Design Management Project American Apparel: Introduction There are five major design elements, performance, quality, durability, appearance and cost. The purpose of design is to optimise customer satisfaction and the profitability of a company by creatively coordinating these five elements in coherence with the company’s products, environments, information, and corporate identity, thus, connecting the company with the consumer by creating products and services which appeal to the consumers needs.
Design is not solely the shape, dimensions, or purpose of the product; it is the decision-making process that deals with the culmination of the appearance of objects, taking into consideration the economy, technical function, and making sure it meets consumer demand. There are six different areas of design within an organisation; design in products and services, marketing, team, business operations, strategy, and finance; •Design in products and services involve trying to differentiate companies’ products from their competitors with the use of style, innovation and performance. Design in marketing involves obtaining information on sales growth, competitors and future trends to allow the company to decipher any potential threats to the business which could make their products or development of any new product, obsolete. •The design management team needs to work out if they have the relevant resources within the company to design, or whether they need to outsource design skills. •Design in business operations involves using external resources to limit costs, risk, and improve quality. •Design processes and resources available to the business must be considered as this can play a vital role in the business strategy. Design needs to be considered by any finance department; unfortunately design has to be a cost before the business can see any possible profit from the end product. Therefore the design service used would need the projected financial costs and benefits to be warranted by both the design and finance departments equally. Design is the fundamental backbone of any business whether it is a good or a service. This is because without design there would be no product, and thus, no foundation for any business to operate. “It is the principal reason for emotional attachment (or detachment) relative to a product, service or experience. – Tom Peters, Re-imagine! Business Excellence in a Disruptive Age. In this Book, Tom Peters devotes several chapters to the importance of “design” in achieving business success. He stresses that it is not continuous, incremental improvement, organizational excellence or strategic planning, but design that leads to a businesses success. He mentions a number of different companies including quoting Apple’s CEO Steve Jobs in saying that design is the “fundamental soul of a man-made creation. ” He also talks about how Ferrari uses design to “help customers become what they want to be. The ‘Double Diamond’ Design Process Model The first design model was developed at the Design Council in 2005 as a fairly simple graphical way of describing the design process: The model is separated into four quarters, Discover, Define, Develop, and Deliver. It shows the divergent and convergent stages of the design process, displaying the different modes of thinking that designers use. The first quarter is: Discover Discovering is the first part of any design process. This begins with an initial idea or inspiration, often sourced from a discovery phase.
The discovery phase acts as a thinking process where the designers and other project team members view all the angles of the project/idea and make sure that all user needs are identified. These include: Market research, user research, managing information, and design research groups. Define The second quarter of the double diamond model corresponds to the definition stage. The definition stage is where all of the findings from the discovery stage are analyzed and listed in a brief along with the action that needs to be taken relating to a new or existing product development.
This stage will end with a clear definition of problems and a plan of how to address them. Key activities during the define stage are: Project development, project management, and project sign-off. Develop The third quarter indicates a period of development where design-led all of solutions to the problems found in the discovery stage are developed, repeated and tested within the company. The objectives during the develop stage are: Multi-disciplinary working, visual management, development methods, and testing. Deliver
The final quarter of the double diamond model is the delivery stage, where the resulting product or service is finalized and launched in the relevant market. The delivery stage also provides feedback for future projects i. e. problems that delayed the project could be recognized and avoided in future projects. The key activities and objectives during this stage are: Final testing, approval, launch, targets, evaluation, and feedback loops. Design Management Design management involves the core functions of the management process and directly links them to the process of innovation and design.
Businesses are facing an increasingly competitive market place with new innovations and technologies appearing all of the time. Therefore, design is a good way to differentiate the product from a competitor by making it more aesthetically pleasing and more functionally effective. Cooper (1997) suggested that there were the 3P’s of design management: •Patience, in order to convince others of the design value. •Persistence, to be able to encourage recognition of ideas by others in the firm or the client. •Persuasion, to inspire others with your vision.
Design involves careful identification of customer needs and scrupulous translation of those needs into manufacture. There are many different customers of the design whose needs must be met; however, their needs are often conflicting. Decisions between conflicting sections of the design process must be made, often with insufficient information and under pressure from the budget and schedule. Many design decisions are commonly autonomous, which makes management of work flow among the various sectors especially important and difficult.
Early design stages are extremely hard to process and evaluate in terms of their progress. With the lack of physical products and having to rely on information such as drawings it becomes very difficult to gauge the amount of time needed to complete any given stage of the process. Additionally, projects are becoming more and more subject to uncertainty due to the fast pace of technological change, changing of market opportunities, and the inability to keep up with the pressure to reduce time and costs. Brand design management model CORPORATE CULTURE AND DESIGN ORIENTATION Concept Generation
Spatial Design Product Design Implementation BRAND EXPERIENCE Design Strategy Brand Design Communication Design Resources Design is one of the sub-processes within the innovation process. It influences innovation on a strategic, and an operational level. The innovation strategy is configured by four main activities: 1) Concept generation, which consists of the collection of internal and external information and stimuli in order to develop a potential offering design strategy 2) Design strategy, which includes defining the activities necessary for perfecting the potential offering resource procurement. ) Resource procurement, during which the team tries to assemble all of the external and internal resources necessary for realising the design process and implementation of the strategy. 4) Implementation of the strategy. The design orientation of the firm frames all of these activities. They have adapted their brand design management model in order to make it more inclusive, to include product design, space, communication, and brand design. It is critical for the management of the firm to be involved in design management as it is critical to managing the design process in an efficient manner.
This is because it makes no sense to start a newer design with little or no relationship to the business strategy. A design-oriented company would always realise the potential for improving the new product development process and improving financial performance by correctly managing the design. Creativity One of the key factors needed to enable the process of design and to be considered during design management is creativity. Creativity is the ability to bring something into existence, whether it is a new idea, a solution to a problem, or bringing something from an artistic form (design) into a physical form (product).
Creativity is the starting point for innovation and thus, innovation is the product of creative inspiration. Four separate factors implemented in some way within creativity, invention, innovation, diffusion and design. Invention is something new which has not be thought of before which flourishes from the creative mind of an individual. Innovation is defined as commercial introduction (introduction to the market) or adoption into use. Diffusion is the adoption of the invention my mass individuals, this could be consumers or other designers, i. e.
James Dysons invention for the bag-less vacuum cleaner was not only sold to nearly every home owner in the country, but other competing companies also used this technology in their products, and the technology has also been used in other products such as the hand dryer. Design is involved as it is an ongoing process that endeavours to improve and update the original invention/innovation. People become more creative due to passion and interest; not from external pressures. Creativity must come from a certain amount of freedom to think, but not too much because ideas may become nonsensical.
By definition there are two types of thinking, analytical and creative. Analytical can be defined as logical thinking that may be quite predictable and also it involves thinking vertically with a structure. Creative thinking is imaginative and unpredictable, creative thinking also allows people to think laterally `out of the box’ as it were. In industry both of these are used, analytical is used more in correspondence with a solution to a problem or a development on an existing innovation/invention.
Creative is used more to create an innovation/invention and to come up with ideas that have not been thought of before. Within every individual, creativity is a function of three components: 1. Expertise 2. Creative thinking skills 3. Motivation. Expertise is everything an individual can do within their field and within their work- knowledge. Creative thinking refers to how problems are approached and how the solution is gained. Expertise and creative thinking are the raw materials of creativity. Motivation is the drive to do something which is fuelled by an interest in the task.
When a person is intrinsically motivated they will progress much faster because they get much more enjoyment out of it. People will be most creative when they feel motivated principally by the interest, satisfaction and the challenge in the work. `Creativity, according to Robert Gahim, consists of anticipation and commitment. Anticipation involves having a vision of something that will become important in the future before anybody else has it. Commitment is the belief that keeps one working to realize the vision despite doubt and discouragement. ‘ – S.
Ahire, P. Dreyfus (2000) Creative outcomes do not emerge instantaneously, it takes time. It begins with either the recognition of a problem or anticipating an opportunity. Then after understanding and reflecting upon the issues, new ideas are formed and from this, emerges solutions or possibilities that are assessed, until a genuinely new development becomes apparent. Problem Preparation Idea Generation Idea evaluation Generic Creative Process Model The creative process is a process essentially internal to an individual by which ideas are generated.
The model above is one of the earliest and simplest creative process models showing how the three stages; problem preparation, idea generation, and idea evaluation all co-inside to form the creative process. However a more commonly used model is Lawson’s five-stage Model of the creative process: First Recognizing that a problem exists, and determining to tackle it. Insight Preparation Attempts to understand the problem and to produce solutions. Incubation Periods of relaxation allowing subconscious thought. Illumination Sudden emergence of the idea (The act of insight or “creative leap”).
Verification Co Conscious development and testing of the idea into workable solution. The first insight/identifying is a key step for the start of the creative/innovation process. Some examples of this would be where curiosity drives people to look for applications of certain scientific or technical principles such as Cockerell and air-cushion transport or when people identify an unsolved need, such as Percy Shaw and unlit roads. Sometimes people identify a need with an unsatisfactory current solution, such as James Dyson and his dissatisfaction with conventional wheelbarrows, thus, changing the wheel to a ball.
The next period preparation involves attempting to understand and analyse the problems with the first insight and trying to produce a solution. This could be a short process or it could take years and involve a comprehensive search for information, experimenting with different designs. The reason the arrows between the first insight and preparation go directly between the two is that after preparation it may become apparent that the first insight is not plausible, thus having to revert back to the first insight.
Incubation is a period after the inventor has been working on a certain problem for quite some time and is now not giving it much conscious attention i. e. the problem and its solution have been put to one side. During this time, according to Roy (Open University, 2004, p. 34), `the relaxed brain is repatterning information absorbed during the period of preparation often after receiving a new piece of information that is perceived as relevant’. What Roy means about repatterning the brain is that a new piece of information can cause a new link between the problem and solution to be made and therefore, a new insight is achieved.
Although it’s not often possible to show how incubation takes place, there are many examples of inventors doing something unrelated to their invention when a breakthrough to a solution to the previous problem is solved. Insight suggests to the inventor that a solution might have been found. Acts of insight are not only dependent upon the state of mind of the inventor, but also within the circumstances in which they occur. Once a solution is determined it is then necessary to explore the extent to which it ffectively solves the problem and where it is needed to act upon it. More attention appears to be given during moments of inspiration however this is not the case, the process of critical revision is usually the longest, most difficult and most costly stage. American Apparel: A Company Overview `At American Apparel our true inspirations for the “perfect fit” are ordinary people and their landscapes. ‘-www. americanapperel. com American Apparel is the largest clothing manufacturer in the United States.
It is also a large wholesaler, a retailer that has a range of its own designs, and performs its own advertising and marketing. Its is mainly acknowledged for its basic cotton knitwear such as t-shirts and hoodies, but in recent years it has expanded its range to include dresses, vintage clothing, denim, leotards, tank tops, leggings, bedding and accessories for men, women, children, babies and even dogs. American Apparel was founded in 1989 by Dov Charney, a Canadian who had a long history with t-shirts and an interest in American culture.
It was during Charney’s first year at university that the company’s name was born and he began to experiment with screen printing, importation, and other parts of the clothing business. In 1997 the company moved to Los Angeles where Charney began to sub-contract sewing with Sam Lim who had a shop with 50 workers under the Interstate 10 freeway in LA. This then encouraged the two of them to become partners. In 2000 American Apparel moved into its current factory in downtown Los Angeles where it grew primarily as a wholesale business, selling blank t-shirts to screen printers, uniforms for company’s employees, and to merchandisers.
After all of its accomplishments as a wholesale brand, the company moved into the retail market and became one of the fastest growing companies in the United States, with a 440% three-year growth and revenues in 2005 of over $211 million. It is also one of the few clothing companies exporting ‘Made in the USA’ goods and in 2007 sold about $125 million dollars of domestically manufactured clothing outside of America. The company also promotes a number of progressive policies including immigrant rights and labour policies the company dubs “sweatshop free.
American Apparel began as a wholesaler brand in 1990 by selling high-quality t-shirts to screen-printers and boutiques under the American HEAVY label. Although it has made its transition into mainly a retail brand, the company is still one of the largest wholesalers in the country, selling a large amount of their products too band merchandisers. Additionally, they sell to `People for the Ethical Treatment of Animals’, the animal rights advocacy group, to print all of its merchandise on American Apparel products cue to the fact they are made domestically and are animal-free.
The company at present is primarily a retail brand however; it has over 200 stores worldwide in 18 different countries including South Korea and Israel, With planned store openings in Iceland, Ireland, Belgium, Hawaii, Spain, and China The company’s expansion into retail was the fastest retail roll out in American history. All of their stores are marketed and designed individually rather than homogeneously. Store designs are often slightly bare with relatively low start up costs; between $100,000 and $400,000 to develop. The company tends to reject, high rent locations and generally avoids retailing in shopping centres.
The stores are often sites for urban renewal as the company looks for low-rent but high traffic locations i. e. University towns. In some stores, the decor features `Penthouse’ covers from 1970s and 1980s which has undergone a high level of criticism. When scouting for locations, it considers urban areas that can be revitalized. In some cases, the company sublets parts of retail locations to other businesses from their market demographic, bringing additional retailers to previously unoccupied space, and thus bringing more customers to the area.
However most of their retail outlets are in New York City and California. They also have a website AmericanApparel. net. It is included in the internet retailer 500 index, and receives 1. 5 million visitors per month. Online sales grew from $13. 3 million in 2006 to $29. 3 million in 2007. American Apparel manufactures all of its products in an 800,000-square-foot (74,000 m2) factory in Los Angeles. The company also owns and operates its own fabric dye house, garment dye house, and knitting facility, all based in Los Angeles.
They do not outsource their labour which is ultimately the USP of their company, and pay all their factory workers an average of over $12 dollars an hour. Garment workers for similar American companies in China earn approximately 40 cents per hour. Employees receive benefits such as paid time off, health care, company-subsidized lunches, bus passes, free English as an additional language classes, on-site massage therapists, free bicycles and on-site bike mechanics, free parking in addition to the proper lighting and ventilation.
Every floor of the factory has free telephones where workers can take and receive long distance phone calls (good for immigrants). The company’s employees in other countries do not receive the same hourly rate as the employees in Los Angeles. However, employees in China will earn the US minimum wage. The plant also grants employees roughly 1 share of stock for every workday they have spent at the company. Approximately 4,000 of the company’s employees are eligible for the program. They use “team manufacturing” which groups the most able employees towards the highest priority orders.
Each team functions individually and determines its own daily production schedule, giving them control over their own hourly wages. After team manufacturing was introduced, garment production was tripled and required a less than 20% staff increase. The factory claims to have the capacity to produce 1 million shirts per week and manufacture 275,000 pieces a day. The production system of American Apparel centralizes most of its employees in a single location. By not outsourcing, Charney believes that he knows his workers better and that it ties them directly to the brand.
A banner on top of the downtown factory states “American Apparel is an Industrial Revolution. ” American Apparel designs, creates and prints its own advertisements. They are widely known for their provocative and controversial advertising campaigns, which is largely the inspiration of Dov Charney. Their print campaigns are widely considered to be some of the best in the industry. The sexually charged advertising has been criticized, but has also been applauded for its honesty and non use of airbrushing.
American Apparel images often display subjects with their blemishes, imperfections and asymmetrical features highlighted and attached with brief, personal descriptions. Many of the models in American Apparel’s advertising are sourced either from the street, in- store customers, or potential models sending their photo’s into the website. The company has also used adult actresses in some of its advertisements. Some of the company’s other ads, which feature nudity or sexual themes, have been banned by various advertising authorities.
For a while American Apparel promoted a branding strategy that spotlighted the treatment of workers as a selling point for the company’s merchandise, promoting the goods as “sweatshop free. ” In 2008, the company took out a series of political ads featuring the corporate logo that called current immigration laws an “apartheid system. ” In 2005 the company was named “Marketer of the Year” at the LA Fashion Awards. `American Apparel is geared to appeal to the ideal trend-starting shoppers Charney calls “young metropolitan adults” – including the company’s sweatshop-free manufacturing ethic. – American Apparel Exposed- Who’s Your Daddy? – J. Straub- Autumn 2006. This statement from Charney sums up American Apparel’s target market rather well. `Young metropolitan adults’ means that there target market is ranged from about 14-30, consisting of fashion conscious, ethically thinking young adults. Indeed it is a slightly niche market, this type of clothing could be bought more cheaply from any other high street retailer, but their customers may choose to pay the slightly higher prices here due to the ethical nature of production.
However it can be argued that their market is much boarder than this due to their wholesale activities; selling to merchandisers etc. SWOT Analysis Strengths •Loyal Customer Base •High Quality Manufacturing •Ethical •Profitable •Stylish •Global Business •Fast lead times(due to manufacture being sourced in the US •Wholesale Weaknesses •Expensive (easily undercut by other high street retailers) •The range is not too broad, simple designs etc. •Expensive labour costs. Opportunities •New stores opening globally. Fast fashion becoming ever more prominent within our culture. •Ethical buying habits are on the rise. Threats •Constant bad press and law suits could damage the company’s image. •Competitors being able to source every cheaper labour and materials. •Competitors having more elaborate designs. •Recession costs The SWOT analysis shows that the companies’ strengths completely outweigh the weaknesses which is always a positive situation for any company to find themselves in. However there are significant threats to the company that could potentially become weaknesses.
American apparel will need to engage with the potential threats and deal with them; this may be difficult due to the threats being mainly against their company policy, or outside of their control. They need to try to remain an individual company which keeps their USP; this will inevitably help them to keep their title as the US’s largest clothing manufacturer. Porters Five Forces Porter’s Five Forces Analysis is a tool used for assessing the potential for profitability within any given industry.
It works by looking at the strength of five important forces that affect competition: •Supplier Power -The power of suppliers to drive up the prices of your inputs •Buyer Power: The power of your customers to drive down your prices •Competitive Rivalry: The strength of competition in the industry •The Threat of Substitution: The extent to which different products and services can be used in place of your own and •The Threat of New Entry: The ease with which new competitors can enter the market if they see that you are making good profits (and then drive your prices down).
By thinking through how each force affects a company, and by identifying the strength and direction of each force, the firm can quickly assess the strength of the position and your ability to make a sustained profit in the industry. Competitors for American Apparel Being a high street fashion brand American Apparel is bound to have plenty of competitors both nationally and globally. Their main competitor for the UK and the US is undoubtedly Urban Outfitters. Urban Outfitters has the same target market and offer their clothing for roughly the same price.
Urban outfitters also have a much larger range of products spanning into home wear, novelty games, and gifts. However there are vast differences in the two companies, Urban Outfitters do not have the same ethical policy as American Apparel. Therefore the cheaper labour twinned with the fact that Urban Outfitters has been established 20 years longer, means that Urban outfitters in fact sees higher profit margins as they are selling at the same price but are manufacturing at a much lower costs. This is evident by just the sheer size difference between the retail outlets.
Most Urban Outfitters stores are in fact roughly three times the size of most American Apparel stores usually spanning across three floors, this is also accountable to the fact that they have a much larger product range. However American Apparel has 60 more shops globally and is available in different countries. According to the February 2009 Same Store Sales Figures: Complete List of U. S. Retail Industry by Barbara Farfan, Urban Outfitters had an increase of +3% and American Apparel were down -9%. Recent Launch One of the latest updates to the ever expanding product range at American Apparel is quite an innovative one.
On August 24th 2009, American Apparel launched a new product to their range called the `Bag-O-Scraps. ‘ This product is exactly how it sounds, it is a bag of factory off cuttings for a price of $8. 00USD, and effectively they are selling waste as a product. “Collected cuttings from some of your favorite fun fabrics from around the American Apparel factory to make one-of-a-kind bags of scrap fabrics. Use them for all sorts of arts and crafts. Make clever jewelry, accessories, a card for your grandma or a colorful hanging sculpture for your apartment.
Each bag comes with a zine (printed on scrap paper, of course) with five fun and easy scrap projects, complete with how-to instructions. ”-www. americanapparel. com This cutting edge innovation literally takes the design out of the manufactures hands and into the consumers. It is also one of the most simple product ideas on the market, it not only cuts waste costs but creates a new source of income from what otherwise would have been discarded. It can be argued that this product is over priced; the fabrics in the bag are not expensive ones and can be bought for $2-3. 0 a yard at most fabric stores and are around the same size as a fabric swatch from any fabric store which is free. However they are cornering the market in high street fashion as no other high street fashion retailer offers this kind of product. They can also offer this product because American Apparel has designs which stand out and are unique fabrics to their particular range, meaning that if they don’t make the product the customer desires in their favourite fabric, then the customer can make their own, thus meeting more customer needs and thus selling more of their other roducts due to customer satisfaction Strengths •No Competition from competitors offering this product. •Cost effective •Environmentally friendly •Allows consumers to make products which are not available in certain fabrics. •One-of-a-kind Weaknesses •Over priced •Not all packs are same (customers could become dissatisfied. Opportunities •It can potentially be seen as an innovation feat and other companies may follow in order to be ethical. Therefore American Apparel could become pioneers of a potential change as to how waste materials are disposed of.
Threats •Their styles could become mimicked and they could use their authenticity. •Competitors may copy. As is shown in the SWOT analysis this `Bag-O-Scraps’ innovation has some major strengths and opportunities, heavily outweighing the weaknesses and threats. The simple concept of selling waste as a product could not hinder the company a great deal as if they did not sell it then it would just be thrown away. Thus, a proposed model for this product would simply be to add an extra stage to the double design process theory model: Discover Define Develop Deliver Previous collected waste Waste Collection
The New stage can be seen after the development stage but before the delivery process. The waste must also be gathered over time in order to get different fabrics from different design processes. This would have been collected and stored at the same time in the process as shown in the model. The waste will be collected after the development stage; this is obviously when all the waste materials will become apparent because this is when manufacture occurs. Then this will join previous waste to become the `Bag-O-Scraps’ and join the other garment from the original design process in the delivery stage.
This process will obviously be a continuous loop through various different projects. Some key issues with this product would most likely be the amount of criticism it receives within the fashion world. The product has come across as American Apparel trying to make money in anyway they can by selling their off cuts which are considered waste to most designers/manufactures as they are rendered useless in garment manufacture. However the idea is far cleverer than the critics would like to believe. Yes, essentially they are making money out of off cuts and waste, but there is no reason why they should not.
American Apparel is a large global retailer with designs and fabrics that are immediately recognisable to their name, therefore if people like the fabrics and they don’t want to have to go and source small amounts from Mexico and buy it by the yard, then they can go to there local store and source it from there. New Innovation for American Apparel An innovation is widely regarded as doing something new, however it does not have to be a completely new invention, it just has to be something that the company has not done before, and this can be a new way of thinking, a new line, or even updating an original product.
Currently American Apparel does not manufacture any organic products other than T-shirts. A large sector in the fashion retail market that does not carry many organic products is shoes. Therefore, American Apparel should manufacture shoes made organically. This would be fairly easy to do as they could source organic fair-trade cotton from India which keeps their ethical trading policy and ensures that the farmers are getting the correct price. Any leather can be sourced from free range/ organically farmed cows, and any rubber needed can be sourced from organically grown rubber trees.
This can thus be extended into a range of different organic shoes, American Apparel have a rather weak range of shoes as it is with only a few designs and some being unisex. Therefore this organic shoe range could have the potential to become their main range of shoes which could be a real USP for the company. In order for American Apparel to proceed with this innovation they will need to produce a new product development strategy. New product development (NPD) involves 7 key stages; idea generation (innovation), product screening, concept testing, business and financial analysis, product development, test marketing, and commercialisation.
Idea generation is similar to innovation. It involves defining sources of new ideas and generating them. There are several different analysis procedures which American Apparel can use in order to achieve idea generation; there can be a dimensional analysis which lists all of the physical characteristics of a product type. When this list is obtained creativity is then allowed to happen. Problem analysis is a need assessment technique designed to acknowledge consumer problems in a particular category to serve as a new basis for new product or service ideas.
Benefit structure analysis determines what specific benefits and characteristics are desired by consumers within a particular category and then determines imperfections in the product or service that is currently provided. A scenario analysis identifies opportunities by exploiting projected future environments and associated consumer needs. Product screening occurs after the firm identifies potential products. During product screening, poor, unsuitable, or otherwise unattractive ideas are taken out from further actions. Nowadays most companies use a new product checklist for preliminary evaluation.
Within this list the new product attributes are listed and the firm will evaluate and compare each idea with those attributes, the checklist then becomes standardised and allows all of the ideas to be compared. Concept testing presents the potential consumer with a proposed product and measures attitudes towards the product at early stages of the development. It is a quick and inexpensive way of measuring consumer enthusiasm and likeability towards your product. Potential consumers will then react to a picture the product, which enables a firm to determine initial attitudes prior to expensive prototype development.
A business and financial analysis for the remaining product concepts will be much more detailed than products screening. American apparel will need to consider the following five factors in the business analysis stage; demand projections, cost projections, competition, required investment, and profitability. The product development stage will convert the idea into a physical form and will identify a basic marketing strategy. This stage will also involve packaging, construction, branding, product positioning and use testing.
The test marketing stage will involve placing the product for sale in one or more selected outlets to determine how that product will perform firstly within the market but also under the proposed marketing plan. The purpose here will be to evaluate their new product and pre-tested marketing efforts in a real situation in order for the introduction of their product. Rather than the company asking about consumer behaviour test marketing allows for actual consumer behaviour to be observed. After all of the testing is completed American Apparel will be able to introduce the product to its full target market (commercialisation).
This will involve implementing a full marketing plan and full production. A product development strategy is needed not only to organise development projects but also to organise the development process. There is no singularly right strategy for any company. The strategy will take into account the company’s capabilities (strengths, weaknesses and core competencies), the competition’s capabilities (strengths, weaknesses, core competencies and strategy), market needs and opportunities, goals, and financial resources.
A company must recognize that it cannot meet every single consumers needs and that it must focus on what will distinguish it in the market place. There are six primary product development strategic orientations: Time-to-market, low product cost, low development cost, product performance technology and innovation, quality reliability and robustness, and finally service responsiveness and flexibility: •Time-To-Market- Involves getting a product to market, fast. This is typical of companies involved with rapidly changing technology or products with rapidly changing fashion.
Technology development must occur on an independent path from product development and technologies should be inserted on a “modular” basis, often with frequent product upgrades to make this strategy work. •Low Product Cost – This is focused on developing the lowest cost or highest value product. This is typical of companies with commodity type products, where products are regularly reaching the mature phase in the life cycle, or where there is consolidation or a shrinking market. This type of orientation typically will require additional time and development cost to optimize product cost and manufacture. Low Development Cost- This focuses on minimizing the cost of developing products within the budget. While this is not commonly used, it occurs mainly when companies are developing products under contract for other companies, where a company has severely constrained financial resources, or where a stealth development effort is being undertaken. This orientation is, to some extent, compatible with time-to-market, but involves tradeoffs with product performance, innovation, cost and reliability. •Product Performance, Technology and Innovation-
This focuses on having the highest level of product performance, the highest level of functionality, the latest technology or the highest level of product innovation. This orientation can be pursued by companies in many industries or many products except commodities. Using this strategy involves higher risks with newer technologies. •Quality, Reliability, and Robustness- This focuses on assuring high levels of product quality, reliability and robustness. This orientation is typical of industries requiring high quality because of large costs to correct a problem (e. . the food or automotive industry), the need for high levels of reliability (e. g. , aerospace products), or where there are many safety issues (e. g. , medical devices, pharmaceuticals, commercial aircraft, nuclear plants, etc. ). This orientation requires added time and cost for planning, testing, analysis and regulation. •Service, Responsiveness and Flexibility- This focuses on providing a high level of service, being very responsive to customer needs, and maintaining flexibility to respond to new customers, new markets and new opportunities.
This orientation also requires additional resources to provide this service and responsiveness. American Apparel will need to adopt one of these strategies in order to develop the shoes. The proposed strategy would be to intertwine the one they already use, Time-to-market, with service, responsiveness and flexibility. This is because as with any high street fashion retailer they will need to be able to get the product to market fast as fashions are always changing, this should not be a problem unless due to the production being in the US.
However interlocking this with the service responsiveness and flexibility strategy will allow customers needs to be looked after, which is exactly what a company with organic products should be seen to be doing. As there is not a large number of companies who sell organic shoes they will need to be flexible in order to deal with new customers, in a new market. Conclusion Design is an integral part of the whole product development process. It is the integral part to any company allowing consumers to have a preference to their products.
Design is a value adding process which all companies must undergo, everything ever made by human beings has required design. Also everything that has been designed, whether it be a product, service, an identity, or communication has one thing in common, that design had to be managed. Therefore, the answer is simple; design management adds value to design. Design management skills can be considered as a form of unstated knowledge that is possessed by certain individuals, which improves the design process in a company. Skills can be a defined as a form of know-how, which has been developed from either practical experience or formal training.
These skills are involved in many design management activities, i. e. designing low cost into products, involving customers in the design process, obtaining new product ideas from customers, or discovering new design ideas. Therefore, American Apparel, or any firm for that matter, must invest both time and money into design management; this can save them money and improve customer satisfaction. Chivra and Alegre (2009) proposed this simple but effective hypothesis: `There is a positive relationship between design management and firm performance’ Design Process Ideals Management Process Ideals Creativity Problem Processing
Innovation Design Management Leadership Development Organisational coordination Consumers Needs This self developed model shows the integral part that design management plays in product development. It indicates that design management should be in the centre and management and creative issues must be dealt with by using it. The consumer’s needs are also critical in this model, everything in the design process and management process should adhere to consumer needs, whether it is the end product itself or perhaps organisational structure, so that the consumer knows where to express any troubles they may have.
Thus all aspects should be coordinated, in some way, by or through the design management. Word Count: 6,588 References •J. Straub (2006)-American Apparel Exposed- Who’s Your Daddy? – Clamour Magazine. •D. Vasquez, M. Bruce (2002)-Design Management- the unexplored retail marketing competence- International journal of Retail and Distribution Management. •Howard Price – (1996)The anthropology of the supply chain Fiefs, clans, witch-doctors and professors •http://www. answers. com/topic/american-apparel [Date accessed November 5th] •http://www. designcouncil. org [date accessed November 15th] •http://www. dmi. rg [date accessed December 7] •http://www. americanapparel. com [date accessed November 2nd] •http://www. mindtools. com – Porters Five Forces-Assessing the balance of power in a Business Situation [Date accessed November 21st] •J. montana, F. Gurzman, I. Moll (2002)-Branding and design management: A brand design management model. •Okpara (2007) -The value of Creativity and Innovation in Entrepreneurship- Journal of Asia Entrepreneurship and Sustainability. •R. Chiva and J. Alegre (2009)- Investment in Design and Firm Performance: The Mediating Role of Design Management – Journal of Product Innovation Management- p5 •R.
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