“Managing turbulence in economic environment through innovative management practices”

Proceedings of the 2nd International Conference on Management and Economics 2013

Up-thrust in Turbulent Waters:

Innovative Practices in Fashion Designer Entrepreneurship

Nisanka Kusumsiri a, Ananda Jayawardane b

a
Department of Textile and Clothing Technology, University of Moratuwa, Katubedda, Moratuwa
nisankalk@gmail.com; nisankak@uom.lk
b
University of Moratuwa, Katubedda, Moratuwa, Sri Lanka
akwj@uom.lk; akwj.uom@gmail.com

Abstract
Fashion designer entrepreneurship in Sri Lanka has developed at a significant rate within the last decade. As in
any other business, designer entrepreneurs have faced many challenges in today’s turbulent business
environment. This paper focuses on critical challenges induced by turbulent business environment and fashion
designer entrepreneurs’ innovative management practices to overcome those challenges. Through qualitative
method of in-depth interviews, six participants shared their experiences and perspectives on critical turbulence
factors and strategies they have implemented to overcome those challenges that have contributed to their
business success. Analysis consisted of a coding system to generate similar themes and categories supported by
SQR Nvivo 07 software. Findings revealed seven critical factors related to the environment turbulence as
perceived by the participants and seven distinctive strategies implemented by the participants in response to
those turbulence factors. The seven strategies can be broadly categorised under ‘Product/Market Innovation
Strategies’ and ‘Relationship and People Strategies’. This paper contributes to the creative industries sector in Sri
Lanka, and particularly to the fashion designer entrepreneurship in terms of identifying strategies that can be
implemented by the entrepreneurs and policy makers in response to unfavourable and turbulent environments.
Data collected in this study were restricted to the fashion designer entrepreneurship. However, the same
combination of management practices and strategies would be contributing to other entrepreneurship sectors,
and therefore further exploration of this study is encouraged.

Keywords: Environment turbulence, Fashion designer entrepreneur, Innovation, Relationship strategies

1. Introduction
‘The fashion design industry in Sri Lanka was almost non-existent about three years ago whereas today the local
stores are earning around US Dollar 10 million annually. The local retailers of the local fashion labels have the
potential to reach US Dollar 500 million in the next few years’ (Dias, 2011).

Presently, the fashion design sector of the country is supported by a substantial number of private and university-
based design programmes, one fashion business incubator, and an array of local retail outlets providing
opportunities to market access, industry based training, and development initiatives. With the increasing
development in the design education sector and numerous national and international events including Colombo
Fashion Week, Sri Lanka Design Festival, Young Fashion Entrepreneur Award, and Ethical Fashion Award;
many novice entrepreneurs ‘debut’ into fashion business by forming own brands and venturing their small or
micro enterprises (Careem, 2012). Moreover, there are a few well-established entrepreneurs who have been
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pursuing their enterprises in selected niches with strong international presence as well. Today, Sri Lanka has
developed a creative fashion industry of its own, with a range of styles and innovations.

Market research indicates lucrative opportunities in the local market for self-expressive products. Self-expressive
products market in Sri Lanka is growing over a rate of 30 per cent’ (Thajudeen, 2011). This trend marks exciting
opportunities for local fashion designers to explore into different avenues of fashion, not merely as a piece of
clothing, but also as a self-expressive product.

2. Problem
While these market trends show exciting opportunities for the local fashion designer entrepreneurs, they have to
focus on contextual factors in the environment in order to develop viable businesses. Fashion industry is ‘widely
portrayed as a tough industry’ (Mills, 2011) where remain cutting edge and creatively ‘relevant’ within subjective
and volatile markets is extremely challenging (Crewe & Beaverbrook, 1998 cited in Mills, 2011). Fashion designer
entrepreneurs, fuelled by the symbolic nature of the industry and by cyclical nature of fashion could be said to
operate in a turbulence environment. Therefore, fashion designer entrepreneurs have to use innovative practices
to be successful in turbulence environments.

The global fashion designer entrepreneurship is a billion dollar industry representing the third largest value
among all the creative industry sectors (Blakley, 2010). While there are significant numbers of research
conducted in the domain of fashion designer entrepreneurship, there is almost no research conducted on Sri
Lanka’s creative fashion industry. Available literature in this domain in Sri Lanka is limited to popular literature,
weekly magazines and television programmes. The purpose of the study presented in this paper therefore is to
apply a systematic and methodical approach to identify the ways in which fashion designer entrepreneurs use
innovative practices to achieve their entrepreneurial objectives in turbulent environment. This paper shares
fashion designer entrepreneurs experience and reports innovative practices they perceive as contributing to their
success in turbulence economic environment.

3. Literature Review
The literature review of this paper focuses on three aspects. Firstly to form a basic introduction to fashion
designer entrepreneurship and secondly to understand the concept of entrepreneurship and entrepreneur with
reference to the specifics of Sri Lanka’s fashion designer entrepreneurship in order to understand and access to
right people for the study. Thirdly, the implications of environment turbulence in reference to the fashion
designer entrepreneurship has been examined, and this has provided a starting point for studying Sri Lanka’s
fashion designer entrepreneurs’ innovative practices in turbulent economic environment.

3.1 Creative Fashion Industry

Different countries and regions have defined fashion designer entrepreneurship according to their pertinent
market contexts. Among these numerous definitions, the criterion developed by New Zealand Institute of
Economic Research has been identified as closely relevant to the Sri Lanka’s context. Therefore, fashion industry
entrepreneurship has been identified based on the criteria that ‘firms or individuals involved in clothing and
having a primary focus on design, as distinct from manufacture of clothing’ (Walton & Duncan, 2002).

3.2 Entrepreneurs and Entrepreneurship

Extant literature identify entrepreneurship and entrepreneur with many and varied definitions. Drucker (2000)
cited in (Tipu & Arain, 2011) proclaim that entrepreneurship as comprising of five parameters: creating new
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markets, delivering value to customer, providing something new, changing customer value, and process
innovation. In the same vein, entrepreneur has been identified as individual responsible for the process of
creating new value (an innovation and/or a new organisation) (Bruyat & Julien, 2000). Analyzing numerous
other definitions of entrepreneurship and entrepreneur (Kusumsiri & Jayawardane, 2013), Drucker’s and Tipu
and Arain’s definitions appear to have similar attributes with majority of the perspectives. Furthermore, these
two definitions of the entrepreneur and entrepreneurship were found to be aligned with the creative nature of
fashion designer entrepreneurship and hence entrepreneurial fashion designers were identified based on the
criterion defined by Drucker (2000); Bruyat and Julien (2000) and Walton and Duncan (2002).

3.3 Environment Turbulence

The influences of the firm’s environment in business practices have been well documented in the management,
marketing, and organisational behaviour literature. Environment turbulence refers to the rate of unpredictable
environmental change (Dyer & Ha-Brookshire, 2008). Measures of environment turbulence have been studied by
many researches (Covin & Covin, 1990; Covin & Slevin; 1989; Naman & Slevin (1993) cited in Solymossy, 1998;
Lumpkin & Dess, 1996).

For most entrepreneurs including fashion designers, influences of the complexity, turbulence, and change can be
greater, especially when time drives an industry. Fashion designer entrepreneurship, fuelled by the cyclical nature
of fashion, is more time-driven, and accelerated than any other industry (Dyer & Ha-Brookshire, 2008). Fashion
designer entrepreneurship is characterised by complex market relationships, complex supply chains,
unpredictable environmental shifts, and intense competition for scarce environmental resources, coupled with
accelerated business cycles (Dyer & Ha-Brookshire, 2008; Malem, 2008; McColl & Moore, 2011; Mills, 2011).

Acceleration of the business cycle have created challenges for fashion designer entrepreneurs in terms of
technology changes, consumer demands, competition, and a host of economic turbulent factors that have created
time pressures. The fashion industry is a highly competitive industry, where product life cycles are short,
economies gained by product differentiation are built on brand image and product styling can be quickly imitated
(Richardson, 1996 cited in Malem, 2008). Fashion designer entrepreneurs have identified different innovative
practices including product innovation as responses to the environment turbulence. (Wenting, 2004 cited in
Malem, 2008). Relationship and network strategies also found to be important to survive in challenging
environments (Mills, 2011).

4. Study Design and Methodology

4.1 Qualitative Interviewing and the Instrument
Qualitative method of interviewing was used to investigate in-depth different innovative practices and strategies
implemented by the fashion designer entrepreneurs as responses to the environment turbulence. The research
design facilitates fashion designer entrepreneurs to express their inner views and perspectives of ‘how’ and ‘why’
a particular innovative strategy was used rather than the results obtained using less meaningful labels such as
‘yes’ or ‘no’. (Gamage, 2004; Gunaratne, 2008; Mills, 2011).

A semi-structured interview guide focusing on environment turbulence measures and innovative strategies that
have been identified in the literature review was used in the in-depth interviews. Table 1 shows how the key
factors identified in the literature were used as a basis for the constructs used in interviews for this study. The
interviewees were asked how they reacted to these turbulence factors in order to remain in the business and to be
successful.
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Table 1: Link between factors identified in literature and constructs used in interviews for this study
Factor identified in literature Constructs used in
interviews
The rate at which market practices of the firm have to be changed to keep up with Competition, competitive
the market and competitors strategy
The rate at which actions of competitors are predictable or unpredictable
The nature of the demand and the consumers’ tastes in related to the ability to Consumers’ taste, attitude
predict or unpredictable and predictability
The rate at which products/services get obsolete in the market Product related aspects,
The rate at which product design/technology/process change in major ways or well Influence of trends
established and not subject to very much change
The investment and market opportunities presented by the external environment External environment
The rate in which environmental threats can affect the survival and well-being of threats, challenges and
business support
The external environment’s overall impact in business

4.2 The Sample

The sampling for qualitative research should be ‘purposive’ rather than random (Hui, Csete, & Raftery, 2006;
Mills, 2011). A purposive sample of six entrepreneurs was selected for in-depth interviews. Seeking maximum
variation, the sample consisted of three start-up fashion businesses and three established fashion businesses.
Following Mills (2011), the start-up phase was defined as being within seven years of label launch. Table 2
represents an overview of the interviewees participated in the study.

Table 2: Overview of the selected fashion designer entrepreneurs

Background Rspt A Rspt B Rspt C Rspt D Rspt E Rspt F
Start-up year 2009 2003 1974 2006 1987 2000
Previous
experience Yes Yes No Yes No Yes

Designer’s Bachelors MBA Diploma in Bachelors Diploma MBA

education Textile International Textiles and Fashion
Technology Business Marketing Design
Ways of Online, Online, retail Retail Retail outlet, Online, Service
distribution and Through one outlets, outlets, bespoke own retail
selling retail outlet, export export, outlet
export, bespoke
bespoke
Number of One Four One One Core brand Four
brands/labels/ and five
services diffusion
brands
Products/Services Women’s wear Men’s wear Women’s Women’s Women’s Design
Women’s wear wear wear education,
wear Design
Footwear events,

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Event service livelihood

development
Speciality Sustainability, Varies Batik and Handloom, ‘Classic’ Creative
industry post- silk textiles with industries
waste painting craft origin
Size of business Small Small- Small- Small Small- Small-
(Taskforce, 2002) medium medium medium medium
Rspt = Respondent
 Respondent B and F have conceptualised the two main events that influenced fashion and creative industries
in Sri Lanka. Rspt F does not own a product brand. Nevertheless, considering Rspt F’s significant influence in Sri
Lanka’s creative industry sector as an entrepreneur (design education) as well as a support provider, Rspt F’s
opinions were considered as significant in this study.

4.3 Data Analysis

Fieldwork took place between September and November of 2012. Interviews were conducted in respondents’
design studios and offices by the first author, with each interview lasting for about 30 to 50 minutes. The
interviews were conducted in English medium, audio recorded with the verbal consent from the interviewees and
transcribed for analysis purpose. Written transcripts were analysed through a process of comparing and
contrasting to identify significant themes and categories, both common and distinctive, underlying the
respondents’ views (Gamage, 2004; Gunaratne, 2008; Hui, Csete, & Raftery, 2006). QSR Nvivo version seven
was used to organise the interview transcripts, codes and themes. A review of the transcribed interviews indicated
repeating ideas, suggesting information saturation (Gunaratne, 2008). In the following discussion of results, an
interpretative summary, supported with illustrative quotes has been provided. This is intended to help readers to
understand the ways in which respondents answered the questions, the meanings of the significant themes and
categories, and most importantly the strong feelings the respondents held regarding ways in which they work in
turbulent environment (Hui et al., 2006).

5. Discussion and Conclusion

5.1 Influences of Turbulence Factors
The turbulence factors that have been identified by the respondents as being critical in their businesses and the
innovative strategies they have implemented in response to environment turbulence are summarised in Table 3.

Table 3: Summary of key turbulence factors identified by the respondents and their innovative strategies in
response to environment turbulence
Critical turbulence factors identified by respondents Innovative strategies
Negative Product/Market Innovation
 Highly competitive environment induced by market • Competition is viewed positively as a
drivers of ‘price versus quality’ motivation to do well in business and to
 Consumer attitudes and changes in hierarchy of needs in drive the market forces.
fashion • Strategically identifying market gaps
 Clothes as a ‘disposable’ product • Diversification
 Lack of organisational-level support • Continuous innovation
 Challenges in access to resources • Originality and wearability versus
 Unfavourable market conditions including market following fashion trends

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infrastructure being non-supportive to design aspects Relationship and ‘people’ strategies

Positive • Relationship-based human resources
 Present environment is conducive to entrepreneurship strategy
with many unfulfilled market gaps • Social and network support to overcome
challenges

5.1.1 Competitive Business Environment

All respondents identified the present market environment in Sri Lanka as highly competitive. Respondents
identified the competition as having two main implications in their business: (1) competitors imitating their
products and; (2) challenges in terms of market demand for good quality products with designed aesthetic appeal.

Competitiveness in fashion market is induced by fast fashion, which focuses on offering new clothes in
comparatively less quality and at cheaper prices and also changing styles as frequently as possible (Bruce & Daly,
2006). Rspt E exemplifies: ‘We [market] are not appreciating those fabulous, beautiful, well done, quality
garments. So appreciation of doing a beautiful product with a good fabric is very difficult to do now, because there
are only a few people who would appreciate it.’ Competition in Sri Lankan fashion market is also particularly
induced by surplus productions of the apparel manufacturing industry. ‘The retail infrastructure does not support
fashion. This infrastructure is very much surplus stock’ (Rspt B). Other than the two of the respondents who have
strong craft-oriented product categories, the other four respondents raised that ‘production surplus’ is an extreme
market challenge to them.

The competitiveness in the Sri Lankan market is strongly induced by its price sensitivity. As Rspt B identifies,
‘Our product has a “wedge” which most of our competitor products don’t have, and that wedge cost money to do.
But the wedge is good for comfort. So, to spend more money to do wedge and yet keep it competitive so that
people don’t find it expensive is a challenge’. According to Maslow’s Hierarchy of Needs’, majority of Sri Lankan
consumers’ needs are mainly defined by ‘physiological needs’ and ‘safety needs’ rather than ‘social’, ‘esteem’ or
‘self-actualisation’ needs where use of ‘utilitarian as opposed to aesthetic appeal’ (Fletcher, n.d.). Therefore,
clothing has been identified by the mainstream market as a ‘disposable product’ that can be purchased for a
cheaper price rather than considering its aesthetic appeal and quality.

5.1.2Consumer Attitudes
Respondents also identified Sri Lankan consumers’ attitude and lack of awareness in design also as challenges
for their businesses. Rspt D exemplifies: ‘At that time when I started business, the glamour fashion immured the
real fashion. My fashion was not acceptable, because they were not glamorous… Sometimes I wanted to use local
fabrics like Batik or handloom, but nobody wanted to accept it… Some people wanted to see that I’m using silk
fabric, chiffon fabric or imported luxurious fabrics. I wanted to use real Sri Lankan local materials to create
something very ethnic, very local fashion… And using local materials and also contributing to local trends that
worth the local market’. Rspt F also identifies that: ‘Educating the market and educating the ‘eye’ of the
consumers is a challenge. The consumers’ eye is not sophisticated enough to see the fashion and design situation
here. One of the challenges is that while developing entrepreneurship and new things, we have to also educate the
‘eye’ and develop the consumer parallel’.

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5.1.3Market Infrastructure and Institutional-level Support

Other than the challenges in the market induced by aforementioned situations, Sri Lankan designer
entrepreneurs are also challenged by lack of institutional-level support in entrepreneurship. As Rspt B identifies,
‘There is a very low-level support to entrepreneurship in design. Because right now the country is geared towards
import oriented and lower-level manufacturing oriented culture. Not for design and value added sectors’. Most
Sri Lankan designer entrepreneurs are challenged by ‘access to raw materials and access to higher levels of
manufacturing technology’ (Rspt B,C).

In summary, Sri Lankan fashion designer entrepreneurs are challenged by turbulence factors related to the
competition, consumer, market infrastructure and lack of institutional-level support. The following section
discusses the entrepreneurs’ innovative and distinctive strategies in response to environment turbulence.

5.2 Distinctive Strategies

5.2.1Competitive Orientation and Strategies
All respondents except one (Rspt E) considered competition and competitor activities as being strong motivators
to do well in business. They were even ‘pleased’ that competitors ‘copy’ their products. As exemplified by Rspt D:
‘The competition should be there in a good way, to motivate the market. Now we do have a good competition; to
find the artisans, to find a good market. What happens at the end is that you are gaining your market. You don’t
feel lazy. You don’t feel that “OK you are done”. Still you have to do; still you are motivating’.

One of the strategies identified by the respondents in response to high-competition is ‘strategically identifying
market gaps’ and ‘targeting a specific and well-defined niche market’. ‘I think it’s also important to do something
different. To do a niche thing, which people can relate to, but different’ (Rspt A). Most of the respondents referred
to it as ‘creating a marketable product’. As Rspt E identifies: ‘As a design person I could design the most beautiful
garment which cannot be sold, which is not practical…So my winning thing was I think I really concentrated on
women’s problems, their body shapes and the fact that Sri Lankan consumers’ have different body shapes to the
Europeans’. Fashion designer entrepreneurs’ response to environment challenges by clearly identifying the
market opportunity has also been largely emphasised in the entrepreneurship literature (e.g. Kirzner, 1973).

Product and market diversification is one of the significant strategies identified by the respondents in response to
environment turbulence (Scarso, 1997). All of them maintained the significant identity of the brand offered by
their core-products, even though the market segment for the core product is relatively smaller. However, they all
developed sub-brands and diffusion ranges under the main brand to fulfil the changing needs of the consumers
who are more price-conscious. As Rspt E exemplifies ‘My response to the challenge was that I started these other
sub-brands [names] for younger, cheaper market. But I kept the core product as a niche thing. Because it’s
beautiful and classic and if you buy it you will wear it even in ten years from now’.

All the respondents strongly emphasised different facets of innovation as key aspects to survive in turbulent
environment. They strongly emphasised the need of having a unique and significant identity: ‘Have something
that is quality and something that is completely different to what is available in our country. So it will be only one
of a kind’ (Rspt C). They also very strongly emphasised the need to continuously innovate in response to
competitors imitating their products: ‘You should have the ability to change the design, if competitors copy’ (Rspt
C). Fashion consumers expect and thrive on constant change and so new products have to be available on a
frequent basis. (Bruce & Daly, 2006) Therefore, continuous innovation has also been highlighted as a strategy to
retain the consumer interest: ‘When you have been accepted, there’s a promise that you gave the consumer. You
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have to hold on to that promise to ensure that you are continuously been accepted, and continuously that you are
fulfilling promise. So how do you fulfil promise? You keep refreshing yourself’ (Rspt B).

Another factor that the interviewees identified was that the influence rate of the cyclical nature of fashion in the
local market. As all the respondents emphasise it, ‘being aware of what is in fashion’ does not necessarily mean
that the industry is driven by ‘western’ trends and cycles. Rather, respondents suggest that the market is
influenced by originality and uniqueness in fashion as well as price: Therefore, respondents have implemented a
strategy of maintaining unique identity and creating products which have ‘timeless’ appeal. According to Rspt C:
‘I’m not a person who follows trends dictated by West. I just study it. If I can produce something to satisfy the
client, and if I can produce something where I could sell, I don’t let myself to be restricted by trends’. Rspt E also
suggests a similar approach: ‘So my ranges are kind of getting more ‘classic’ where you can wear it forever. Rather
than going behind seasonal trends, it has to be beautiful. It is beautiful and its worth’.

5.2.2 Human Resources and Relationship Strategies

Respondents have used strong relationship and ‘people’ strategies to overcome the challenges. The respondents
have identified relationship-based human resources practices and they emphasised human resources strategies
based on traditional values of kinship and social responsibility in order to retain skilled workforce within the
business. A relationship-based human resources practice was also one of the strongest indications of emotional
fulfilment and satisfaction for the respondents. Rspt C exemplifies: ‘When they fall ill I have always channelled
them. There was such incident recently. Then the moment I came, she [employee] came and worshiped me. For
me, that is very important in life. To look after them. This staff has worked with me for the last thirty years. We
all grew up together. So they know exactly what to do if I tell. Because if I get a new one, it’s very difficult, because
I have to train them’.

The respondents identified the need to continuously encourage and support their employees, to educate them and
to guide them, in order to continuously improve the product quality and aesthetic appeal to fulfil market
demands. However, rather than organised training programmes and corporate human resources practices,
respondents achieved this requirement by relationship-based human resources practices. Rspt D identifies as: ‘I
have to perform very well to show their [artisans] skills; I have to show their results…I try to pay more to motivate
them, to keep them for myself and to show them their strength. The backbone of my brand is the craft people. I
always try to convince them and also educate them. Because sometimes they don’t understand what I need,
sometimes they can’t understand what the contemporary need is. Sometimes they put so much of effort and time
to create such complicated creations that don’t have any marketable value. But I trained them and I changed it
actually, by showing how to do very simple, very commercial, design elements. Now they know how to create
something simple, elegant and how to sell that into very good prices’.

Except for one respondent (Rspt C), all the other respondents claimed that they did not have sufficient
organisational-level support at start-up phase. While the market infrastructure and organisational-level support
appears to be relatively unfavourable to designer entrepreneurs, it appears from the interviews that designer
entrepreneurs have developed distinctive strategies to overcome those challenges. Rather than working against
the challenges, they have identified innovative practices that would lead them towards success, ‘permeating’ the
unfavourable conditions. All the respondents have used their social network support in response to low
organisational-level support. They have used local and international social networks to develop their brand
images. As a result, the social image of the designer entrepreneur and the brand image have helped the
respondents to gain local market’s recognition and to change the consumers’ attitude. Rspt D exemplifies that: ‘I
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had to make a very big image. I had to show the value of these local fabrics. My foreign fashion shows and foreign
presentations were very helpful for me to break the traditional mentality of the local people. Now the people
accept it and they want to wear it’.

6. Conclusion
The in-depth interviews with fashion designer entrepreneurs revealed several turbulence factors that the
respondents perceive as critical to their success. Those factors include high competition in the market
environment, mainstream consumers’ attitudes towards fashion as a utilitarian product rather than an aesthetic
and self-expressive product, the place for design aspects among mainstream consumers’ hierarchy of needs and
lack of organisational-level support as well as relatively unfavourable market infrastructure for design. However,
the respondents revealed that designer entrepreneurs have identified a number of distinctive strategies in
response to the turbulence factors in the present business environment. In many cases, the respondents have
implemented innovative practices to evade unfavourable circumstances and even considered economic
turbulence in environment in a certain extent as necessary for business growth. The prominent innovative
strategies are relevant to product/market innovation, unique design identity and strong relationship strategies.

Majority of the respondents also strongly felt that the present market environment in Sri Lanka as highly
conducive to entrepreneurship. ‘The climate is very conducive at the moment for entrepreneurship. We live in a
country that has so many needs at the moment. So you live in a market that is still not fulfilled. And that has a lot
of opportunities for entrepreneurship’ (Rspt F). In that sense, not only that the respondents have identified
innovative strategies in response to environmental challenges, but also they have identified favourable market
dynamics for entrepreneurship.

This paper is based on an initial exploratory phase of an ongoing study where the second phase will be a
quantitative survey. The outcome of the first phase coupled with the literature review will be used to develop the
conceptual framework for the survey phase of the study. Therefore, outcome generated in the second quantitative
survey phase will be helpful to generalise these research findings to a larger population of fashion designer
entrepreneurs.

Acknowledgement
This study could not have been undertaken without the contribution of the six respondents. The authors
gratefully acknowledge them for their time and commitment to participate in the study.

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