Abstract
The clothing industry has constantly been evolving by introducing new business concepts, the invention of new materials, design methodologies, innovative manufacturing processes, and marketing strategies. Creative ideas of the design process influence the work of fashion designers. New consumer patterns have risen, showing a bias toward e-commerce instead of traditional “Brick and Mortar” models. Globalization has influenced the industry's supply chain, marketing, and sales aspects. Recently, pandemic like COVID-19 has impacted consumer buying capacity and behavior. Awareness about the environment has increased focus on a circular economy with sustainable business models. In this chapter, we will be reviewing factors that influence the business and marketing of design and light.
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7.1 Introduction
The clothing industry has constantly been evolving by introducing new business concepts, the invention of new materials, design methodologies, innovative manufacturing processes, and marketing strategies. Creative ideas of the design process influence the work of fashion designers. New consumer patterns have risen, showing a bias toward e-commerce instead of traditional “Brick and Mortar” models. Globalization has influenced the industry's supply chain, marketing, and sales aspects. Recently, pandemic like COVID-19 has impacted consumer buying capacity and behavior. Awareness about the environment has increased focus on a circular economy with sustainable business models. In this chapter, we will be reviewing factors that influence the business and marketing of design and light.
7.2 Business Models
The clothing industry is continuously evolving based on the changing dynamics of economics, global politics, and customer preferences. The industry needs to adopt a business model that enables it to be profitable and sustainable. The business models are designed to derive economic value from technological inputs. The main elements of a business model are given in Table 7.1 (Chesbrough, 2007).
7.2.1 Perspective and Constituents of a Business Model
Different authors and business theorists have differently interpreted the word “business model” or proposed different meanings of the word. It also is confused with business terminologies of strategy, business concept, economic model, revenue model, etc. (Morris et al., 2005). Authors provide broad and often contrasting explanations about the constitution of the business model (Amit & Zott, 2001; Bohnsack et al., 2014; Chesbrough, 2007; Magretta, 2002; Mason & Spring, 2011; Osterwalder & Pigneur, 2010). Morris et al. (2005) have reviewed different perspectives of the business model. The context provided by different researchers and the focus on specific components has been reviewed in detail, focusing on the nature of data used to arrive at the perspectives.
The business model provides a holistic framework that can be applied within the context of the industry. Understanding and application of a suitable business model are essential for the clothing industry. Chesbrough (2007) highlights the combination of clothes, design, and its function as a significant value proposition to the customers. The potential customers are identified by using the scientific method to identify market segments that would use the outputs of the clothing industry. The efficiency of the value chain would result in the company achieving its business objectives comprising of usage of raw materials, innovative production techniques, customer value creation, and being sustainable. Some of the significant factors that influence the outcomes are cost optimizations, competitive strategy, and the business’s unique value proposition. Having a suitable business model enables companies to deal with textile products and solutions (Table 7.2).
7.3 Design
Business is driven by the ability to garner a competitive advantage over its competition. In the textile industry, which is driven by innovation and creativity, design plays a major role. There is an increased interest in furthering the envelopes of design which will ultimately lead to competitive advantage and business profitability. The design process contains the sub-discipline of textile design, and it is essential to evaluate the attitude and values that drive the innovation process (Valentine et al., 2017).
Textile design process thinking is guided by emotive, haptic, sensorial, and tactile qualities (Valentine et al., 2017). Due to the traditional and ancient roots of the textile industry, designers have followed the same methodology with very minor deviations introduced organically. However, this has changed in the digital age with the invention of smart materials (Worbin, 2010) and changing fashion and quality trends of consumers. The necessity for sustainability also increased the changing landscape of textile design (Thackara, 2013). Textile designing has even adopted an “open-source” approach, probably borrowed from Information Technology practices. An ETextile Summercamp’s Swatchbook Exchange is an open-source platform where the designers freely share the physical work ETextile samples (ETextile, 2021).
7.3.1 Understanding of the Design Process
Design is a continuously evolving process. Design improvements drive its evolution or address the changing demands. The demand is the constant inventions of new materials, innovation of production methodologies, and changing global politics. The demand is influenced by the customers who have varied needs which change with contemporary trends.
The strategy of companies drives the design process. It is increasingly considered a multi-disciplinary activity that involves organizational structures (Bertola & Teixeira, 2003). This has been dealt with in detail in the study of design management (Libânio & Amaral, 2017). Design management is a holistic umbrella that integrates design, development, implementation, and execution to achieve business objectives.
7.3.2 Levels of Design Management
Researchers have endeavored to develop models that adequately represent the design management process. They developed new models or improved on earlier models by incorporating the changing environment. It can be said that the design management process is divided into three different levels by different researchers.
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Strategic
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Tactical
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Operational.
Borja de Mozota (2003) defines design as a core competency to a company's strategy while being an administrative competence tactically and economic competence operationally. Best (2006) provides an alternative perspective where tasks, plans, and global policies are defined strategically, teams, processes, and BU systems tactically, and the physical and tangible products, services, and experiences operationally. Wernerfelt (1984) describes strategic resources for value creation as an interplay between tangible and intangible assets like people, process, technology, organizational structure, brand, etc.
7.3.3 Models of Design Management
As described earlier, the design management process cannot exist in a vacuum. It is driven by the collaboration between individuals, teams, and organizations. This collaboration should be supported by a strong process and technology for sharing the knowledge. Such integrated systems will contribute to the success of the design outcomes. The factors that influence a design professional are:
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1.
Leadership (Lee & Cassidy, 2007)
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2.
Decision-making autonomy and design competencies (Kang et al., 2015)
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3.
Knowledge sharing (Kleinsmann & Valkenburg, 2008)
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4.
Entrepreneurship (Gunes, 2012)
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5.
Communication, integration, and teamwork (Girard & Robin, 2006).
7.3.4 Design Management Modes
Design management modes have also evolved over a while. Claudia and Alexander (2014) have compared different modes of design management (Table 7.3). It fundamentally compares the four modes by differentiating by different parameters like goals of the design management process, mode/attitude of the design management process, organizational processes that support the design process, capabilities to design, people talent and leadership, and value creation through corporate strategy.
Lucerne Design Management Model provides a detailed relationship between multiple levels and related activities (Claudia and Alexander 2014). This model contains intrinsic details of essential processes, control tools, stage gates, and key performance indicators (Fig. 7.1).
Textile design requirements need to consider emotive, comfort, haptic, sensorial, and tactile qualities. It is progressively being referred to as “smart” in the context of new inventions and techniques (Igoe, 2010). The factors associated with design (Fig. 7.2) have been outlined in the mapping of parameters that define the relationship between design and designers (Eckert, 2014).
7.3.5 A Framework for Training and Integration of Design Management
Apparel product development requires an integrated and multi-disciplinary approach to result in professional designs. Libanio and Amaral (2017) provide a framework that can be used for the learning and development of design management stakeholders. They proposed a framework of competencies and evaluation mechanisms for design management. This approach may be emulated by organizations specializing in apparel. Their conceptual model illustrated (Fig. 7.3) shows complex relationships among individuals, teams, and organizations. It showcases the scenarios of the external environment influencing the organization’s structure.
The development of new collections consists of six phases according to the framework proposed by Libanio and Amaral (2017). They are known as determinant phase activities (DPA) (see Table 7.4).
Libanio and Amaral (2017) defined a framework of phases and professional design activities related to product development and have mapped the key stakeholders, from the perspective of the apparel industry. Borja de Mozota (2003) recommends methods for the integration of design across the organization. Kotler and Rath (1984) encourage the participation of designers in all stages of product development.
7.4 Competing in a Globalized World
The ultimate success of the products that undergo the detailed design process is to stand the scrutiny of the end customer. In recent times, consumer trends have been influenced by the concept of globalization which has completely changed the dynamics of supply and demand. Any customer from any part of the world has to access the products produced in another corner of the world. World economics is driven by the consumers’ need for the best products and the providers’ ability to provide the same. Global policy-making bodies have recognized this need and have encouraged trade agreements and free trade zones that allow unhindered business across the world. To compete in this world economy, having a well-defined competitive strategy becomes imperative. Different researchers have listed sets of criteria that enhance competitive strategy. Being competitive is a necessity for textile companies to derive profitable and sustainable growth. While Hill (2000) identified manufacturing as a competitive strategy, Grant (1991) describes competitive advantage as a balance between the resources and capabilities of an organization (Fig. 7.4).
Textile companies can derive competitive strategies through various means. Depending on the priority of the organizations, the strategy can be deployed in different contexts. Table 7.5 contains different categories proposed by various researchers.
For the textile companies to be successful in a globalized business environment, they have to build competitive advantages that will help them to navigate the competition that is not limited by geographical boundaries.
7.5 Branding in Textiles
The textile industry does not have many entry barriers. It is fairly low cost, and in a globalized world, textile companies need to establish their presence in the market. Presence in the market is driven by the ability of the consumer to recollect a brand. Keller (2003) provides details of connections between brands and their meanings given in Table 7.6.
Unique brand identity is a necessity for textile companies to compete. A company’s brand identity helps its customers to recognize it and get positive associations. That emotional connection ensures customer loyalty and profitability in a competitive marketplace. Textile and apparel companies need to have a well-defined brand strategy supported by its distinct features like vision, mission, and values. It might be symbolic patterns, name, logo, and interplay of graphics and colors. The distinct image elevates recognition and translates into recognition and prestige of a brand in the market, thereby driving market share and profitably (Longwell, 1991). Bruer describes the differentiation strategy in textile and branding in Fig. 7.5.
7.5.1 Brand Identity
The identity of a company that helps the users to recollect the unique features of a service or product is the first step toward customer acquisition and retention. Leo Bernett has provided five dimensions that influence brand identity (Randall, 2002). It is relevant to all domains including textile and apparel (Fig. 7.6).
Value addition to the brand is based on its classification, market position, type, and other criteria that influence the end customer opinion and experience as given in Table 7.7.
The textile companies competing in such a low-barrier entry industry need to create a niche that will allow their customers to recognize their brand and elevate the opportunities for customer acquisition and loyalty.
7.6 Customer Value Proposition (CVP) Using Omnichannel in Textiles
Textile companies, by default, provide value to their customers. To crystallize the value provided to the customer, a strategic tool called customer value proposition (CVP) is used. It helps to communicate the exact value proposed by the company and derived by the customer. The life cycle of CVP is provided in Fig. 7.7 (Payne et al., 2017).
Textile companies have typically marketed their products through traditional marketing channels. Off late, there is a need to adopt digital channels to reach customers. The recent pandemic has accelerated the need to adopt digital channels because of the movement of the potential customers from visiting “Brick and Mortar” shops to online malls. There is increased adoption of an omnichannel model to develop a competitive advantage. There is the continued integration of multiple channels into a centralized, optimized omnichannel to provide unique user experiences, both online and foot sales. The companies strive to develop strategies that would improve the consumers’ online experiences and encourage the personal participation of their consumers and their continued engagement with the company (Lorenzo et al., 2020). Omnichannel provides up to 40% of the business for this sector. There are three buyer profiles (Table 7.8) identified in Spanish Observatory Report (Spanish Observatory Report, 2016).
In recent times, fashion consumers prefer to research and compare multiple channels to access a brand before making a purchase decision (PWC, 2016). The sources of the information search are:
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Brand’s website
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Online store
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Recommendations from friends and family
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Forums and blogs.
According to PwC, while physical stores continue to be the preferred destination of consumers, the percentage of omnichannel is continuously increasing. Consumers prefer more access to the brand. Spanish Fashion Observatory (Spanish Fashion Observatory, 2016) has found that more than 80% of online shoppers consult brand websites and apps and more than 50% refer to social networks.
7.6.1 Managing Customer Relationships
Managing relationships with the customers is the foundation of any business that intends to remain profitable in business. In the connected world, we live in, word-of-mouth, social media chatter, forums, and blogs play a major role in influencing the purchasing decisions of the customers. So, the business has an excellent motivation to pursue different means to manage those relationships. Adoption of CRM provides the following benefits to the organizations:
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Identification of the right customers (Ellatif, 2007)
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Integration of CRM into business processes
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Use CRM to gain a competitive advantage
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Focused on marketing campaigns
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Understand and serve customer needs
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Development of the right product and service
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Individualization of customer support
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Increasing reach through omnichannel
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Track customer behavior and preferences
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Constantly improve quality of product.
Farhan et al. (2018) investigated and defined the critical success factors (CSF) in the implementation of a CRM (Table 7.9). The CSFs need to be considered to automate CRM activities and thereby achieve company objectives.
Heiskanen and Jalas (2003) has referred to a new called product service systems (PSS). PSS is used for the cohesive delivery of products and services by an organization. A PSS typically utilizes the concept of operational improvements rather than capital inputs. It focuses on not just finances but also improvements of existing products and services through iterative developments. It is aimed to reduce consumption of natural resources while increasing product quality and customer satisfaction (Heiskanen and Jalas, 2003). Due to the larger objective of PSS to reduce environmental impact, clothing is certainly an area of interest. It is likely to face challenges of trust deficit, ease of use, and price (Armstrong et al., 2015). Three types of PSS can be considered in the context of textiles. Based on the types, we can imagine various scenarios that apply to the textile industry (Table 7.10).
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Product oriented (PO)
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User oriented (UO)
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Result oriented (RO).
Overall, the textile industry has an opportunity to balance customer relationships with its social responsibility. Considering new business models like PSS enables it to attract customers who value the responsible approach of the businesses. Automating CRM further strengthens the bond between the company and the customer.
7.7 Technology as an Enabler
Technology is speeding up the evolution of business across all industries. The innovations in the technology domain have created opportunities to improve efficiencies and cost optimization. In a competitive textile market, any possible optimization can provide a competitive advantage. The concept of Industry 4.0 can bring about revolutionary changes to the industry. Based on Kearney’s definition of Industry 4.0, there are four key technologies namely (Hidayatno et al., 2019).
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(1)
Data, computational power, and connectivity
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(2)
Analytical and advanced intelligence
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(3)
Human–machine interaction
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(4)
Advanced manufacturing methods.
In the example of textiles, Table 7.11 outlines the possible changes that Industry 4.0 can bring.
Papahristou et al. (2017) outline the quantifiable benefits that IoT can bring to the fashion industry. It is expected to bring improved ROI to the business while bringing more value additions to the end consumer (Harrop, 2016). IoT is expected to have a transformational effect in the short and long term, and its generational evolution is given by Jouriles (2016).
.
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Steam—mechanical production
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Electricity—mass production
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Automation—manufacturing automation
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Internet of Things—networked manufacturing.
Some challenges expected in the implementation of technology strategies in textiles (Birnbaum, 2016; Küsters et al., 2017) are:
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Governing laws and regulations for IoT
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Data privacy and protection of individuals
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Uncertainties about financial benefits
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No prior business cases to justify investments
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No coordination across organizational units
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Outdated talent and capabilities
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Strong leadership to encourage radical transformation
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Cybersecurity threats.
In his research, Küsters et al. (2017) discuss a Textile Learning Factory 4.0 experiment that was proposed as a prototype. Its objective was to showcase digital transformation through the adoption of Industry 4.0 solutions. The factory simulated end-to-end value chain from order to delivery. The output was customer-specific textile products (Fig. 7.8).
To help textile companies overcome some of the identified challenges and to create market-ready products and solutions, three key elements to success are (Küsters et al., 2017):
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1.
Access to state-of-the-art technologies. These technologies should be supported with real business cases that demonstrate possibilities with digital transformation.
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2.
Access to professional capability building to address gaps in digital competencies.
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3.
Collaboration among all stakeholders including manufacturers, service providers, and research institutes.
The application of IoT may have a long-ranging impact on the fashion industry. Being able to create prototypes fast enables companies to test and demonstrate the unique characteristics of their products. It makes reconfigurations easier based on the potential buyer preferences. This transformation starting with the product value chain will pervade other new functions (Porter & Heppelmann, 2015).
Abele et al. (2015) provide a conceptual model of a Textile Learning Factory 4.0 (Fig. 7.9). This is closer to reality than any time in the past due to the leap-frogging innovations in technology.
7.7.1 Data in Fashion
Data may be considered as unpolished diamonds that can reveal secrets for a business to be successful. The lessons learned by mining the data will allow organizations to relearn, reevaluate, and restrategize continuously to improve their bottom line. Technology plays a major role in helping organizations discover winning parameters from historical data. Big data is the ability to mine huge volumes of data. It has gained significance in recent times. Last decade has seen a huge increase in the adoption of big data (Madsen & Stenheim, 2016; Lim et al., 2009). It can assist to find trends and patterns in fashion data which includes forecasting, raw materials, supply chain management, customer behavior, preferences, and emotions and include all data generated by the fashion industry (Jain et al., 2017). The fashion data can be bucketed into the following categories as in Table 7.12 (Jain et al., 2017).
Jain et al. (2017) proposed (Fig. 7.10) that was a combination of the knowledge-based recommender system and a search engine. This would enable designers to search based on any fashion data criteria and get the best recommendation for the design of their proposed product.
Overall, the introduction of disruptive technology in textiles will provide multifarious benefits including but not limited to better manufacturing techniques, reduced manual labor, improved quality process, cost optimization, and faster prototyping. Adapting technology will enable businesses to become more profitable and sustainable.
7.8 Circularity for Sustainable Textile Industry
The textile industry is considered to be a top polluting and unsustainable industries impacting our environment (Defra, 2008). There is an increased demand across the globe to implement checks and balances in the industry to reduce further damage to the environment. On the other hand, textile companies also realize the importance of developing sustainable performance and development (Gardetti, 2016). The environmental footprint needs to be evaluated carefully, in terms of water usage (Niinimaki et al., 2020), chemical toxicity (Shirvanimoghaddam et al., 2020), emissions, and energy usage (Muthukumarana et al., 2018). Islam et al. (2020) have mapped environmentally sustainable practices in textiles and associated industries. The textile sector can design transformational innovations by referring to eight archetypes of “Sustainable Business Models (SBM)” referred by Bocken et al. (2014). They describe the underlying mechanisms and solutions. It includes new economic concepts like closed-loop business models, natural capitalism, social enterprises, product service systems (PSSs), etc., and they are as follows (Bocken et al., 2014):
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Maximize efficiency (material and energy)
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Recreate value from “waste”
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Substitution with renewables and natural processes
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Deliver functionality rather than ownership
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Adopt a stewardship role
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Encourage sufficiency
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Repurpose the business for society/environment
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Develop scale-up solutions.
Hemkhaus (2019) has provided different recycling approaches based on the life cycle of textile products. Figures 7.11 and 7.12 contain the recycling processes that would make textile industry to become more sustainable and socially responsible.
In recent times, there is a paradigm shift toward a circular economy, where waste is considered to be a valuable resource, and elimination of it is considered in designing, disassembly, and recycling (Braungart et al., 2006) (Fig. 7.12). Hemkhaus (2019) has provided a framework of circular business models applicable to the textile industry. The main categories are given in Table 7.13.
Another means to be sustainable is to reuse textile products. In the secondhand clothing sector (Pal, 2015) has listed different resell-based business model types (see Table 7.14).
As the business of textiles is as old as the time when humankind discovered culture, it has become its responsibility to reduce its potential environmental impact. By reducing the environmental footprint, the industry will not only guarantee its longevity but also the end consumers who keep it afloat.
7.9 Conclusion
At this moment, the textile industry is at a crossroads of its existence. While there have been multiple inventions and innovations that have driven the industry forward, it is facing headwinds by way of the need to have a sustainable business model. In addition, the recent onset of the COVID-19 epidemic disrupted the industry and has pushed it to the brink. Sustaining the business during adverse economic conditions requires a courageous and innovative mindset. While challenges are multi-fold, equivalent opportunities have arisen in the areas like e-commerce. It is our combined responsibility to look for means to improve the industry, not just for its survival during these challenging times but for its sustenance during the times after.
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This work was supported by the project “Advanced structures for thermal insulation in extreme conditions” (Reg. No. 21-32510 M) granted by the Czech Science Foundation (GACR).
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Venkataraman, M., Militký, J. (2023). Business Aspects of Textile Design. In: Militký, J., Venkataraman, M., Periyasamy, A.P. (eds) Fibrous Structures and Their Impact on Textile Design. Springer, Singapore. https://doi.org/10.1007/978-981-19-4827-5_7
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