Thursday, January 24, 2019

Managing Creativity of Shanghai Tang Essay

kidnap zestfulness was founded by David tone in Hong Kong in 1994. It was a sell store selling high pure tone harvest-feast do in china, such as traditional Chinese costumes, Chairman Mao wrist watch, qipao, traditional Chinese silk products with Chinese fig. Its frameate clients at the first-year place were those high shoemakers lasted tourists. Taking approximately 1 year, instead of 2 year which is typical period a pertly retailers need to make business in break even, impress sea tang turned its first profit in October 1995. Shanghai feel later entered an agreement with the Richemont assemblage which is a historied Switzerland-based luxury goods maker. David smell thought Shanghai zestfulness would become chinawares first international luxury brand.Like another(prenominal)(prenominal) ambitious entrepreneur, in Nov 1997, spirit opened the first Shanghai Tang store on capital of Wisconsin Avenue in New York USA. However, things were not vent the way it was hypothetical to. Not many people liked what Shanghai Tang was selling. Unfortunately, the fiscal crisis worsened the situation, and it had to scale down the business. By 2001, Tang had reduced his take a chance in Shanghai Tang to near 5%, so the Richemont Group to a faultk control of the company. Appointing executive chairman of Shanghai Tang in kinsfolk 2001, Raphael Le Masne, who whence employed a new creative director, Joanne Ooi, having intensive scram in international garment business.With correct insight and vision, employ much than than in house material bodyers, and fixed the right directions, they were sure-firely tour Shanghai Tang around. Image of Chinese-themed high-end counterfeit and lifestyle emporium had been established. sales and global coerage had been appendd a lot from 2001 to 2008. By spend of 2008, company had more than 40 stores in 14 countries all over the world. Things pass on never run smooth, at the same time, Joanne had handed in her resignation. An increasing conflict within company in the midst of creators and commercial departments withal gave big headache to Raphael who always relied on Joanne to smooth things out.During that time, the global financial crisis was striking the whole world providence again, while China, still with divalent digit increase in GDP every year, was considered a provide and gold mine for every business. Shanghai Tang has no exception, unless tried to expand its business in China market. Should Shanghai Tang hire a new creative director under this diffident economic time? How to strike a balance between creativeness and the profit? How the company can maintain its success? How the company should alter its strategy to make it successful in China market and other potential global markets? These were the main challenge Shanghai Tang were facing. analytic thinkingConflicts between Creativity/Innovation and Business SenseAs a business, the past success factors argon always considered as a lively factor. Business people have a tendency not to crook this some(prenominal) in order to maintain the success. On the other hand, it go forth certainly jeopardize the creativity and innovation from designers especially it is considered it is too much incompatible from the successful factors or past evidences already prove it had not worked out. For creative people, they always tend to be very trendy and creative, so they try to make something comp allowely new which is of course completely different than the past.However, like Shanghai Tang, it had experienced a very bad time, and a new design strategy set by Le Masne and Ooi, had made the company turn around. It just likes an endless cycle company having a success factor, makes itself become successful in terms of profit and image, then it will resist to change and the success may last for another couple of years. At the end, with emerge of new competitors, change in economy or whatever reason, past succ ess factors may no longish work. The company may be forced to think deeply in creativity and business innovation, but it is always too late. A truly successful company must be able to continue its success factors, but new elements must always be needed to be added in its business.In Shanghai Tang, from design process to the start of clutch production, there was heavy involvement from a Product Committee which play the designers, executive chairman, the creative director and key business managers like retail /marketing/ merchandizing directors. To help designers to understand how different products perform in the market, they certain reports from the retail and marketing departments regularly. Those reports mainly revealed the sales and node feedback to different items. Designers similarly had to follow the company norm Shanghai Tang DNA which contains 2 major elements Chinese-ness and the use of bright color.Excellent design but expensive to produce will be perishd. Designe rs are besides paid a salary plus bonus based on KPI such as its generating revenue and ability to innovate. It can simply observe that there were too much constraints to the design process. Potential generating revenue becomes a very Copernican element to determine the success of the new design. New design which is not similar with past success factors is unlikely to survive.The consequence is that it will eliminate some new elements which make the company even successful in future. Shanghai Tang has 2 main business streams core accrual and seasonal collection, which about 50/50 in terms of revenue. In fact, for its seasonal collection, extra room should be given to the design teams, and more deviation from Shanghai Tang DNA should be allowed. It can let the company to test the water temperature in the market and to get more insight how the market is changing. It would not impact to its core business. Shanghai Tang could even think of the 3rd stream which more innovation w ould be allowed.The bonus scheme for designers would also be linked to the recognition of their design. The Shanghai Tang DNA should be reviewed from time to time to keep railyard with the market trend to make sure the new fashion elements will be captured. Thus, those designers will be motivated and encourage to participate in the theme of their design. As Shanghai Tang is a high end fashioned product, it should not be limited to high manufacturing cost as well. Margin can be set higher for products with nice design but higher manufacturing cost. Replacement of seminal DirectorOoi was going to transmit Shanghai Tang, but the global economy was in the tough situation. Le Masne was in a dilemma to hire a new deputy or let the whole team to continue the work. Considering the fact that the Creative Director is the soul of the company which can dress the main corpse of the products and company direction, it is indeed an urgent matter that they have to hire the new electric switch or promote internally.Promoting internally may create conflicts inside the team, and it doesnt add any new element to the team. Unless there is mortal very outstanding, Shanghai Tang could look for a contendnt replacement externally. Working a whole team without leader is not going to work especially there are too much conflicts between the design and commercial teams and no one is able to resolve it. Expanding China MarketShanghai Tang had around 10 shops in China. It also had 9 shops in Hong Kongwhich can be considered crossover between easterly and western culture, not pure Chinese taste. The Chinese society accounted totally half of its total shops all over the world. However, looking deeply to its node profiles, its major customer assemblage was still USA and Europe. The Chinese customer in mainland China market was just over 50%. American and European might be in favour of existing product design in Shanghai Tang.However, it doesnt imply that the Chinese customers are wi th the similar taste. Foreigners may be in favour of design with fashion and absolute Chinese styled, but Chinese may desire the design with mix of Chinese and Western style, and do not want it to be too Chinese. They may be even reluctant to accept the goods make in China, as there was a trend ladened people tend to buy foreign luxary brand. Shanghai Tang had experience that different culture may have different taste. Design had to be fine tuned somehow to fit different culture.In terms of customer age group, excluding Mainland China market, the target age group was those between 36 to 45. However, in China market, theres also 40% of customer from age group 26-35. Among the 7 key in house designers in Shanghai Tang, though 3 of them were Chinese, they did not really have characterization in China. For the rest, they were foreigner but had certain exposure in easterly fashion industry, not much in China yet.It was proven their design can quite hit the western market with age group 36-45, but it did not imply it will work perfectly in China market and younger age group. It is advisable that Shanghai Tang should conduct a thorough research in China to define the Chinese taste. Moreover, they should also stimulate in some designers with Mainland Chinese exposure. They should also add in innovation elements into the business in order to compete the market shares in China.Jacket in Chinese, skirt in more western may not work for US/European customers, but it may work perfectly in China market. Using the famous western celebrities to promote its brand in China may increase its awareness effectively. Chinese may not perceive Shanghai Tang as Real Chinese Stuff only, but also an motion-picture show of western fashion. ConclusionThough Shanghai Tang had been quite successful in the past years, it cannot simply stick to it. It has to keep its creativity and innovation, and bring new elements to the company. Thorough preparation is essential for its battle in Mainlan d China Market.

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