The impact of competitive structure and technological environment on design management: a case study of the UK touring caravan industry

Howard Davies, Faculty of Business and Information Systems, Hong Kong Polytechnic, Hung Horn, Kowloon, Hong Kong

This paper uses a case study to explore the relationships between the

structure of competition, the technological environment and the process of

design management. The analysis shows that the industry examined is

unattractive in structure and that the technological environment is highly

restricted. As a result incumbent firms are obliged to find approaches to

design management which are as inexpensive and risk-free as possible. The

implication is that analyses of design management should take cognisance

of competitive structure and technological environment when seeking to

identify prescriptions for best practice.

Keywords: design management, competition, technology, caravans

1 Black, C D and Baker, M J ‘Success through design’ Design Sfudies. Vol 6 No 4 (1967), 207- 216 2 Walmh, V, Roy, R and Bruce. M ‘Competitive by design’, J. Merkefing Manage, Vol 4 No 2, (1966) 201-216 3 Davies, Ii ‘The designer’s perspective: managing design in the UK’ J. General Mensge. Vol 14. No 4 (1969) 77-67 4 Potter, s, Roy, R, Capon, c. Bruce. M, Walsh. V and Lewis, J ‘The benefits and cusfs of in- vesfment in design: using pmles- sional design expertise in pro- duct, engineering and grephics projects’, Design Innovation Group, Manchester and Milton Keynes, UK (1991) 5 Roy, Ft. Walker, D and Crow, N Design for fhe Market, EITB Publications. Watford. UK (1967) 6 BSI ‘Draft British Standard: guide to managing product de- sign’ Technical committee QMSI 4 Document 67l67900. British Standards Institution. London,

continued on page 366

T he understanding of design and its management has advanced very substantially in recent years. Difficulties of definition have been explored and at least partly resolved, in a variety of

ways . ie3 It has been firmly established that investment in design activity can enhance the commercial performance of individual firms4 and major elements of ‘best practice’ with respect to design management have been identified5*6.

As the literature has developed, it has tended to broaden its scope, extending to the analysis of the relationship between design and marketing7-9, the use of outside consultants versus in-house design departments” and the complex question of the links between design, innovation and the research and development function”. This growing corpus of analytical studies has been complemented by an expanding set of case materials, used to identify issues which have arisen in respect of individual firms or design projects.

Despite this expansion of the literature, neither the cases nor the analytical studies have attempted systematically to place design manage-

0142-694x/93/040365-14 @ 1993 Butterworth-Heinemann Ltd

continued from page 365 UK (1986) 7 Bruce, M’The impact of design on marketing’. in Ho/beck. J (ad.) History. Stafe of fhe Art and Fu- lure Trends of Engineering Oe- sign, University of Trondheim. Trondhem, Norway (1991) 8 &we, M and Capon. C ‘De- sign-marketing’s poor relahon? Working Paper Series UMIST. Manchester. UK (1991) 9 Bruce, M and Howie, A ‘Man- aging design: a task lor markel- ing’. unpublished paper. UMIST, Manchester, UK (1991) 10 Roy, R, Potter, s, capon. c, Bruce, M and Walsh, V ‘End of award report lo Ihe Economic and Social Research Council: Iha bane!% and costs 01 InveShent in design’ Working Paper WP-13. Design lnnovahon Group, Milton Keynes, UK (1990) 11 Walsh, V ‘Design, innovation and the boundaries of Iha firm: lmplicalions lor management’. Paper presented at the Collo- quium on Management of Tech- nology - implications lor Enter- prise Management and Public Policy, Grandes Ecoles Fran- c&es, MIT and the University of Calilornia at Berkeley. 27-26 May 1991 12 Roy, R and Potter, S ‘Man- aging design projects in small and medium-sized firms’, Tech- no. Anal. Sfrat. Manage. VoI2 No 3 (1990) 321-326 13 Bruce, M and Rodgus, G ‘Innova1ion strategies in Ihe en- zyme induslry’. R&D Manage. VoI21 No 4 (1991) 319-330 14 Kamlen, M I and Schwartz, N L Market Structure and Innova-

‘lion. Cambridge University Press, Cambridge, UK (1962) 15 Saren. M A J ‘The role of strategy in lechnology innova- tion’, in Mangham, I L (Ed.) Ogarwafion Analysis and Oe- velopmenl, John Wiley, Chiches- ter, UK (1967) 18 Loverldge, R and Pitt. M The Sfrafegic Managemenf of Technological Innovalion. John Wiley, Chichester. UK (1990)

366

ment issues in the context of the competitive structure of the industries involved or the technological environments in which they operate. The cases tend to share many of the following characteristics:

They are concerned with a single design project, rather than the overall place of design in a company’s strategy They are concerned with a single company, and cannot therefore address the sectoral context in which the company operates They are ‘high profile’ and therefore probably untypical cases where the company in question took a special interest in design, or was particularly proud of the project described

The analytical studies tend to be much broader in scope, covering more than one firm or project, and they often make comparisons amongst different groups of firms. However, they tend to pay little attention to the industry-level factors which determine the context in which those firms operate and none of them relate design activities to the technological environment. In some cases” attention is restricted to small and medium firms, across a range of very different industries, and the analysis makes no reference to structural or technological variations across those indus- tries. In other studies, where a single industry has been examined’“, the structure of that industry, the nature of its technology, and their impact on the opportunities and threats facing design managers, has not been considered.

In many respects these omissions are surprising because other literatures have devoted a great deal of space to the links between the competitive structure of industries, their technological environment. the rate of innovation, and the technological strategies of the incumbent firms. In economics there has been a long debate, reaching back to the ‘Schumpete- rian hypothesis’ that monopolistic industries dominated by large firms produce the most rapid rates of progress (see Kamien and Schwartz” and Saren15 for reviews of that literature). In the literature on corporate strategy substantial attention has been paid to the different strategic options facing companies in respect of their technological strategies, and the influence of the technological environment on the appropriate choice of option’6. If competitive structure influences the pace and direction of innovation, as the economic analysis suggests, and if companies face a number of different options in respect of their approach to technology it seems only logical to hypothesize that design management practices will be influenced by both the competitive structure of an industry and the technological environment in which it operates.

Design Studies Vol 14 No 4 October 1993

17 Davies. H and Hlrd. M ‘Caravans. designers. lasers and dustbins’, in Managing Design - An Update, CNAA. London (1987) Z’S32 18 National Caravan Council The British caravan industry sta- tistics, National Caravan Council, Aldershot. UK (1991) 19 Porter, M Competitive Strategy: Techniques for Analys- ing Industries and Competitors. Free Press, New York (1980)

This paper attempts to explore these relationships by providing an industry-level case study having the following objectives:

l To identify the ways in which the structure of competition, and the technological environment of an industry determines the opportuni- ties available to firms in respect of the role and management of design

l To describe the ways in which companies occupying different posi- tions in the industry respond to those opportunities

The industry selected for the case is that producing touring caravans in the United Kingdom, for a number of reasons ” Firstly, the industry is small, . so that a substantial proportion of the incumbent firms could be included in the study. Secondly, it involves a wide range of design considerations, from engineering design and interior design to exterior styling, corporate identity and promotional design. Thirdly, the industry is very much distanced from the usual run of cases involving large firms employing prestigious design consultancies on highly visible ‘one-off’ projects.

1s tructure of competition in the UK touring caravan industry Touring caravans are mobile homes (trailers in American English) which are small enough to be towed from place to place by a conventional domestic motor vehicle. The National Caravan Council” estimated that there were 560 000 such vans in use in the UK in 1990, with the industry producing an average of 26 000 per annum over the period 1970-1990.

The production of these vans is essentially a domestic UK activity, imports being a very small proportion of total sales, and the industry is small, both in its total size (approximately 3000 employees) and in terms of the firms within it. These consist of a market leader, having around 30% of the total market and employing around 700 employees, a small inner ring of firms having around 200 employees and a periphery of about 30 small firms, most of which have less than 20 employees.

In order to provide a systematic description of the industry’s competitive structure Porter’s ‘S-forces’ framework may be applied”. According to this analysis, the nature of competition may be described in terms of the following five forces:

l Rivalry amongst incumbent firms l The threat of entry l The threat of substitutes l The power of buyers l The power of suppliers

Design management 367

The strength of each of these forces is determined by a subset of the structural characteristics of the industry, which have been analysed and presented in detail for the touring caravan industry by Davies”.

The salient features of that analysis are easily summarized. In the first place the industry is one in which rivalry amongst incumbents is high, for a number of reasons. The demand for touring caravans is highly volatile, so that there are often periods of intermittent over-capacity during which companies struggle to maintain sales through price-cutting, leading to frequent bankruptcies, even amongst major players in the industry. Product differences are relatively limited, buyers are well informed about the different products on the market and switching costs for buyers are low. All of these factors are predicted to increase the extent of rivalry amongst incumbent firms.

The second major feature of the industry is that the threat of entry is substantial. As economies of scale are very limited, it is possible for new tirms to enter on a small scale and to survive, paying only a small cost penalty for that small size. Proprietary product differences which might be patented in order to prevent copying are insignificant, capital require- ments are low and consumers’ loyalty to different brands is not strong enough to prevent new entrants from taking custom away from incum- bents. It is a relatively simple and inexpensive matter for a potential new entrant to assemble the capital, workforce, premises and know-how to set themselves up in production.

The third salient feature of the industry is the existence of a very large pool of second-hand vans, equal to around 20 years’ production, and a very active second-hand market, which provides an alternative source of supply for buyers, should they feel that the prices of new vans are too high. The threat of substitution is therefore very substantial.

The combination of these three forces - high rivalry, high threat of entry and substantial threat of substitution - suggests that the touring caravan industry will be an ‘unattractive’ one, yielding low and variable profits for the incumbents and providing no great incentive for profit-seeking firms to enter. While one of the other two forces is reasonably favourable to the industry in that supplier power is low, caravan distributors exert consider- able buyer power over the producing companies, reinforcing the hypoth- esis that the touring caravan industry is a difficult environment in which to operate. That judgment appears to be corroborated by the number of

20 Davlaa, Ii Managarisl Eco- bankruptcies in the industry, the limited profit margins suggested by nomics for Business, Manage- manf and Acwunling. Pitmans.

company profiles from market intelligence agencies, and the lack of London (1991) interest in the industry shown by the major conglomerates.

368 Design Studies Vol14 No 4 October 1993

21 Rothwell, Rand Zagfold, W Industrial Innovation and Public Policy Frances Pinter. London (1991) 22 Gosh, P and Dumss, A ‘Si- lent design’. Design Sfudies Vol.9 No 3 (1997) 150-156 23 NOISO~. R R and winter, s G An evolutionary theory of BQ)- nomic change, Harvard UP, Cambridge. Mass (1992) 24 Utterback, J M and Kim, L ‘Innovation and the evolving slructure of the fin: a framework for technology policy’. Paper pm- sented to the Conference on the Management of Technological In- novation, Worcester Polytechnic Institute Washington DC, May 19.33 25 Georghlou, L Motcaife J A. Glbtmns M, Ray T and Evans J Post Innovative Performance. Macmillan, London (1996)

1.1 I mp lea I’ ti ens of competitive structure for the design environment The structure of the caravan industry has a number of general implications for the environment in which design activities take place. In the first place, the firms are small (apart from the market leader and the ‘inner circle’) and as a result can be expected to have better internal communica- tions and role flexibility, while suffering from a lack of skilled staff, shortages of finance and poor links with external sources of expertise*‘. It is to be expected that design activity in such firms will be ‘silent’ in the sense that it is spread amongst employees whose primary,function and job description does not include design22 and that the use of outside designers will be limited. The unattractive competitive structure implies that profits will be relatively low and volatile and cash flows will tend to be extremely right, for firms of all sizes. As a result, managers have very little opportunity for discretionary or speculative investments in design. The environment is a difficult one, and very different from that described in many of the case studies.

2Th 1 ec no ogical environment of the caravan industry The technological environment of an industry may be described in a number of ways, many of which emphasize the development of that environment over time. Nelson and Winter adopt an evolutionary approach, suggesting that an industry’s technology develops along a ‘technological trajectory’ and can be described in terms of its position on that trajectory. Utterback and Kim24 refer in a similar way to the emergence of dominant designs while Georghiou et al.25 use the term ‘technological corridors’. For the purposes of this study, technological environment is described along two dimensions - ‘technological opportun- ity’ and the ‘regime of appropriability.’

‘Technological opportunity’ may be defined as the inherent potential for further profitable development of the industry’s product technology into new applications and process technology into cost reductions or perform- ance enhancement. This, in turn, is partly a function of the technology’s maturity. New technologies have a high level of opportunity which declines as the range of applications is fully exploited, dominant designs emerge in respect of products and the opportunities for cost reducing improvements in production are exhausted.

In the case of the caravan industry, technological opportunity is limited by two factors. The first is that the technology involved is mature, and has been for decades at least. The dominant design of the product is

Design management 369

essentially a ‘box on wheels’ and although insiders to the industry may refer to revolutionary changes there have not been any step-jumps in performance, changes in the functions fulfilled or new ways of fulfilling those functions. A 10 year-old van appears old-fashioned to the cognos- centi and it will have inferior performance to a new van. Nevertheless, it will still perform the same basic function adequately, as witness the 560 000 vans, representing the last 20 years’ production, estimated to be in use in 1990. Production methods are essentially craft-based and have not changed substantially for many years.

The second, closely related, factor is that any further product develop- ment has to take place within the very tight constraints set by the caravan’s basic function, which involves a trade-off between comfort and amenity on the one hand and towability on the other. The width of a touring van is limited to about 7 ft while the maximum body length rarely exceeds 20 ft. The greater the length and weight, the more powerful the tow-car required and the more limited the market. Some flexibility is offered through the addition of awnings to extend the accommodation but the difficulties associated with insulating space outside the van limits the opportunities in this respect, at least where the vans are designed for use in the UK. This combination of mature technology and tight constraints on further development means that technological opportunity is limited.

The second aspect of the technological environment, much emphasised by economists26, is the ‘regime of appropriability’, meaning the extent to which an innovating caravan company can capture the additional profits accruing to a successful innovation before they are reduced through imitation. In some industries, innovations can be protected through patents or commercial secrecy, giving the innovator exclusive use for a substantial period of time. In touring caravans, innovations are much less ‘appropriable’. New developments are difficult to protect and can very quickly be copied.

2.1 I mp lea ions of the technological environment for de- I’ t’ sign activity The combination of limited technological opportunity and limited approp-

26 Teece, D ‘Firm boundaries. riability leads directly to a number of features which characterize the

technological innovation and environment in which caravan design takes place. strategic management’ in Thc- mm. L G [Ed.) The Economrcs ol Strategic -P/arming: Essays in Honor of Joel Dean. Lexington

First and foremost, the potential losses to a ‘first-mover’ or a ‘technologic-

Books, Lexington (1966) al leader’27 are large, while the risks associated with being a ‘technological 27 Porter, M Competitive Advantage, Free Press. New

follower’ are limited. Examination of the trade press shows that the York (1965) market leader rarely made the first move to introduce an innovation,

370 Design Studies Vol 14 No 4 October 1993

despite its possession of superior resources. Novel features were more

commonly introduced by firms in the industry’s second tier, and then

taken up by the larger and smaller firms, after their market acceptability is

proven. Being first to introduce even a successful innovation does not

guarantee commercial success and a number of the most significant

innovations were first introduced by a company which became one of the

victims of the recession of the mid-1980s.

Secondly, there is a very rapid ‘bunching’ in the introduction of novel

features. When one company introduces a new idea, and it proves to be

successful, all of the others introduce it within two or three years.

Thirdly, design changes are incremental. Until the mid-1970s touring

caravans were essentially ‘white boxes on wheels’. Since then there have

been developments in respect of construction, exterior styling and in-

teriors. In construction the use of bonded styrene boards provides

lightness and improved insulation. Glass reinforced plastic gives further

weight reduction and facilitates the construction of rounded surfaces

which have better aerodynamic performance. Lightweight chassis make

towing easier and improve stability and fuel consumption for towing cars.

Much emphasis is placed on ‘towability’, as well as style and aesthetics.

In some cases design changes have combined the enhancement of

performance with aesthetic improvements, as with the development of

integral lockers for gas bottles, replacing ugly and poorly aerodynamic

lockers attached to the towbar.

Exterior caravan design has also changed incrementally. At one time,

white or off-white was an almost universal colour for vans, but over the

years colours have become more bold and a range of greys, blues, browns

and greens are available. Colourways and badging are combined with

window layouts to provide means of establishing a company ‘look’ and a

brand identity in an attempt to generate customer loyalty.

The third area of innovation concerns the interiors of the vans. Interior

layouts have developed in respect of the general ‘style’ of the living,

cooking and sleeping accommodation and the colours, fabrics and mate-

rials used. At the same time the amenities provided have been extended

from the original relatively primitive lighting, cooking and refrigeration

facilities to include showers, blown air heat, entertainment systems and

even imitation log fireplaces, inglenooks and roofbeams.

Design management 371

Table 1 The lntervlew sample

Company Name Size Market niche, by price

Marklead Largest firm Medone Medium Medtwo Medium Smallcheap Small Smallmid Small Smallex Small

Large number of ranges, including lowest cost Midrange Midrange Low end Midrange High end

3 Managing caravan design The analysis presented above suggests that design management in the touring caravan industry takes place in a very difficult environment. The competitive structure of the industry ensures that profitability is limited so that resources for investment in design are scarce. Even if such resources can be assembled, the problem of appropriability and the ease of imitation limits the extent to which innovation through design can contribute to profitability. The major question which arises in such an industry is ‘how do companies go about the process of design and its management in such a difficult environment?’

In order to examine the mechanics of the caravan design process and its management, interviews have been carried out with six companies producing touring vans. Table 1 describes the sample, using imaginary descriptive names for the real companies.

In each case, the Managing Director was contacted by telephone and sent a letter outlining the purpose of the project. An appointment was then made with whichever executive was deemed most appropriate by the Managing Director. In the smaller companies the interviewee was always the MD himself. In the medium-sized firms it was the Marketing Director and in Marklead the interviewee had the explicit title of Director of Design and Marketing. The interviews took place around a semistruc- tured questionnaire.

3.1 Th e perceived importance of design Various studies have shown that awareness of ‘design’ is an input to commercial success’. However, it has also been suggested that confusion exists with respect to the meaning of the term, especially in respect of the balance between the ‘soft’ or aesthetic and stylistic aspects of design and the ‘hard’ engineering aspects. This problem has been tackled in a number of ways. Black and Baker’ attempt to side-step the difficulty by focusing on the product development process and dividing it into five stages, each

372 Design Studies Vol14 No 4 October 1993

of which can be described more concretely. However, one of their five stages is itself titled ‘design’, which re-instates the problem. An alterna- tive, used by Davies3, is to render the term more concrete by qualifying it, using a five-fold division into product design, process design, promotional design, design of environments and corporate identity, each of which carries less ambiguity. In the case at hand the latter approach was adopted and the interviews began by asking each executive to describe the importance of each of the five aspects of design in allowing them to make sales, using a five-point scale running from ‘absolutely critical’ to ‘of no importance’. None of the interviewees expressed any difficulty with the terminology and product design was clearly rated most highly in that every interviewee rated it as either ‘5 - absolutely critical’ - or ‘4 - very important’. Opinions on the importance of promotional design and corporate identity varied with the company’s position in the marketplace. Marketlead rated it only ‘3 -of some importance’ while Medone, Medtwo and Smallex felt that their advertising, logos and image were ‘4 - very important’. Only Smallcheap rated the design of promotional materials as ‘5 - absolutely critical’, explaining that purchasers often made their initial choice at home in the winter, and needed to be drawn and held at that stage by attractive brochures. None of the interviewees felt that process design was of any significance, given the craft nature of the production process and the design of environments related only to the interior design of the vans, being an aspect of product design.

3.2 The design process Having established that product design was generally perceived as the most important aspect of design in the industry, the interviews went on to direct attention towards the ways in which design takes place in the industry, and the ways in which it is managed. A first approach was to ask ‘which of the following best describes the situation in your company?’

a) A continuous process of small changes b) Occasional radical redesign of existing products c) Introduction of new products

In every case, the answers corresponded most closely to the first description. In Marklead and Midtwo new models were introduced every year, embodying relatively minor changes. Midone redesigned one of its three product lines each year, while ‘tweaking’ the others. Companies generally aimed to combine continuous small improvements with planned redesigns but had not always done so. In the case of Midtwo the company had experienced some of the difficulties associated with a more radical approach in that the previous Managing Director had completely and

Design management 373

abruptly halted production in order to carry out a radical redesign, which was seen in retrospect to have been unnecessarily disruptive and expen- sive and had been replaced with a prototype shop which devised new product ideas on a continuous basis. In the case of Smallcheap a strategic error in design led to vans remaining unsold and the effective collapse of the company, so that a new management had no alternative to a disruptive halt in production, followed by a radical redesign. (The failure of the previous models was attributed to the fact that the design, including the colourways, created a ‘look’ which was very close to that of vans imported from abroad at very low prices with which the UK firm could not compete.)

3.3 Allocating responsibility for design Evidence from a large UK study’ suggests that representation of design at Board level plays a significant role in the competitiveness of companies and advocates of design have argued that Design Director should become as well established a job title as Marketing Director or Production Directo?‘. On the other hand, the extent of formal organization is often limited in small companies and Black and Baker’ found that in their sample of small engineering and textile firms there was not one single director having ‘design’ in his title, even in companies which were manifestly well oriented towards design. In the caravan firms design was clearly a Board-level issue and all but one of the firms had discussed design as an item on the Board’s agenda. (The exception did not even have formal Board meetings.) The allocation of responsibility for design always involved a director, although there were variations from firm to firm and across different areas of design. In most cases, the small size of the firms and their correspondingly flat management structures were reflected in the informality of the arrangements. At Midtwo, which had established a prototype shop, product design responsibility was shared by the Managing Director and a cabinet-maker who worked full-time on the prototypes, while promotional materials and corporate identity were subcontracted to an independent agency. Midone had a similar arrange- ment, whereby product design was the province of the Managing Director and Technical Manager, but promotional materials were under the control of the Marketing Director. In the small firms, the directors took direct responsibility while stressing the need to involve all of the work- force in the process. In every case but one, design was ‘silent’ in the sense used by Gorb and Dumas” who found that in a wide range of cases responsibility for the design function was taken by staff having a range of

28 Topallan, A The Manage- job titles. The only exception to this pattern was Marklead where the men1 of Design Projects, Associ- ated Business Press. London

company had a Director of Design and Marketing and a permanent design (1980) office having staff with formal design qualifications. Nevertheless, even

374 Design Studies Voll4 No 4 October 1993

here the Managing Director himself took a particular interest in product design for some ranges.

4 Managing the design process In order to structure the discussion on the management of design, interviewees were asked a series of questions which examined planning for design before moving on to consider implementation. In respect of planning, the executives were asked to explain how the need for design work was identified, how design briefs were specified and what links existed, if any between the design brief and market research. -

4.1 Identifying the need for design work Identification of the need for design work was almost universally seen as being driven by market forces and customer-led, rather than being led by the van-builders, which is consistent with the earlier finding that the understanding of consumer needs is of crucial importance29. To some extent the companies’ approach was largely ‘reactive’, the interviewees pointing out that the most convincing indicator of a need for design improvements lay in the build-up of unsold stocks. However, once that position is reached bankruptcy is a real possibility (and had been for Smallcheap) and most of the companies employed a range of intelligence- gathering mechanisms in order to avoid reaching that situation. Informa- tion from customers comes through a number of channels, foremost of which are the owners’ clubs which provide intelligence from loyal buyers. Dealers provide a more broadly-based information network, drawing on uncommitted customers and being quick to point out when some models are seen to be falling behind the competition in some respect. Trade shows also provide market information. While these sources are informal and relatively inexpensive, other studies’have shown that such a multiple- source approach to market intelligence can have a positive impact on design effectiveness. The market intelligence collected from the various sources was evaluated at director level and translated into an imperative for redesign whose urgency depended upon the company’s position and vulnerability in the marketplace. In Smallcheap, which had a previous generation of vans remaining unsold and had been passed into new ownership, the incoming management saw an over-riding need for immediate and radical change. At Smallex, producing a small number of expensive vans selling on hand-built quality, there was felt to be no immediate problem but the Managing Director felt that the time had come to seek an injection of new ideas.

29 Rothwell, R, Schott, K and Gardiner, P Design and the Eco- nomy. Design Council, London

While the caravan firms did use the multisource approach to market (1983) intelligence, indicated by the literature, their use of formal mechanisms to

Design management 375

gather the intelligence was very limited. In common with other findings on UK firrm?, and in stark contrast to foreign companies, the use of formal market research techniques was limited. Information from within the caravanning fraternity was generally collected and processed through ‘networking’ and ‘keeping ears to the ground’, rather than through more structured techniques. Medone had used a questionnaire in connection with an owners’ club meeting but no attempt at all was made to elicit directly the views of consumers other than those already sufficiently committed to caravan ownership to either own a van or attend trade shows.

4.2 Setting design briefs A significant theme in the literature concerns the need to set comprehen- sive and written design briefs in order to ensure adequate communication of the design need. However, in the caravan industry where the design process is incremental, continuous and customer-led it is difficult to identify ‘design projects’ as the work is not easily parcelled into discrete packages. As a consequence it was difficult in the interviews to isolate anything which could be defined as a ‘design brief, despite the evidence9 that the specification of the design brief is of crucial importance in the effectiveness of design work. Marklead supplemented their in-house design team with outside consultants, which necessitated the production of briefs and both Smallex and Smallmid had been involved with the government’s Funded Consultancy Scheme3’, which also required them to set down their design requirements. With these exceptions, however, written briefs either did not exist or were very informal. In one case the Marketing Director defined the brief by explaining that:

the MD tells us to go out and find something more jazzy

Another explained with rather more focus that:

the MD sets the brief, which is that it should be a modern, high quality van, and

easily identified as one of ours. The interiors need special attention as we know that

many of our customers live in their vans for months at a time.

4.3 Implementing design work The implementation of design work may be disaggregated into a sequence of activities consisting of:

30 Roy, R, Potter, s. Cspon, c, B~UCS. M and Walsh, V ‘End 01

l The selection of designers award report to the Economic l end Social Research Council:

The generation of concepts

The hanellta and costs of invsst- l The evaluation and selection of concepts merit in design’ Worldng Paper

l WP-13, Design Innovation

The development of the chosen concept Group. Milton Keynes (1990) l Production and evaluation of prototypes

376 Design Studies Vol14 No 4 October 1993

l Production l Evaluation of commercial success

In practice, as with many management tasks, it is often difficult to differentiate the various steps in the sequence and management of the process may be implicit rather than explicit. This is particularly true in the case of design activity which is often silent, as Gorb and Duma? have noted, in the sense that it is carried out under the guise of a whole range of other functions. Nevertheless, the interviews used the sequential model as a framework for exploring the issues arising in respect of implementation.

With respect to the selection of designers, only Marklead regularly employed consultants from outside the company, using the same design practice over a number of years. Smallex had been approached by a consultant with a view to making use of the Funded Consultancy Scheme and Medone had progressed from the use of an engineering student’s project work on aerodynamic shapes to the more formalized use of a design consultant. Even in these cases, the outside consultants played a relatively minor role and the other firms made no use of them at all. Marklead had an in-house design department and staff with design qualifications but in all of the other cases the in-house ‘design teams’ consisted of workers and managers with other functions. Managing directors often worked with shop foremen or cabinet-makers, or with the entire workforce, in carrying out design work. In one case, which nicely captures the informal nature of the process, the Managing Director’s mother regularly monitored fabrics and furnishing in the shops in order to keep up with market trends. While specialist outside consultants were not a major part of the industry’s design effort, the van companies often made use of their suppliers as a source of design inputs. On interior design, suppliers were asked to suggest co-ordinates and for some components the suppliers were in effect given a design brief as part of the purchasing process.

The generation, evaluation and selection of design concepts were also carried out in a variety of ways, most of which were informal, as found in other industries largely made up of small firms’. One executive described the process by saying that: ‘the MD draws on a fag packet’. Others drew on a range of sources, including copying and amending other firms’ products, files of customer suggestions and worker suggestion schemes linked to bonus payments. The involvement of the workforce was stressed in many cases and it was common practice to ask workers of all types to comment on prototypes. After that initial stage, dealers and agents were invited to comment, after which production would commence.

Design management 377

Given the informality of the design process in the industry, it was not surprising to find that there was very little monitoring or evaluation of the design process itself. Certainly there were none of the sophisticated design project management mechanisms which have been found in larger companies28. Only at Marklead was design activity covered by a budget heading and that was not titled design. The most important mechanism for the control of design activity was externally imposed through the dead- lines associated with the trade shows at which new models needed to be launched if they were to receive adequate exposure.

5 Summary and conclusions Caravan firms operate in a competitive structure which is made unattrac- tive by the extreme ease of entry and the very intense rivalry which exists amongst the incumbent firms. At the same time, the technological environment is one in which technological opportunity is very restricted, the rewards for innovation are limited and they are quickly and easily dissipated through imitation. In that situation ‘more design’ is not necessarily better and companies are obliged to find an approach to design and its management which is as inexpensive and as free from risk as possible. Their response has a number of elements. Firstly, they innovate in small incremental steps, avoiding radical leaps. Secondly, they rely upon multiple but informal and inexpensive sources of market intelli- gence, drawing largely upon the established group of committed buyers. Thirdly, they make use of their workforce, at all levels (including the managing director’s mother) to carry out the larger part of their design work, leaving a relatively limited role for design professionals. In each of these respects the approach to design is determined by the structure of competition in the industry and its technological environment. The implications of this case, then, would appear to be that the analysis of design management cannot adequately be carried out without taking these factors into account. Prescriptions derived from studies which take no cognisance of them, and which do not recognize that these environments may differ very substantially from industry to industry may be seriously flawed.

378 Design Studies Vol 14 No 4 October 1993