The financial crisis has altered the behavior of consumers worldwide and companies that fail to make adjustments will have difficulty emerging from the storm unscathed, experts said at a forum in Taipei yesterday.
Johnsee Lee (李鍾熙), president of the Industrial Technology Research Institute (工研院), said the global downturn appeared to have stabilized, but it continued to have an impact on the world economy.
Lee said that emerging markets such as China, which is expected to retain GDP growth of 7 percent this year, would play an increasingly important role following the financial turmoil.
“The financial upheaval taught consumers to be more conservative in their spending and they now favor lower-priced products with fair quality,” Lee told a forum on competitiveness.
Lee said that prior to 1973, Japanese automakers had difficulty making inroads in the US market, but the energy crisis led people to realize the importance of conservation. As a result, smaller, fuel-efficient Japanese cars became popular.
Lee said the financial crisis would also deal a structural blow to the supply chain of assorted industries, with some firms surviving and others failing, depending on whether they can innovate and stay competitive.
Lee voiced concern at the Lausanne-based business school IMD ranking Taiwan’s competitiveness at No. 23, down from No. 13 last year.
While the government cited the shrinking GDP as the reason, corporate efficiency also contributed to the downgrading, the IMD report showed.
Simon Lin (林憲銘), chairman and chief executive officer of Wistron Corp (緯創), the nation’s third largest contract maker of laptops, said his company achieved 30 percent growth in the first quarter of this year, mostly the result of its pragmatic strategy.
“Wistron was little affected by the economic slump, which has led consumers to refrain from luxurious items in favor of low-priced computers,” Lin said.
As an original design manufacturer (ODM), Lin said, Wistron seeks to build on low-return operations and its down-to-earth strategy has shielded the company and the industry from the risk of a bubble bust.
“No bubble, no burst,” he said. “The principle does not apply to sectors featuring high earnings, high risk.”
Lin said he saw new business opportunity for ODMs to provide technology services, adding that the key to success was innovation so that makers can develop products to meet users’ needs, not merely suppliers.
Sophia Tong (童至祥), chief executive officer of Test Rite International Co (特力集團), said the financial crisis did not substantially weaken the purchasing power of Taiwanese, but their lack of confidence drove them to favor products at discount prices.
Tong said her company took note of the trend and adjusted its procurement and other policies to cut costs and stay competitive.
“That strategy proved effective in helping the company weather the downturn,” Tong said.
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