Managing Creativity at Shanghai Tang
Background
Shanghai Tang was founded by David Tang in Hong Kong in 1994. It was a retail store selling high quality product made in China, such as traditional Chinese costumes, Chairman Mao wrist watch, qipao, traditional Chinese silk products with Chinese design. Its target customers at the first place were those high ended tourists. Taking around 1 year, instead of 2 year which is typical period a new retailers need to make business in break even, Shanghai Tang turned its first profit in October 1995.
Shanghai Tang later entered an agreement with the Richemont Group which is a famous Switzerland-based luxury goods maker. David Tang thought Shanghai Tang would become China’s first international…show more content… 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 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 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 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 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 important element to determine the success of the new design. New design which is not similar with past success
