Fri, Nov 17, 2006 - Page 8 News List

Managing technology and quality, not brands

By Huang Tien-lin 黃天麟

"Branding" has been in vogue in Taiwan of late. Developing brands on the international market is the avowed goal of those advocating that local industries move to China. Government officials are also picking up on the trend, as if not using the word "brand" would imply a lack of vision.

The Conference on Sustainable Economic Development even talked about the three "Bs" of economic renewal -- Bridge, Brain and Brand -- as values to be actively pursued.

Is Taiwan short of brands? No, there are many.

Outstanding schools like National Taiwan University have established brands, as have Taiwan Beer, Tatung and Sampo in the manufacturing industry. Brands can be found everywhere in Taiwan. They are not unachievable -- but they are the result of management, not the goal of management.

The only difficult thing about brands is building them. But through gradual and active management, investment, research and development, brands can be created. This is how Toyota, Sony, Coca Cola and IBM were all established.

This being so, why do academics and officials look at internationalization and improving international competitiveness without mentioning words such as "investment," "research and development."

They harp about "brandz" as if they were the only possible solution to Taiwan's current economic and industrial problems.

A more thorough examination shows that the source of their problems is a deep-rooted China complex. In other words, it is the Chinese economic outlook that is the crux of the problem.

Over the last few years, Taiwan has tried to develop international markets, and in doing so brands have been treated as a value in itself -- companies have tried to take shortcuts through expensive mergers and acquisitions.

This is the result of seeing brands as the end and not the means, and ensures failure.

One example is BenQ's acquisition of the Siemens handset division, which of course was a wakeup call for those who claim that brands are everything.

This NT$25 billion (US$761 million) lesson was indeed a waste of money, and one could say that it was the price paid for being manipulated by the China dream. It also exposed Germans to the short-term thinking of Taiwanese companies.

Building brands does not allow for wishful thinking. Brands are the result of successful management, and they are a metter of "easy come, easy go."

Sony has in recent years been mesmerized by financial leverage and neglected research and development, which has led to its brand losing some of its luster.

Those defending brands say that the failure of BenQ's Siemens experiment was symptomatic of the insufficient ability of Taiwanese companies to manage their brands. This begs the question of just how brands should be managed.

In reality, however, it is the careful management of technological and quality aspects -- not that of brand image -- that matters.

Superior technology and quality are what the soul of a brand is made of. This can only be achieved by investing, manufacturing and research and development.

It is to be hoped that our officials and enterprises will wake up sooner rather than later and stop being fooled by those advocating a move to China.

Brands should not be a policy goal; successful brands are the natural result of continued upgrading.

Huang Tien-lin is a former national policy adviser to the president.

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