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The Total Image Group   ...Business Alchemists

A regularly updated resource of information and news items.

Archive for August 2009

Perhaps the largest single design project conducted by Virgin Atlantic Airways in recent years is the design of the company’snew Upper Class Suite. Introduced in response to a direct competitor action (BA’s introduction of the first fully flat aircraft seat-bed), the Upper Class Suite was a totally new concept in aircraft interior design and was designed, engineered and brought into production in only 36 months

Posted Thursday, August 27th, 2009

Design Council

The original requirement for the Upper Class Suite was simple: Virgin Atlantic needed to introduce a flat bed into its upper class cabins. Joe Ferry, Head of Design and Service Design, and his team began by exploring a wide range of different configurations, including the use of seats with separate sleeping areas. Eventually they settled on the concept of a seat and a bed that were in the same space, but separate entities.

During the early concept phases Ferry and his team also spent considerable time with Virgin Atlantic‘s management discussing different seat design features and assigning relative priorities to each, so decisions could be made on what to include and what to remove from the final design.

As concepts developed, the team worked with Virgin Atlantic’s engineering function to understand whether particular concepts would be acceptable under safety and airworthiness regulations. It also brought in its first external support – in the form of Design Q, an automotive design consultancy used for its layout design and model making skills, which could help to produce 3D concept models to assist with evaluation.

At the end of this initial phase, Ferry and his team presented their concepts to the board, which gave the project the green light to move forward to the Design Development stage.

From concept to prototype
Once the overall concept was evolved, Virgin Atlantic began to involve more specialist outside design support, including a structural engineering firm to assist with the mechanical design of the new seat and to ensure compliance with the very stringent aircraft safety specifications. They also brought in furniture design specialist Pearson Lloyd, after briefing the agency to produce a hypothetical concept for a competitor product to understand its design language and style.

Ferry emphasises that the Upper Class Suite experience is a holistic approach covering much more than just the seat design, involving not just the cabin ambience but also associated service elements including limousine pick-up, in-flight massage and a range of dining options. The company brought in additional specialists during the design process to achieve this.

Another design agency, Softroom, was used to develop a concept for the whole interior ambiance and specialist lighting design consultancy DHA assisted with illumination concepts.

Pearson Lloyd used its own ergonomic experience to optimise the comfort of the seat concept and used ergonomic data that Virgin Atlantic Airways had commissioned from Qinetiq. Within 12 months the team had built a full-scale dynamic prototype seat for evaluation purposes.

The prototype Upper Class Suite business case was approved by Virgin Atlantic’s executive board and the seat design then underwent an extensive evaluation process. Members of cabin crew were seconded onto the design team to evaluate usability from a crew point of view and frequent flyers even came in to sleep in the test seat at Virgin Atlantic’s HQ. These extended test sessions were augmented by shorter review sessions in which the company’s top 50 passengers would come and assess the new design. Such user evaluation was important, says Ferry, but must be treated with caution as passenger feedback – which can be limited in so far as consumers are only able to react to what they have already experienced – won’t ‘take you to the next level.’

Manufacture
Once the board had approved the seat design, The Virgin Atlantic design team turned its attention to the manufacture of the seat. At this point in the process, input from external design consultants stopped: Virgin Atlantic and the consultants recorded the agreed design in a Detailed Design Specification Document and through it Ferry and his team became ‘guardians of the design’ throughout the engineering and manufacturing process. Here again, the availability of a working concept model was extremely useful, as without it, says Ferry, ‘the manufacturers would have said, “It can’t be done”.’ Manufacturing engineering took 24 months and at the same time the Virgin Atlantic design team conducted an extensive value engineering programme, looking for opportunities to reduce costs without affecting user perception of the product by, for example, ensuring that the leather seat cover designs make maximum possible utilisation of a single hide. The Upper Class Suite was delivered to aircraft in late 2003. Virgin Atlantic continues to use a similar process on other projects and is just completing a redesign of its Premium Economy class cabin.


A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well. Jeff Bezos, Founder of Amazon.com

Posted Friday, August 21st, 2009


Selling your business successfully

Posted Friday, August 14th, 2009

It is estimated that at around 10-15% of Britain’s three million businesses are looking to sell or change ownership at any given time.

BBC NEWS, 21st May 2008

The last few months have seen many business owners rush to take advantage of the beneficial Capital Tax Gain regime before it changed in April this year.

Alongside the credit squeeze, falling house prices, rising business liquidations and possible recession, you might think now is not a great time to be selling a business.

The truth though is that quality businesses will always sell for good prices, regardless of the state of economy.

However, it is estimated that only one in 10 businesses that go to market end in a sale.

Expectations

Getting your price wrong, and not talking to enough of the right people, are the two main reasons why most business sales fail.

Out of these, an unrealistic price expectation is the most significant.

Many business owners mistakenly believe that a sale will generate enough money to help them retire to a life of luxury for the rest of their lives.

Whilst multi-million pound deals make good headlines, the reality is that most business sales rarely deliver a life-changing financial future.

A business is only worth what a willing buyer will pay.

For small businesses, a beer mat calculation done over the phone by a business transfer agent, accountant or knowledgeable friend down the pub, is unlikely to hold any weight opposite a banker or investor when it comes to providing the cash for a purchase.

Wanting £3m because you have always wanted to be a millionaire is not going to get you a result if you cannot make a credible explanation of your business’ value.

Value

A good understanding of what makes a business valuable and realising who might want to buy, is essential.

An owner has to substantiate and prove why the business has value; otherwise a buyer will simply walk away.

This is particularly true, now more than ever, with a seriously diminished appetite for lending among the banks.

A seller must place himself in the buyer’s shoes.

They will ask themselves what they are buying, and why.

What makes the business truly unique? Will the return justify the expense? Will their money be better spent elsewhere? What are the comparative investments?

Turning over the stones

The second reason for sales failure is not talking to enough buyers in order to find the right one.

This is where using the right business broker can really make a difference.

If an owner relies on their accountant to write to the nearest competitors or place an advert in the Sunday papers, they are unlikely to get the best deal, or any deal.

A business sale will involve accounting and legal steps.

But do not lose sight that, ultimately, selling a business is a sales exercise and this is the skill which will really matter and make the difference.

The more buyers you can get in front of, the better chance you have of getting the best deal.

An experienced broker should research a business and industry inside out and produce credible and professional documentation.

This will cover a full valuation, as well as a full marketing plan, designed to identify and reach every possible potential purchaser for the business.

This plan should include exposure to a database of known prospects and broker contacts, and direct liaison with businesses identified through research, as well as advertising on the web and in other relevant media.

Leave one of these stones unturned and vital opportunities might be missed.

Don’t leave it too late

The first step in selling a business should be to seek out specialist help early on.

A business should be properly appraised and valued.

This will set the right level of expectation as well as highlight any issues which should be addressed prior to going to market.

For example, would a change in Government legislation suddenly alter the business landscape? Is now the right time to be selling? What makes a business valuable? Can a business be improved? Why would a buyer would be interested? What other businesses in the sector have sold and for how much?

This process alone can dramatically affect not only the amount of money changing hands but also if a deal can be done at all, which will save you time, money and unnecessary worry.

Experience

An appraisal or valuation should be done by a credible source.

This should be an experienced business broker or an accountant who specialises in business sales, ideally a year or two ahead of when looking to exit.

As with most things in life, there are good and bad.

Do research, look for recommendations and do not be afraid to check that a broker has the necessary experience and proven track record.

A specialist in selling fish and chip shops or pubs is unlikely to help sell a recruitment agency or precision engineers.

A seller should not let poor planning, unrealistic expectations and weak marketing prevent the achievement of the ultimate holy grail of the entrepreneur – a successful exit.


How design can help your business perform more strongly

Posted Friday, August 7th, 2009

When times are tough and revenues are falling there may be a temptation for business to cut ‘discretionary’ budgets – money allocated to activities such as design, perhaps.

But design is a powerful tool in a downturn.

Design Council
Our research shows that more than half of the UK’s businesses:

  • …are looking to design their way out of downturn
    Over half (54%) of the firms in our survey thought design would contribute to a large or great extent in helping maintain their competitive edge in the current economic climate.
  • …think design is more important now
    Similarly, 53% thought that design had become more important in helping the firm to achieve its business objectives over the last three years.
  • …think design is integral to the economic performance of the UK
    The same number agreed or strongly agreed that design is integral to the country’s future economic performance.

Fortunes can change for any business – large or small – sending a once successful and thriving operation into decline. Shifts in the economy, in consumer sentiment or changes in the marketplace are just a few of the factors that might leave a company in trouble and unsure how to get back on track. Even mighty corporations such as McDonald’s or entire industries like the Swiss watch industry have fallen foul of changes in the market, but both responded through an investment in design and innovation which helped to turn their fortunes around.

What can design do?

There are many ways design can help your business perform more strongly, from improving your image (internally and externally), innovating your products or services, through to enhancing your overall efficiency and saving you money.

Companies of different sizes and from different sectors have worked with designers to improve their performance during challenging conditions.

Castle Rock Brewery
Competing in the competitive real ales market is tough. Castle Rock Brewery in Nottingham brought in designers The Workroom to give its communications and graphics a more professional edge. Demand is now outstripping supply and the company’s barrel sales growth has doubled.

Thistle Hotels
The rise of value chains has meant that hotel groups in the traditional mid-market have suffered. Thistle Hotels is using an image overhaul by designers Navyblue to spearhead a multimillion-pound refurbishment and service improvement programme, and visitor numbers are already rising.

McCain’s
Frozen food company McCain suffered badly following a backlash against poor diets and rising obesity, so it worked with designers Elmwood to rethink the way its packaging speaks to shoppers in supermarkets, promoting the product’s natural ingredients and low fat. Sales have since blossomed to record levels.

HMV
High street music specialist HMV has had to react to massive changes in the way its customers buy music and video titles since the arrival of digital files and the internet. It used design to create a next generation store and whole new brand proposition. Sales at a trial store jumped by 25 per cent.

Ian Macleod Distillers
Scotch whisky drinking is in decline. So family company Ian Macleod Distillers employed designers to create packaging for its new Smokehead whisky aimed at bringing younger consumers to the whisky market. Sales have doubled since launch in 2006.

Design beats the blues

During hard times investment in design can give a business a competitive edge over rivals who are reining in their design and innovation budgets in order to save money. As American Express chief executive Ken Chenault told Fortune Magazine: ‘A difficult economic environment argues for the need to innovate more, not to pull back.’ Similarly, in September 2008 following a crisis in the global financial markets and in the face of an impending worldwide recession, Intel‘s chairman Craig Barrett told Reuters that investment in the company’s products and innovation remained very much on track. ‘We’ve always had the attitude that you have to make that investment in good times and bad,’ he is quoted as saying.

While American Express and Intel are global businesses, with dedicated R&D and marketing functions, the same wisdom applies to a business of any size: when times are tough it is change, dynamism and vitality – not hunkering down quietly – which are the keys to success. And this is exactly where design can help.

As you can see in the case studies above, companies big and small are rising to the challenge of hard times through a conscious investment in design. Their decision to innovate – to rethink and regenerate their products, operations and image – can be taken by a company of any size and in any area. Design and brand strategy can help elevate a firm or its products from the ordinary, the tired or the predictable, demonstrating that the business is alive, dynamic and responsive. And in a declining market that just might make the difference between growth and collapse.

Famed for precision timekeeping since the late 16th century, Switzerland’s watch industry nevertheless ran into crisis during the mid-1970s when Asian companies began to take over the market with quartz crystal technologies. Battling recession at the same time, Swatch (then known as SSIH) became insolvent, forcing its creditor banks to take control. Eventually, in the mid-1980s, CEO Nicolas Hayek took the company private and started a design revolution which was to save the business and put Switzerland back in the vanguard of watch manufacturing.

Design was instrumental in this reinvention. A combination of product aesthetics and reengineering (which reduced costs) gave Swatch the edge, leading it to become the largest watch company in the world, rescued from the jaws of collapse. Launched in 1983, the first Swatch wristwatch was a slim model using only 51 components (versus a typical 91 or more) and was marketed at an affordable price with contemporary design and styling. According to Swatch, the product has gone on to become the most successful wristwatch of all time.

Swatch‘s gross sales reached approximately £3 billion in 2007, but Hayek also claims that the design strategies he developed for Swatch in the early 1980s led to the rebirth of the entire Swiss watch industry, regaining its leading position worldwide since 1984. Data bear this out, with Swiss watch exports growing from around £2 billion in 1986 to £7 billion in 2006, according to the Federation of the Swiss Watch Industry.

While the creation of luxury power boats for a global market may represent design for a wealthy minority, Sunseeker International’s success results from a dedication to design from the smallest beginnings, undertaken in the face of the decline of British shipbuilding.

Formed in the 1960s by brothers Robert and John Braithwaite in a single industrial unit in Poole Harbour, Sunseeker was initially a distributor of Scandinavian boats. But Robert Braithwaite believed there was a potential UK market and so designed and built his first boat. From that start, the company has doggedly maintained a priority focus on design, design management, technology innovation and bespoke building. This combination has helped Sunseeker grow from its single unit to encompass seven sites and a million square feet of production space.

Believing that design is a vitally important part of this success, Sunseeker employs exterior and interior designers to work alongside engineering design, yacht styling and production teams, as well as with customers. It reinvests around 6 per cent of turnover in research and development. This has led to truly global success from a UK base: designed and manufactured in Poole, around 99 per cent of Sunseeker’s boats are now sold to the export market.


 
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