To forge a name for a successful branded business, Taiwanese companies should continue its lookout for global talent and innovative ideas, an industry watcher said yesterday.
"In this era where specialized division of labor counts, Tai-wanese firms should change their mindset to recruit more global talents for both local and overseas offices," said Cynthia Chyn (秦素霞), deputy general director of the Taipei-based researcher Market Intelligence Center (市場情報中心).
She talked with the Taipei Times after delivering a presentation at the third Annual Global Connect Meeting and Partnering Forum yesterday.
According to Chyn, Taiwanese firms are well known for their ability in integrating applications and putting them into commercialization, a niche which helped make a name for the nation in the global contract-manufacturing scene for the past 20 years.
However, as more firms are turning into brandname business for higher margins and international visibility, they should beef up their international talent pool as foreign expertise in branding is key to success, she said.
"Taiwanese vendors are good at meeting clients' requirements for product manufacturing. But they should expand their market reach to segments such as after-sales or customer service," she said.
This will enable them to understand real customer needs, which will in turn stimulate creativity and increase profitability in the long run, she said.
According to Chyn, moving production offshore to China will definitely expand the landscape to a larger extent.
Taiwanese firms, however, are gradually losing their cultural-proximity advantage in China, she said, so they should run businesses there and amend strategies proactively based on domestic conditions.
"Overseas investments in China have marginal profit margins with an annual growth of only 0.7 percent to 1 percent," Chyn said, adding that this is a result of identical cost structures which makes most companies lose their competitiveness.
Higher rates for bank loans, rising oil prices and soaring raw material costs have burdened overseas firms investing in China, as they will need to market their products at a cheaper price in emerging countries, she said.
Meanwhile, more investments in the form of venture capital are expected to flood into China in the near term, said Michael Kang (康中邁), a director at the consultant firm Zero2IPO Co (清科信息).
However, companies should be cautious as such investments have not performed up to expectations so far due to poor management capability and failure in technology development, he said.
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