The future of business in Taiwan lies in branding, no matter how difficult it is to achieve, Acer Inc (宏碁) founder Stan Shih (施振榮) said at a business seminar in Taipei on Saturday.
“The days of doing OEM [original equipment manufacturing] and ODM [original design manufacturing] are numbered,” Shih said. “Perhaps these businesses will thrive for another five to 10 years, I don’t know. But going forward, in order to elevate Taiwan to the global business scene with added value, we have to invest in branding right now. This is our social responsibility.”
Acer, the world’s third-largest maker of personal computers, ranked No. 3 in an Interbrand survey of top 20 Taiwanese brands this year, with a brand value of NT$39.84 billion (US$1.265 billion).
The survey, released on Tuesday, placed Trend Micro (趨勢) as the top Taiwanese brand with NT$41.77 billion in brand value, followed by Asus (華碩) with NT$41.68 billion.
But going from ODM and OEM into branding is incredibly difficult, Shih said. He shared with the audience the difficulties in conveying to Acer employees the decision to focus on brands and that to spin off Wistron Corp (緯創) to achieve this goal.
“Once your corporate culture as an OEM is established, it’s hard to change it into an innovative brand-building company,” Shih said.
Acer took years to cultivate its brand as well as its manufacturing arms independently so they could both stand on their own.
It was a shock to Wistron when it learned Acer signed a manufacturing contract with one of Wistron’s competitors.
“This is when Wistron realized that Acer is no longer its guaranteed support and when the rest of the industry realized that Acer is playing for real,” Shih said.
High Tech Computer Corp (HTC, 宏達電) president Peter Chou (周永明) was the other guest of honor at the seminar on Saturday. Echoing Shih’s stance on the future of Taiwan, he said: “Manufacturing is no longer a value Taiwan businesses can provide. Vietnam, China and other emerging countries are quickly catching up.”
So far, the number of international brands created by Taiwan is few and far between.
HTC, the world’s biggest maker of mobile phones running Microsoft Corp’s smart phone software platform, ranked No. 4 in the Interbrand survey, with a brand value of NT$37.86 billion. The company launched its first Android-based Google phone, or the G1, in the US on Sept. 23.
As global markets give their brands a bigger playing field, both Shih and Chou said Acer had this in mind when it chose to build its hub in Europe and markets from Europe to North America, then to Asia, which also explains why HTC handsets were launched in North American and Dubai first before they were released in Taiwan.
To enhance the nation’s economic competitiveness, the government has launched two branding programs to help local firms develop their brands.
But developing a brand “is not about designing a cute logo and plastering the cool sticker on all your products,” Chou said.
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