers as sources see Per H. Hansen: ‘Writing Business History Without an Archive. Newspapers as Sources for Business History – Possibilities and Limitations’,in Markets and Embeddedness. Essays in honour of Ulf Olsson, ed. Carl-Johan Gadd, Staffan Grane′r and Sverker Jonsson (Göteborg:Göteborg University, 1987), 99–120. It is a central point raised by Hansen that newspapers become primary sources in answering questions relating to how companies wish to be seen.

11. Andrea Colli, The History of Family Business 1850–2000 (Cambridge: Cambridge University Press, 2003), 48.

12. Colli, The History of Family Business, 71.

13. Roy Church, ‘Family Firms and Managerial Capitalism: The Case of the International Motor Industry, Family Business, ed. Mary B. Rose (Aldershot: Edward Elgar, 1995), 115.

14. Danish Business Archives, Tage Vanggaard, serial number 89, ‘Salg 1974’.

15. Cf. the categorization in Jesper Strandskov, Internationalisering af virksomheder. Nyere teoretiske perspektiver, (Aarhus: Handelshøjskolens Forlag, 1995).

16. Beklædningsindustriens Sammenslutning, Fra Idé til massesalg (The trade organization within Clothing: ‘From Idea to Mass Sale’), Author's translation, like the following quotations not originally in English.

17. See, for example, Politiken, 5 January 1969; BT, 17 August and 13 September 1968; and Jyllands-Posten, 27 August 1968.

18. Interview with Erik Brandt, 27 November 2008.

19. Danish Business Archives, Tage Vanggaard, serial number 90, suggestions for market strategy.

20. Interview with Bent Warming, 29 June 2009.

21. The rapid decline in the turnover of the TAVA brand in the years following 1969 was probably also a result of Bent Knudsen, the successful product manager of TAVA, leaving Vanggaard in the late 1960s.

22. Originally, the Multifibre Agreement ran for four years, but pressure, especially from the governments of the South European countries and from the USA, resulted in it being repeatedly prolonged, so that it was not definitively terminated until 2005.

23. Danish Business Archives, Tage Vanggaard, serial numbers 100 and 101, Erik Mørk.

24. Danish Business Archives, Tage Vanggaard, serial number 1, ‘Organisationsplan d. 3. December 1974’.

25. Danish Business Archives, Tage Vanggaard, serial number 1, file ‘Organisationsplan’.

26. Danish Business Archives, Tage Vanggaard, serial number 90.

27. Danish Business Archives, Tage Vanggaard, serial number 1, ‘bestyrelsessager’.

28. In 1971, Brandtex was converted to a family owned joint-stock company with Aage Petersen as chairman of the board and Max Petersen as managing director.

29. For the early development of Brandtex, see Leif Poulsen, Industri i Danmark – en introduktion til moderne dansk industri, 1987, (Copenhagen: Gyldendal, 1987), 82ff; John Thøgersen and Ivan Aaen: Rapport om Brandtex, MIKE-projektet, Aalborg Universitet, 1983; Berlingske Tidende 24 April 1982; http://www.btx.dk.

30. Thøgersen and Aaen, Rapport om Brandtex; Frederiksborg Amts Avis, 19 November 1988.

31. Thøgersen and Aaen, Rapport om Brandtex, 8.

32. Textil, 22 January 1982, 9.

33. Thøgersen and Aaen, Rapport om Brandtex, 7.

34. Press release from Brandtex on 24 January 1979 in connection with the introduction of a cutting machine. Press-clipping books from Brandtex.

35. Press-clipping books from Brandtex. Undated cutting from Ekstra Bladet, which must be from the autumn of 1980.

36. BørsensData, 5 May 1985.

37. Business Magazine, European Products and Enterprises, October 1991.

38. The union magazine Stof & Saks no. 4, 1987.

39. Proof sheet from ‘Danish Export’, 8 May 1990. Press-clipping books from Brandtex.

40. Jyllands-Posten, 19 September 1990.

41. See, for example, Vejle Amts Folkeblad, 10 February 1997.

42. By now, Jens Iversen had succeeded Max Petersen as managing director; Petersen had become chairman of the board.

43. Company concept 11 November 1994. Strategy seminar supervised by Kurt Salmon Associates. BTX Group's archives.