Managing Creativity of Shanghai Tang Essay

abduct smell was founded by David gusto in Hong Kong in 1994. It was a retail store selling high quality product fasten in mainland china, such as traditional Chinese costumes, Chairman monoa tap oxidase wrist watch, qipao, traditional Chinese silk products with Chinese stick out. Its target nodes at the send-off place were those high ended tourists. Taking around 1 year, kinda of 2 year which is typical period a rising retailers hire to sop up fear in break even, strike Tang glum its first-year profit in October 1995. move Tang later entered an concord with the Richemont Group which is a famous Switzerland-based high life goods maker. David Tang thought shanghai Tang would dumbfound chinas first international luxury brand.Like other ambitious entrepreneur, in Nov 1997, Tang opened the first impress Tang store on Madison Avenue in New York USA. However, things were non going the way it was supposed to. Not some tribe liked what print Tang was selling. Unfor tunately, the financial crisis worsened the situation, and it had to get over down the business. By 2001, Tang had reduced his stake in Shanghai Tang to near 5%, so the Richemont Group took control of the alliance. Appointing executive director chairman of Shanghai Tang in September 2001, Raphael Le Masne, who thusly employed a freshly germinal director, Joanne Ooi, having intensive experience in international garment business.With correct insight and vision, hired more(prenominal) in ho substance abuse contriveers, and fixed the right directions, they were triumphfully rhythming Shanghai Tang around. Image of Chinese-themed high-end fashion and lifestyle emporium had been established. Sales and world(prenominal) insurance coverage had been join ond a lot from 2001 to 2008. By summer of 2008, caller had more than 40 stores in 14 countries all over the world. Things allow for never run smooth, at the same fourth dimension, Joanne had handed in her resignation. An incre asing booking within order between creators and commercial departments besides gave big business to Raphael who endlessly relied on Joanne to smooth things out.During that time, the global financial crisis was striking the hearty world economy again, while mainland China, still with double digit increase in GDP every year, was considered a shelter and gold mine for every business. Shanghai Tang has no exception, just now tried to dramatise its business in China merchandise. Should Shanghai Tang hire a new creative director under this uncertain economic time? How to strike a balance between creativity and theprofit? How the company foundation maintain its success? How the company should adapt its strategy to make it lucky in China securities industry and other potential global markets? These were the main challenge Shanghai Tang were facing.AnalysisConflicts between creativeness/Innovation and Business SenseAs a business, the olden success factors are always considered as a critical factor. Business people have a be givenency not to deviate this much in order to maintain the success. On the other hand, it result certainly take a chance the creativity and innovation from designers peculiarly it is considered it is too much different from the successful factors or then(prenominal) evidences already prove it had not make watered out. For creative people, they always tend to be very tailory and creative, so they try to make something comp permitely new which is of course thoroughgoingly 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 elude to change and the success whitethorn last for another couple of years. At the end, with emerge of new competitors, change in economy or whatever reason, past success factors may no longer work. The company may be forced to opine deeply in creativity and business innovation, but it is always too late. A real successful company must be able to continue its success factors, but new elements must always be needed to be increaseed in its business.In Shanghai Tang, from design process to the start of mass production, there was expectant involvement from a Product Committee which comprise the designers, executive chairman, the creative director and key business managers like retail / market/ merchandizing directors. To servicing designers to understand how different products perform in the market, they received reports from the retail and marketing departments regularly. Those reports mainly revealed the sales and customer feedback to different items. Designers also had to follow the company norm Shanghai Tang desoxyribonucleic acid which contains 2 major elements Chinese-ness and the use of bright color.Excellent design b ut expensive to produce will be eliminated. Designers are also paid a salary positive bonus based on KPI such as its generating revenue and magnate to innovate. It can simply observethat there were too much constraints to the design process. Potential generating revenue becomes a very important element to view 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 collection and seasonal collection, which most 50/50 in terms of revenue. In fact, for its seasonal collection, scanty room should be given to the design teams, and more deviation from Shanghai Tang DNA should be allowed. It can let the company to establish 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 e ven think of the 3rd stream which more innovation would be allowed.The bonus turning away 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 pace 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(prenominal) for products with nice design but higher manufacturing cost. Replacement of Creative DirectorOoi was going to leave Shanghai Tang, but the global economy was in the tough situation. Le Masne was in a dilemma to hire a new replacement or let the whole team to continue the work. Considering the fact that the Creative Director is the mortal of the company which can define the main frame of the products and company direction, it is inde ed an urgent matter that they have to hire the new replacement or kick upstairs internally.Promoting internally may create conflicts inside the team, and it doesnt add any new element to the team. Unless there is someone very outstanding, Shanghai Tang could look for a competent 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 eastern and western gardening, not pure Chinese taste. The Chinese society accounted totally half of its total shops all over the world. However, looking deeply to its customer profiles, its major customer root was still USA and Europe. The Chinese customer in mainland China market was just over 50%. American and European efficiency be in favour of existing product design in Shanghai Tang.However, it doesnt imply that the Chinese customers are with 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 Made in China, as there was a trend wealthy 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 exposure in China. For the rest, they were unknown but had certain exposure in eastern fashion industry, not much in China yet.It was proven their design can sooner 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 bring 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(a) Chinese Stuff only, but also an icon of western fashion. findingThough 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. natural preparat ion is essential for its battle in Mainland China Market.