Designer Michael Alvisse, of the Schamburg+Alvisse duo (featured in DQ#52), speaks with Sophia Watson about the value of finding the right supplier to partner with, and the impact this had on their business.
February 10th, 2014
Could you give me a brief background on how Schamburg+Alvisse operates business wise? (e.g, manufacturing/supply/retail channels etc)
These days, Marc + I work solely on our independent design + branding studio. We’re still working on a name for it, so any suggestions will be welcome!
Why was the decision made to partner with Zenith?
We partnered with Zenith so we could focus more on design + branding work. We also wanted to ensure existing S+A customers would continue to receive their orders on time, on budget, and with the quality standards they’ve come to expect from S+A. Zenith have a proven track record for reliability, plus they’re keen to build their Australian loose furniture offering.
How was the dynamic of the relationship established? What is Zenith’s role in your business?
Marc + I are very clear about what we look for in a partnership:
1) GREEN MANUFACTURING MUSCLE:
We look for a savvy management team committed to green manufacture and ethical business practise. A partner needs to demonstrate an unwavering commitment to globally credible eco certification systems such as the Forestry Stewardship Council and Good Environmental Choice Australia.
We look for a no nonsense business style with the blend of smarts + humility needed to continue earning the trust of S+A’s clients.
3) GLOBAL REACH:
We look for a team with a strong global supply chain capable of reliably keeping customers happy. We also look for a team with the resources and skills to successfully expand S+A globally.
Zenith tick all these boxes.
What were some of the challenges in developing the partnership?
Marc + I were aware from Day 1 that Zenith are a self-professed “meat + veg” workstation producer, moving strongly up the brand quality ladder. We find it refreshing that whilst Zenith are at the top of their game, both Zenith and S+A are mindful of our respective limits.
How did you operate pre-zenith?
Before partnering with Zenith, S+A were a classic “vertically integrated”company. Which in plain speak means Marc + I were responsible for e.v.e.r.y.t.h.i.n.g. Whilst to an outsider we looked like “eco furniture designers”, in practise, 90% of our time was spent brand building, selling and manufacturing. By “brand building”, I don’t mean choosing nice fonts and art directing pretty product photos. To earn and retain the trust of the likes of Woods Bagot, Geyer and Westpac, we need to consistently communicate a compelling message that engages our formidably sophisticated customers. We need to consistently produce fresh designs that are durable and have rock solid eco-credentials. Finally, we needed to magically deliver these on time, on budget… and with a smile on our faces!
What impact has the pairing had on your business?
Now that Zenith have taken over S+A’s manufacture and sales, S+A’s creative productivity is at an all time high. We enjoy working with Zenith because they respect our independence, and we respect them as a business and as people. Zenith’s big-picture vision, can-do culture and consultative macro management style are a tribute to their leadership team. Which is fortunate given my allergy to micro management.
Did the partnership effect the basis of your business model? Why/why not?
Yes, the partnership has transformed the S+A business model:
Marc + I have chosen to retain 100% ownership of our design + branding studio and have promised to offer Zenith first rights to new commerical designs for several more years.
Personally, design + branding is the work Marc + I enjoy most. Strategically, we see “off message” design + branding as a threat to long term brand value, so retaining control over these gives us a competitive advantage in the global market.
Has Zenith’s presence in your company impacted on the position of your brand within the market? Why/why not?
Good question Sophia…
The way I see it, customers value authentic brands. Authentic brands have a compelling, consistent story customers want to engage with year in, year out. Many people believe they can create… and maintain an authentic brand. The reality is few succeed.
Holden Australia just recorded their lowest sales in 19 years, losing $152.8 million despite a record high new-car market and handouts of $73.5 million. Audi and Porsche on the other hand, just recorded profit margins of $5000 – $24,500 per car. Porsche’s current profit margins average 18.4% of sale price. Perhaps Audi + Porsche know a thing or two about building enduring brand value that we can all learn from?
Coming back to Zenith’s impact on S+A’s brand position, frankly, it’s a little too soon to say. Remember this is a two-way street, so both brands will affect the other’s position. For now, we’re satisfied S+A sales and margins are holding steady in a tough market.
We’ll have more clarity of the bigger picture when we complete a customer survey in late 2013, though we’re confident there’ll be good reason to celebrate two years of the Zenith / S+A partnership.
What are you hoping the outcome will be for the future of S+A and Zenith? What does the future hold?
We’d rather let the future speak for itself.
Right now S+A and Zenith are working together to deliver several exciting ranges to market. If we collectively continue to satisfy our customers and communicate with them in ways they find compelling, the futures of S+A and Zenith will indeed remain bright.
Schamburg + Alvisse
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