Comparative study of international marketing strategy of Japanese and Taiwanese CNC machine tool industry in the ASEAN region
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- University of Strathclyde
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- After World War II, the USA and Europe dominated the world's machine tool industry, exporting costly high-performance machine tools. Emerging from the ravages of war and a decimated manufacturing base, Japanese and Taiwanese machine tool manufacturers were committed to catching up with the leading edge technology of the West through reverse engineering, licensing agreements, mass production and product innovation, intense R&D efforts, etc. They have succeeded within a span of four decades and even leap-frogged the competition to emerge as global players of world-class status. -- Previous researchers have undertaken comparative studies of Japanese machine tool producers in the European market. This thesis is the first analysis of Japanese machine tool companies in the ASEAN market. As effective understanding requires a theoretical and an application-based perspective, the author developed his Total Quality Business Paradigm and applied it to his analysis of Japanese and Taiwanese producers of machine tools. -- As part of a total business system, marketing must be viewed as a subsystem of the total societal system. As part of a total societal system, business influences and is influenced by forces within the larger context of the nation. Therefore, the Total Quality Business Paradigm is comprised of two conceptual models, ie "The Wheel of Competition of Asian Producers in the CNC Machine Tool Industry in ASEAN Region" at the macro level (ie the nation) and "Flexible Intelligent Relationship Management Strategy (FIRMS)" at the micro level (ie the company). As Hofstede (1994)* so succinctly says, "the business of international business is culture". Understanding international business means understanding both national and organizational cultures at the same time. Therefore, special attention is paid to the characteristics of East Asian cultures that help explain the success stories of the Japanese and Taiwanese machine tool industry. -- In Phase I of the empirical research, the author visited Japan and Taiwan for in depth interviews and administration of questionnaires with three Japanese producers (ie Okuma Corporation, Yarnazaki-Mazak Corporation, and Mori Seiki Company Limited) and three Taiwanese producers (ie Taichung Machinery Works Company, Lead well Machines Manufacturing Corporation, and Fair Friend Enterprise Group -Machine Tool Division). There is consistency in the results with a general agreement that the elements in the Wheel of Competition are responsible for their competitive success. -- Though the Japanese and Taiwanese CNC machine tool builders each apply a quite different international marketing strategy (the Japanese producers focus on quality leadership whilst Taiwanese producers focus on price leadership), the similarities are: • They use Sun Tzu's Art of War in business • They share common cultural belief systems embedded in Confucianism • They prescribe to communitarianism • Their business and management ethos are derived from their socio-cultural belief systems • They have attained world-class status • They are global players • They are competitive nations enjoying competitive advantages • They are common sense nations • They are able to exploit and manage technology for innovation and product development on a justin-time response to market needs • They are more competitive in the ASEAN market than their European and American counterparts because of their proximity geographically and culturally to the region, as well as their wholehearted commitment and long-term perspective. This manifests itself in their quality, flexibility, after-sales service, aggressive sales promotion, pricing, delivery schedule, product reliability, etc -- At the micro level, all six machine tool producers share the five goals embodied in the framework of FIRMS: • Loyalty from customers • Commitment from workers • Cooperation from suppliers • Collaboration from distributors • Respect from competitors -- In Phase II of the empirical research, the author visited over one hundred end-users of CNC machine tools in the ASEAN region (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) in order to discern end-users’ perceptions of the characteristics of a world-class CNC machine tool manufacturer. The end-users' ranking in descending order of importance is as follows: Chrematistics of World-Class Manufacturer • Manufacturing Strategy • Corporate Values • Marketing Strategy • Global Player • Corporate Strategy • Human Resource Strategy -- End-Users' Interpretations • Quality and Reliability of Machine Tools • Sincerity, Integrity and Trust of Manufacturer/Distributor's Sales Personnel • Price and After-Sales Service of Machine Tools • World-wide Market Share held by Machine Tool Manufacturer • Manufacturer's Brand Name/Image • Employees' Opinion of their Employer (Manufacturer/Distributor) -- The influence of brand name in the organizational buying behaviour of end-users in the ASEAN region is reflected in the following order of preference for machine tools: • Mori Seiki • Okuma • Mazak -- Even though Taiwanese brands could be thirty percent cheaper than Japanese products, only a third of the end-users (ie 44 out of 133 respondents) would consider switching over from Japanese to Taiwanese brands. -- World-class Japanese and Taiwanese machine tool manufacturers must perform and deliver around the perceptions, expectations and needs of their customers through in depth understanding of the organizational buying behaviour of the end-users. International marketing strategy of Japanese and Taiwanese manufacturers must pervade the strategic planning of FIRMS in the spinning wheel of competition of Asian producers in the CNC machine tool industry in the ASEAN region.
- Advisor / supervisor
- McDermott, Michael
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