The Lai Lai wants to show that there's still room for veterans in this game. The hotel has very competitive rates and a highly experienced staff, some of who have been there the entire 20 years of the hotel's history. And the Lai Lai has been campaigning hard for the corporate business that accounts for a majority of Taipei's visitors.
David Low, the general manager has vigorously pursued the domestic market. Hotel packages have been targeted at families travelling from south of Taiwan, from cities like Tainan and Kaohsiung, in an effort that was actually begun three years prior.
"So far it has worked," Low said. But he also cautioned, "I would not say it's a win-win situation. We have to keep trying." This has also required a shift in guest-service focus.
"We must cater to the needs of our customers," the Low explained. "We do very well with the Japanese. But with the new domestic market coming, you have a totally different type of service. Local guests require different service in terms of language, amenities and food.
Starwood Group committed to Taiwan
The Starwood Group now has three hotels in Taiwan: the Lai Lai Sheraton, the Westin Taipei, and the Westin Resort. The group anticipates more growth throughout Asia, and it intends to expand its business facilities, the luxurious St. Regis and the more economic Four Points facility.
The health of the hotel industry is generally parallel to the health of the tourism industry and the economy in general. And this certainly holds true for Starwood and Taiwan. Taiwan makes world news as much for its annual growth and rising per-capita income as its ongoing row with mainland China. As business rises, so do the travelers. And now more people are beginning to see Taiwan as a tourism destination.
The Starwood Preferred Guest program is one of the most recognized benefit programs in Taiwan's hotel industry. Low anticipates that this program will also help the Lai Lai boost its corporate business for 2000. Economically, the Lai Lai anticipates a good year for Taiwan, and that means a good year for the hotel.
"I see a very positive time for Taiwan in the future, as long as they stabilize the government. Everyone has a very bright outlook for this island," Low concluded.
Selling Japan on "The Taiwan Model"
The semiconductor industry continues to undergo rapid, sustained expansion as the world's hi-tech markets surge ahead. So long as makers of PCs and consumer electronics keep producing, they will need integrated circuits. And the advent of wireless technology makes the prospects all the more dizzying.
So who will produce all these ICs? The many products requiring them are experiencing shorter production cycles, in order to keep up with faster speed-to-market needs. And companies by and large are moving more toward trimming fat and emphasizing core competencies than pursuing vertical integration. Thus the need to outsource.
In monetary value, the growth of the outsourcing sector outstrips the growth of the entire packaging market. And this indicates the vast potential for companies like Advanced Semiconductor Electronics who strive to be the top outsourcing option worldwide. ASE's success is based upon its ability to manage its production capacity better than their customers can. The company keeps its costs down, and its customers benefit.
Essentially, the concept is that customers use ASE as an extension of their own factory. They share technology and then every quarter review the production process. This way, the companies are well-coordinated. All of ASE's business is from companies needing to outsource. With no products of its own, ASE provides services related to packaging, testing and electronics manufacturing.
Speed to market is becoming more important than a customer's patent protection. American corporations realized years ago that without outsourcing to improve efficiency, they would continue to lose market share.
ASE chairman and CEO Jason Chang compared Japan's economic situation to the one that faced American businesses 10 years ago. He pointed out that IBM was forced to impose massive layoffs as the company restructured, a necessary measure in returning to its core competencies. IBM is now an ASE customer.
"Very large companies like IBM, Nokia and Cisco use us as their partner," said Chang. " And I think more Japanese companies need to look into outsourcing as well. Japan has been slow getting into this model. But it's difficult for them to fight the situation."
Chang illustrated that the top companies around the world are ASE customers, including the top Japanese firms. Japan has 70 percent of the global semiconductor end-product market. However, Japanese firms only account for 5 percent of ASE's revenue, compared with 50 percent from U.S. businesses.
"What Japanese companies need to do is go back to their core competencies and work with outside people. As soon as the companies change, the country will change," said Chang.
The world is Taiwan's market
The earthquake that rocked central Taiwan last September briefly halted, to varying degrees, production among Taiwan's semiconductor manufacturers. Reaction was swift, and before long the industry was back to 100 percent capacity with nothing more than a mere hiccup felt by concerned IT companies around the world. But it was nevertheless a sobering reminder of how important "Silicon Island" has become.
ASE and its subsidiary ASE Test Ltd. have established themselves internationally by opening or acquiring operations outside of Taiwan, including locations in South Korea, Malaysia, California, even Mexico and Scotland. Worldwide, ASE employs close to 15,000 people. ASE plans on further expansion through organic growth and mergers and acquisitions, as well as increasing its strategic relationships.
"We shouldn't be perceived as a Taiwanese company," Chang insisted. "We are a global company and we want to serve companies around the world."
Taiwan itself has not produced many globally recognized brand names. The focus over the last 10 years has been to promote the island as a home of quality hi-tech goods. But but these goods predominantly get hidden behind the logos of companies from other countries. In a domestic market of only 22 million, the task of establishing global brands, without a tradition for it, can be formidable.
So many Taiwanese companies therefore continue to make partnerships with already recognized brand names. This tradition has progressed through the years from shoes and textiles to PCs and hi-tech components.
"Taiwan is a small country, so we have tried to use this model of cooperation," Chang explained. "Our work is the success of our customers."
Under the fabric of success
The September 21 earthquake in central Taiwan last year also rocked the country's textile industry. Two Tah Tong Textile employees at the spinning mill in Taichung were killed that day, and seven more were injured. But even though damage to the mill reduced production capacity by 15 percent, the company reported a rather modest 6 percent increase in sales over 1998,
It appears the company will come back stronger than before. President Steven S.C. Chen explained, "This kind of impact is really a shock. And it's really awakened the company's new vision for textiles. The spirit is picking up."
According to Chen, Tah Tong Textile's vision parallels that of Taiwan's textile industry as a whole. He emphasizes four points: health, comfort, safety and and environmental concern. The reconstructed Taichung mill will become operational in the third quarter of this year. It will focus largely on high-performance fibers like Tencel, a material of natural constituents.
"Production of Rayon, an artificial man-made material, creates a lot of pollution, especially air pollution that damages vegetation. Recycling Tencel, or disposing of it in the ground, cannot damage the earth," stated Chen.
Concentration on value-added, hi-tech fibers will enable local companies to compete more internationally, and Tah Tong Textile already specializes in this area. Eighty percent of Tah Tong Textile's production finds its way outside of Taiwan. Hong Kong and Japan are two of the company's most important markets, and activities have recently begun in Europe as well. Other significant areas are mainland China, Indonesia --where Tah Tong Textile also runs a spinning factory-- and the United States.
For these reasons, Tah Tong Textile will move to capitalize and expand on its sales of $67 million reached in 1999. The company expects to grow by 20 percent in 2000. Not all sales will come from yarn and fabric production, but also from finished products. Garments manufactured by Tah Tong Textile include socks and bacteria-resistant underwear, reflecting a commitment to hygiene as well as the human form.
Internet commerce will also play a significant role in the future growth of Taiwan's textiles industry. Chen and his fellow industry leaders hope a transformation to implement information technology, in which online retailing will move from concept to reality, can be carried out over the next five to 10 years. "We need to learn and reposition ourselves for the new e-commerce business," Chen asserted. And when they do, Tah Tong Textile will have more opportunities for growth and expansion.
The picture of achievement
Premier Camera is an obscure brand, only familiar to the consumer in some far reaches of the still-developing parts of the world, where a range of Premier compact cameras is available. Otherwise, the name is unknown, except behind the scenes of the corporate camera industry.
Almost all the international camera brands have trusted this company's manufacturing facilities. For all you know, that designer compact camera you have at home is one of the 50,000 cameras manufactured daily at the Premier factory in Mainland China. In only two years, Premier is capable of manufacturing enough cameras to equip the entire 22 million population of Taiwan. Quantity-wise, Premier is a likely candidate for the No.1 position in the world.
"Today, the world market is quite different from what it was a few years ago. You cannot produce everything yourself and even the big companies are obliged to outsource. You may find the design is from Japan, production in Taiwan or China and marketing is in the USA", said Premier Camera chairman John Huang. "Global cooperation is very important. With the constant decrease in the price of consumer products, we must increase quantity and market share to make some profit. Today, nobody can enjoy big profits so it is necessary to reduce costs while maintaining quality through cooperation."
Since its establishment in 1983, Premier has built its business on cooperation. Even at its origin, the company sprang from an international collaboration between four people. Two Americans, one German and the present Taiwanese chairman Huang decided to venture into business together and capitalize on the latest technology of the time: disc film. This was a flop as disc technology just never caught on. But the company rearranged itself and rebounded quickly. It soon found a niche in the 35mm camera market, a position the company has guarded to this day.
"Japan is still the leader in camera technology so to compete and be attractive to partners, we have to produce equal quality for a cheaper price," said Huang, explaining the key to Premier's success. "There are many good engineers in Taiwan. In camera production though, Taiwan is still one step behind the Japanese. We import about one-third of our lenses from Japan. Most of the other parts, we can buy from Taiwan and more than 50 percent of our parts are produced in China. So we bring down the cost but keep the quality the same."
Premier's Taiwan factory has passed the ISO9001 and 9002, and the China factory passed the ISO9002 certification. "Our management focus reflects our customer needs in that we are very concentrated on the reliability and quality of our products. Of course, the price must be good too. We always say that our product has Japanese quality with a Chinese price."
As a sign of versatility in today's ever-changing market, Premier has also positioned itself to embrace the digital generation. Premier has teamed up with a company from the Hsin Chu Science Park, Pretec. The two companies are in the verge of merging, and together they plan to delve into experimentation and innovation in digital technology.
"In most countries, the equipment and facilities are not ready for the digital age yet," stated Huang. "Only in Japan and the U.S. is it convenient to have a digital camera. In a couple of years though, the digital camera will be very popular. It may soon rival the traditional camera. Personally, I think even in 5 years, the compact camera will be the main product. But the market for digital grows every year. In the long-run, the digital camera will be important, so with the engineers of Pretec, we are ready to absorb this growing market."
Embracing hot prospects
It's summer afternoon in Taipei, and the air is typically hot and humid. Days like this are the reason that shops and restaurants are packed --people flock to the air conditioners are. And on a good number of these hardworking units is the name Teco.
But Teco is more than just air conditioners. News that lunchtime diners watch may be on a Teco television. The ingredients in their fried rice or kung pao chicken might have been kept fresh in a Teco refrigerator. And Teco moteors can be found in a full range of other home appliances.
Home appliances have been the main generators of revenue for Teco Electric & Machinery for many years. However, the company realized that the Taiwan market, in which it is already the No.1 producer of air conditioners and electric motors, has been quickly reaching saturation. point. Teco is therefore diversifying its product lines, its export markets, and its partnerships around the globe, reaching into areas from national infrastructure to IT.
"Sustainability is Teco's top priority." explained Teco's Chairman Theodore Huang. Over the years, partnerships with American home-appliance brands such as Whirlpool and Westinghouse have proven to be so.
Over the past few years, Teco's turnover in its traditional business has been moving toward the $1 billion mark. Teco has lofty goals of increasing this to almost $3 billion. And the company is also striving to become the leading brand name in home appliances and electric motors in the domestic market.
But Teco's future lies in other areas too. The group has teamed with Ericsson and Deutsche Telekom in the burgeoning Taiwanese telecommunications market with a stake in MoBiTai, one of the fastest-growing mobile-communication service providers in Taiwan. Furthermore, Teco group's Teco Information Systems, a sizeable producer of computer monitors, anticipates many opportunities as multimedia systems expand globally.
Huang feels that good Japanese relations have been a significant factor in the Teco's growth, Over the years, the company has worked with the likes of Toshiba, Mitsubishi and NEC. "Traditionally, Japan has been the sole material source, and we've even learned management styles from them," said Huang.
But Huang noted that, "just learning from Japan would not be enough." As chairman, Huang has been instrumental in guiding the company from its roots as a heavy-industries company into the high-tech world of semiconductors and telecoms. Through his leadership, Teco has gained a valuable Western base as well --the successful teaming with Westinghouse being a prime example.
"We have a lot of investments --maybe some would say too many!" added Huang with a laugh.
