Fashion Competitive Strategies: Two-Fold NPD
Claire Shih WenYing
The fashion industry embraces all kinds of evolving businesses, in which strategies and structures reflect the dynamics of today’s fashion environment. Being driven by advanced technology, market demands and the effects of globalisation, the fashion industry is adopting new strategies accordingly to gain competitiveness that can result from new products.
Fashion New Product Development (NPD) consists of highly fragmented activities and varies in different parts of the world. With the development of the global textile and fashion industry, the dominators of demand and supply are shifting from country to country. In particular, with the recent quota elimination and economic recession, the structure of the fashion industry is being reset for its buyers, manufacturers and suppliers. Manufacturing competition in the developing countries and falling demand in the economically developed countries have led to the consolidation of the textile and apparel value chain. The remaining manufacturers serving the key fashion markets tend to follow the upgrading trajectory of textile development: from garment assembly activities, textile production to fiber production, or even further towards machinery production. With their upgraded NPD, these developing countries, such as China and India, are encouraged to focus on their NPD domestically rather than being export oriented. However, not every developing country has a sufficiently high level of domestic market demand to follow this industrial development pattern. The newly developed countries are a case in point, which require further research attention and are the focus chosen for study.
This study aims to explore how the fashion NPD process of manufacturers operates in the textile and fashion industry. More specifically, it examines the relationships between competitive strategies and the inputs and outcomes of the NPD process within the industrial development trajectory. An in-depth case study is employed in the study.The company in this study was founded in 1976 as a textile trader in Taiwan, where the majority of textile and apparel manufacturers have relocated their production bases or terminated their businesses due to the global competition mainly stemming from low cost manufacturing. As a consequence, this company has undergone a number of business restructures and applied business strategies to sustain their business. This study contains longitudinal and multi-sourced data including interviews with the key personnel and examination of both internal and external documentation, set against a business and academic background provided by the literature review. The research findings reveal that having obtained or integrated the design activities, this company’s apparel NPD tended to focus on the intimate markets sharing cultural similarity, while their textile NPD was inclined to collaborate with other technology-led suppliers to produce more higher-value and diversified products for various markets. A two-fold NPD was found to drive the current textile and apparel integrated businesses: firstly, the textile NPD with R&D focus created adding values; secondly, the apparel NPD could be enhanced by the value of fashion retail. This study implies that when the textile R&D and apparel design are integrated into the core of the business, competitiveness can thus emerge through effective management and strategies, e.g. co-branding and co-designs. Further business relationships with retail channels are thus augmented.