Industrial Design: A Competitive Strategy

Design Management Review, Fall 2004 by Grzecznowska, Anna, Mostowicz, Emilia

Analyzing a survey of Polish companies, Anna Grzecznowska and Emilia Mostowicz put the value of design in the context of other needs. Their study reveals that design can improve competitiveness and profitability hut highlights how this depends on many factors, including the size and type of business, its relationship with customers, and the opportunities for international exposure and promotion.

In May 2004, Poland became a member of the European Union, and like other new members, it has had to make some adjustments. Foreign trade has developed significantly, and as a result, Polish enterprises are facing international competition. The process of integration inclines many enterprises to undertake activities aimed at strengthening their brands and verifying their production programs in order to export their products to highly developed countries and to maintain their position in foreign markets.

One of the main factors contributing to the competitive position of Polish enterprises is modern industrial design. In the face of similar standards in the use of technology and fairly standardized product quality, attractive design is the one feature that offers the possibility of differentiation in the market. Thus industrial design, especially, is now seen as a force capable of contributing to economic growth.

To study design's influence on achieving market success in small and medium-size enterprises, the Institute of Industrial Design in Warsaw, in 2002, undertook to determine to what degree enterprises raise the competitiveness of their products as a result of investing in design, and what impact design has on economic output and the development of an enterprise strategy.1

The answers to the questions included in the questionnaire were obtained from 161 industrial enterprises chosen at random from roughly 500 companies operating in two provinces and registered in the KOMPASS Poland catalogues.2 (The respondents were drawn from company management, and their responses were made primarily in writing.) The selected companies employed from 20 to 500 people. Designwise, the company sample ran the gamut from firms that make significant use of design to those that do not make use of any design services. The companies included 73 firms in the textile industry, 54 furniture companies, and 34 from the home appliances industry. Nearly 67 percent of respondents export their products, mainly to EU countries; about 30 percent export to Russia and other Eastern European countries.

Recognizing industrial design as a factor for commercial success

From among all respondents, there were 146 enterprises claiming that over the previous two to three years they had achieved market success through manufacturing new products, entering new markets, and strengthening the company's image, its brand, and its position on the domestic market. More than 40 percent of the enterprises recognized design to be one of the main factors contributing to commercial success. Interestingly, this was also the opinion of the respondents from companies that rarely made use of design services. The majority of the respondents (nearly 77 percent) attributed their success to the precise adjustment of their products to the requirements of their clients (warehouses, "big box" stores, and individual purchasers). The textile enterprises, for instance, manufacture goods to order for particular, often foreign, contracting parties, and the furniture companies do much the same, producing furniture designed, at least partially, to the requirements of individual clients.

Nearly 60 percent of the enterprises investigated tried to maintain their market positions through the competitive prices of their products, and more than half attributed their success to good management based on modern marketing principles, long-term contracts, and so on. The respondents also mentioned as factors of success high-quality work, prompt and punctual delivery, and good cooperation with foreign partners.

Thirty-three of the companies had received awards at various national and international competitions; 75 percent of these enterprises recognized design as the main contributor to their success on domestic, as well as foreign, markets.

The results of the investigation indicate that market forces require many small enterprises to produce goods customized to the order of particular clients. As mentioned earlier, this was particularly true of the textile and furniture companies. In these cases, product quality, at least from the point of view of design, depends on the client's preferences. Therefore it seems it would be useful to promote good design at, for instance, fashion shows and other events, such as trade fairs and exhibitions.

Manufacturers who submit their products to various competitions at national and international exhibitions and trade fairs are in a better situation than those who do not. In general, it is these companies that suggest new product designs to their clients. This is also why the majority of these firms understand that building a strong brand and corporate identity through professional design is profitable.