April 6th, 2013
Shanghai Tang has been in the business of selling high quality retail items for men and women, clothing and accessories, since 1994. Their designs have been based upon Chinese cultural influence while also being modern and wearable in markets around the world. Although business has gone well under the leadership of Rafael Le Manse, the company is experiencing some new internal and external issues. Shanghai Tang’s competition is about to establish a market presence in China and in order to stay ahead in the game; Le Manse needs to figure out how to expand the existing customer base. Also, Le Manse’s long time creative partner, Joanne Ooi, is leaving the company. At best, if no action is taken, the company will be able to stay afloat and see marginal profits with a design team that will be without a leader and solid direction. What is likely to happen is a decrease in sales and the existing consumers are going to buy goods from the “new store coming to town.” Alternatively, Shanghai Tang could actually go out of business if they don’t reestablish themselves with their existing consumers and expand their current market. If Shanghai Tang is to sit back on their heels, they will fail.
An alternative for Le Manse and Shanghai Tang is to increase their current lines of products with new designs that appeal to the modern Chinese and traditional Chinese markets. This strategy will invoke a new image and presence within their core market that they were founded upon. In the Mainland China market 75% of their customer profile are between the ages of 26-45, and 82% of that age bracket being in the Hong Kong market. Also, there are over 1.6 million wealthy households (> $35,000 USD) in China and the market is increasing by 16% on an annual basis. The design staff now knows what is appealing to the Asian markets by looking back at their past seasons where sales were down. This now...