Taipei Times: What is the most important ingredient in a company's survival?
Simon Teng (鄧學中): For a company to survive in the long term, the development of a brand name and distribution networks are the most difficult part. To become a market leader in a new product category, you need to be foremost in the minds of your potential customers. For example, 7-Eleven captured the image of being the world's first 24-hour convenience store and has easily become the leader in its niche market. Now it has been able to build a convenience-store empire on the strength of its valuable brand name. Eight years ago, Working House (生活工場) sought to bring Taiwan a new retail business model, hoping to create a special market segment by offering a unique range of kitchenware, home furnishings, stationery and general houseware items.
TT: What's your definition of a successful brand?
Teng: The definition of a great brand lies in the impact it has on customers, the value it gives them and the depth of the brand's inherent meaning and characteristics. In other words, a great brand should be something that is irreplaceable by others. For instance, if 7-Eleven stores disappeared from the streets one day and other brands such as FamilyMart (全家便利) or Hi-Life (萊爾富) easily replace it, then it would be difficult for 7-Eleven to claim its brand was very successful.
TT: How well have Taiwanese companies done in terms of building brands?
Teng: Well, many Taiwanese companies are weak in mapping out their "branding" strategies and lack experience in building their own brands. In fact, over the past few decades the central focus of Taiwanese businesses, especially manufacturers, seemed to be not their brands, but their products. It is reasonable that for an export-oriented country like Taiwan, our companies needed to pump out as many goods as possible to achieve economies of scale, which in turn helps them rack up lots of profit for future expansion. But based on the sole pursuit of economic scale and fast expansion, companies generally have found themselves constrained when it comes to making progress in developing their brand names as well as expanding distribution networks.
TT: In the first few years of developing the Working House brand your organization was operating in the red, yet you pressed on. What was the strategy?
Teng: Yes, we were not earning money in the beginning. It is a balance all entrepreneurs have to strike between making a profit and opening up more outlets and producing more unique goods at lower prices. [We chose to] take a slower pace to think through how to build our brand and expand our channels.
Actually, we lost money for the first five years, but sometimes you just have to insist on something. To me, insisting on creating our own brand and selling products which are exclusive in our stores is something that helps our products stand out from the crowd. Moreover, this will ensure that our products or services are continually talked about in the long run.
So during the tough years at the beginning, I went to request financial support from relatives and friends to help the company get through. We finally broke even in 1999 and since that time have opened -- on average -- 20 new stores a year, with each store being nearly 300 pings.
TT: How is the business going so far? Do you have plans to franchise?
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