Wed, Jul 22, 2009 - Page 12 News List

Firms should team up for China: Ohmae

‘MR STRATEGY’: The president and CEO of Business Breakthrough said Taiwanese companies could become acquisition targets without foreign multinational partners

By Joyce Huang  /  STAFF REPORTER

Local companies should look to foreign multinational partners to jointly tap into China’s domestic market, rather than use a “go it alone” strategy, a visiting Japanese management guru said yesterday.

“Left alone, Taiwanese companies can become targets of acquisitions by Chinese rivals,” Kenichi Ohmae, president and CEO of Business Breakthrough, told a business forum organized by the Chinese National Association of Industry and Commerce (工商協進會) in Taipei yesterday.

Ohmae said the window for Taiwanese businesses to excel in the Chinese market, which was wide open five years ago, is mostly closed now and will only last for one more year.

“Taiwan needs to refocus, quickly,” he said.

He said that Taiwan had been successful in taking advantage of China’s strength as a manufacturing export base, but now lacks brands, marketing and distribution strategies as well as access to the domestic demand market there.

Ohmae advised local businesses to establish a true insider position in China — an advantage that both Taiwan native-founded Ting Hsin International Group (頂新集團) and Uni-President Group (統一集團) enjoy, so as to appeal to European, US or Japanese businesses for potential partnerships in China.

He further urged local companies to list on both the Taipei and Shanghai bourses, which he said would make them extremely attractive to foreign companies for tie ups.

Ohmae, dubbed “Mr Strategy,” also urged the Taiwanese government to negotiate a quid pro quo with its Chinese counterpart — quasi local status for Taiwanese businesses so they can participate in steel and chemical industries in China as well as infrastructure projects such as railways, airports and harbors.

Moreover, corporations need to sharpen their global strategies based on the new world economic map following the recent financial tsunami, he said.

Ohmae predicted that in 2020 the EU would replace the US to become the world’s largest economy with Russia joining as its latest member.

He said the US would then be the second-largest economy in the world, followed by China, India and Japan, in that order.

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