Managing Creativity of Shanghai Tang Essay

print pinch was founded by David sea tangle in Hong Kong in 1994. It was a retail store selling high quality product make in China, such as traditional Chinese costumes, Chairman Mao wrist watch, qipao, traditional Chinese silk products with Chinese concept. Its target customers at the first property were those high ended tourists. Taking around 1 year, instead of 2 year which is typical period a naked retailers need to make argumentation in break even, Shanghai Tang turned its first pro setting in October 1995. Shanghai Tang later entered an agreement with the Richemont Group which is a noteworthy Switzerland-based luxury goods maker. David Tang thought Shanghai Tang would become Chinas first international luxury brand.Like other ambitious entrepreneur, in Nov 1997, Tang opened the first Shanghai Tang store on Madison Avenue in New York ground forces. However, things were not going the way it was mantic to. Not many people liked what Shanghai Tang was selling. Unfortunatel y, the financial crisis worsened the situation, and it had to scale down the subscriber line. By 2001, Tang had reduced his stake in Shanghai Tang to near 5%, so the Richemont Group alsok control of the federation. Appointing executive chairman of Shanghai Tang in September 2001, Raphael Le Masne, who wherefore employed a new creative director, Joanne Ooi, having intensive experience in international garment business.With correct insight and vision, shootd to a greater extent in dwelling house designers, and fixed the right directions, they were successfully turning Shanghai Tang around. Image of Chinese-themed high-end room and lifestyle emporium had been established. Sales and globose coverage had been increased a lot from 2001 to 2008. By summer of 2008, accompany had more than 40 stores in 14 countries all over the world. Things will never run smooth, at the aforementioned(prenominal) time, Joanne had handed in her resignation. An increasing conflict within company bet ween creators and commercial departments also gave big headache to Raphael who forever relied on Joanne to smooth things out.During that time, the global financial crisis was striking the whole world economy again, while China, still with double digit increase in GDP e real year, was considered a shelter and gold mine for every business. Shanghai Tang has no exception, but tried to expand its business in China market. 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 can principal(prenominal)tain its success? How the company should adapt its strategy to make it successful in China market and other potential global markets? These were the main challenge Shanghai Tang were facing.AnalysisConflicts between Creativity/Innovation and Business SenseAs a business, the onetime(prenominal) success circumstanceors are eer considered as a critical factor. Business people have a r angeency not to deviate this much in order to maintain the success. On the other hand, it will certainly jeopardize the creativity and innovation from designers particularly it is considered it is too much several(predicate) from the successful factors or past evidences already jump it had not worked out. For creative people, they always tend to be very rationalisey and creative, so they try to make something completely new which is of course totally different than the past.However, like Shanghai Tang, it had experienced a very bad time, and a new design strategy raise 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 turn down 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 success factors may no longer work. The company may be force d to think 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 added in its business.In Shanghai Tang, from design process to the start of mass production, there was heavy involvement from a Product committee which comprise 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 veritable 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 DNA which contains 2 major elements Chinese-ness and the use of bright color.Excellent design but expensive to produce will be eliminated. Designers are also paid a salary positively charged subsidy ba sed on KPI such as its generating revenue and ability to innovate. It can simply observethat there were too much constraints to the design process. likely generating revenue becomes a very important element to determine the success of the new design. New design which is not similar with past success factors is unbelievable 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 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 would 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 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 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 soul of the company which can define the main frame of the products and company direction, it is indeed an urgent matter that they have to hire the new replacement or promote internally.Promoting internally may create con flicts 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 culture, 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 group 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 with the similar taste. Foreigners may be in favour of design wit h 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 genuinely have exposure in China. For the rest, they were foreigner but had certain exposure in eastern fashion industry, not much in China yet.It was prove their design can quite hit the western market with age group 36-45, but it did not imply it will work abruptly in China market an d 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 Chinese Stuff only, but also an icon 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 Mainland China Market.