Esquel Group: A Vertically Integrated Apparel Manufacturer

Esquel Group is one of the world’s leading producers of premium cotton shirts, and among the most dynamic and progressive global-scale textile and apparel manufacturers. The company was founded in 1978 in Hong Kong. Over the years Esquel, which was part of an old-fashioned industry, gradually grew to become a larger and more modern organization: it expanded its product offering as well as scope of operations, adding to garment manufacturing the production of woven and knitted fabric, spinning operations, and eventually cotton ginning and farming; it opened manufacturing facilities outside China and multiple representative offices in the U.S., the U.K. and Japan; it developed strong product development capabilities and expanded its service offering to its customers; it invested in supporting IT and supply chain management applications and applied advance RFID solutions to improve efficiency of internal operations. In parallel, a strong corporate culture was established, emphasizing ethical business practices, creativity, and continual improvement. All these initiatives provided Esquel with the means to offer high-quality, innovative products and services, and to secure a loyal customer base of some of the world’s best known and most highly respected brands. While striving to run a successful business, Esquel also took multiple steps to ensure the well-being of its employees and to have a positive impact on society, and was devoted to protecting the environment in areas where it operated. The case describes in detail the transformations the company has gone through over the years, and the uniqueness of its corporate culture, and product and service offering. In addition, the case discusses the pros and cons of Esquel’s strategy, and provides some perspective about the future of the company (e.g., what steps it should take to meet its growth targets; how will the elimination of quota restrictions impact Esquel; etc.).