Competitive Strategies for the Notebook Computer industry in Taiwan

• Main Authors: PAN SHUN-LUNG, 潘順隆
• Other Authors: CHANG SHENG-LIN
• Format: Others
• Language: zh-TW
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/70186551849984414776

碩士 === 國立臺灣科技大學 === 管理研究所 === 91 === Whether people recognize it or not, the Internet has speeded up the changes of our life and activities. Definitely, the enterprise operation is no exception. The main reason why people purchase personal computers is for Internet Access. According to the Survey of Internet User Profile by MasterCard International Incorporated, the main reason for Internet Access is to access email (83%). Other reasons are to research (55%), to read the news (53%), to browse (51%), to chat with relatives and friends (43%), to do homework (21%), to shop online (19%), to chat with strangers (17%), to look for a job (15%), and so on. Moreover, the Trend Survey of Taiwan Internet Market announced by the Gallup Organization on May 3, 2000 reveals that the main reason for Internet Access is to search for information or websites, and the next reason is to access email. Demonstrated by these two surveys, most web users make use of the Internet primarily for “Email” and for “Research”. The Internet means “the infinite connection”— using the Internet to interact with other web users in the virtual space-time. In other words, “Interaction and Communication” is the best value that the Internet can offer. In addition to Email and Research, the proportion of online shopping also grows rapidly. Through Internet interaction, customers can pinpoint the product they need via Internet choice board, and companies can punctually deliver custom-made products. However, modern customers do not need simply the product itself. Instead, they hope to show their own personalities, favorites and styles through the behavior and process of their purchases. Consequently, a small quantity of varied and customized products has been gradually emphasized in the marketing concept. Manufacturers have realized the trend and shift, so they adopt the strategy of so-called “Mass Customization”. The concept of “Mass Customization” is to relatively provide “Variety” and “Customization” without increasing the cost. They hope to take advantage of the strategy to provide products and service that meets or exceeds customer expectation , so that they can consolidate customers’ loyalty, create competitive niches, and obtain bigger market share. Therefore, industries propose Design for Postponement Strategies in order to meet the need of “Tailored Customization”. With the combination of modulized product design and modulized manufacturing process developing , the diversities are shifted to the time of customers’ order. In other words, manufacture processes with determinant factors (including specific specifications, functions, characteristics, and so on) are postponed, so that certain complicated and uncertainty factors in the supply chain can be eliminated, to provide more customized products to increase customers’ loyalty, to create product value, to reduce inventory investment, and so on. While the customers’ awareness increases, manufacturers expands manufacturing capacity, and the demands are less than expected, these situations induce global IT industry to enter the Mega-competition era. Both HP/Compaq merge and Dell’s low-price strategy account for the violent change of the industry. That the profit of Own-brand industries is limited and the gross profit of OEM factories is compressed directly effect Taiwan OEM-oriented industry. In the past, Taiwan OEM industry used mass production to reduce the cost and to maintain the fixed profit. At present, they are seeking for the reduction of personnel cost, because there are no significant differences between the trade-in costs of materials, facilities and factory buildings depreciation. Thus, nomad has become the competitiveness-enhancing mode and strategy of Taiwan industry. Currently, Mainland China is the first choice of Taiwan industry. The huge market, the low production cost, and the cheap labor force evidently determine China to become the global manufacture center. Although the scale of Taiwan OEM industry is not comparable to that of global EMS industry, ODM is Taiwan’s niche. Taiwan’s strength lies in the ability of integrated manufacturing service that includes production, planning and management, logistics and specification design. While numerous global EMS have set up factories in China and some even have introduced original design service, Taiwan OEM industry is under ever-increasing competition pressure, because design service used to characterize the competitiveness of Taiwan’s high-tech industries. At present, every company competes with one another in the same direction by providing similar products and service. Therefore, Own-brand industries have no choice but to compromise on the price, so that OEM industries tend to profit squeeze. Take Acer Incorporated Re-organization, Quanta’s organization adjustment, and Compal’s rapid integration for example. While industries are pursuing the goal of low cost, they compare not only in the order price, but in the resource rearrangement. In addition, they pursue not only the advance of manufacture technology, but the reconstruction of entire management thought. Instead of only relying on price competition, they consider how to increase the product add on value to their customers, namely, developing the differentiation strategy. The goals of Taiwan’s ODM industry correspond to the aims of my research: to determine the differentiation , to strengthen the core competitiveness, and to offer omnipotent integration and service. My research discusses Notebook computer Industry from its status quo to future perspectives, including case studies of a Own-brand industry (Dell), the flagship of EMS (Solectron), as well as representatives of Taiwan’s industry (Quanta, Compal, and Wistron). Based on the core competitiveness and key success factors of these target companies, my research also provides several suggestions for Taiwan’s other related industries.