Professional Documents
Culture Documents
IB Asssigment
IB Asssigment
0 INTRODUCTION
Kao International
Kao was established by Mr. Tomiro Nagase as Western sundry goods dealer Nagase
Shoten (Book shop) in 1887, Tokyo, Japan. Kao main businesses are focus on beauty care,
human health care, fabric and home care. In additional, Kao Group has also operated their
chemical business for industry used.
Kao businesses are all over the world, the business focuses are in Asia, Europe, Africa,
North America and Latin America. In Asia the business are operate in Japan, China, Hong Kong,
Taiwan, Thailand, Malaysia, Singapore and Indonesia. Whereas the business focus in Europe and
Africa is in Finland, Denmark, Russia, Germany, Netherlands, UK, Belgium, Czech Republic,
France, Austria, Switzerland, Italy, Spain and South Africa. For business focus in North America
and Latin America is Canada, US and Mexico.
Kao mission is to enhance the satisfaction and enrichment of the lives of human being.
They are working to closest the consumers and customers in each market, and earning the respect
and trust of all stakeholders. Kaos values are divided into three parts which is YokiMonozukuri and Innovation and integrity.
Kao Taiwan
In 1964, Kaos business expands to Taiwan. In 1966, Kao produced the first shampoo
powder in their newly build factory.
In 1991, Kao (Taiwan) Corporation was planning for the modern business and logistics
system. By the following year, the company changed to Kao (Taiwan) Corporation, and they
started the implementation of computer network to modern business and logistics systems. In
2001 until 2004, they bring in the EVA system and SAP system to their company.
Taiwan has experienced one of the worlds highest sustained economic growth rates over the
past three decades and Taiwan is home to several international business ports, with the shortest
average flying time to major cities. And Taiwan also offers competitive advantages with its free
trade ports, R&D and comprehensive processing services to attract the foreign investors.
(Retrieved from http://www.kao.com/jp/en/corp_imgs/corp_info/report00_008.pdf)
Taiwan
Taiwan is located in Eastern Asia, off the southeastern coast of China, at the western edge
of the Pacific Ocean, between Japan and the Philippines. Taiwan occupies a total area of 35,890
square kilometers which is a democracy country with 23 million people of population. Taipei,
Taiwans capital city has the most densely populated area in Taiwans territory. (Retrieved
from http://www.indexmundi.com/taiwan/population_growth_rate.html)
Due to the lack of natural resources, international trade has played a leading role in
Taiwans economic development. Reliance on family-owned private businesses and exportoriented trade policies has made Taiwan have fastest-growing economies during the past three
decades, with a real growth rate averaging more than 8 percent annually over the time span. The
quick industrialization and rapid growth of Taiwan had make become one of the four
industrialized developed countries in Asia besides Singapore, Hong Kong & South Korea and
known as one of the Four Asian Tigers.
So, Kao (Taiwan) Corporation have to convert their marketing message, product details and
sometimes even brand name into Chinese to reach the consumers effectively. The
communication programs that Kao (Taiwan) Corporation has developed are products information
on products label translated into Chinese and also created a Chinese official website
(www.kao.com/tw/) such as below.
(c) Aesthetics
Based on the research, Kao (Taiwan) Corporation did not dealing any aesthetics issues in
its operation at Taiwan.
(d) Education
There are over one hundred institutions of higher learning, which admit sixty thousand
students a year. Diversified and challenging educational environment has meant a highly skilled
and able work force, gifted entrepreneurs, and savvy businesspeople for the nation. Education
affects all aspects of the culture from economic development to consumer behavior. The literacy
rate of a country is a potent force in economic development and literacy has a profound effect on
marketing. For an example, it is much easier to communicate with a literate market for Kao
(Taiwan) Corporation, because the marketer has to depend on symbols and pictures to
advertising and communicate with the consumers in Taiwan.
The resulted of 2008 legislative elections and presidential elections have a major positive
impact on both the islands political stability and economic attractions. Domestic political risks
have fallen sharply because the KMTs large majority in the legislature has put it a stronger
position to pass and implement legislation more efficiently. According to AMB Country Risk
Report, the most recently elected president of Taiwan Ma Ying Jeou has pursued a closer
relationship with China. Furthermore, the government has privatized and deregulated much of
economic ties with China which would greatly improve Taiwans economic prospects. Thus, it
will
bring
positive
impact
to
KAO
corporations.
(Retrieved
from
http://www3.ambest.com/ratings/cr/reports/Taiwan.pdf)
Taiwan follows the Civil Law system and the legal system had developed steadily in
Taiwan. Democratization was essential leading to rapid and dramatic improvements in the legal
system in Taiwan. But, democratization did not resolve all of the tensions and problems in the
legal system or in governance. As in all countries, the legal system remains a work in progress,
with rule of law an encouraging ideal to be struggled for if always imperfectly realized.
Taiwan prohibits or restricts foreign investment in certain sectors such as agricultural production,
chemical manufacturing, bus transportation, public utilities, and postal services. About 1% of
manufacturing industries and 5% of services industries have limits on foreign ownership in
Taiwan and Kao Corporation develops its consumer products business which involves in
manufacturing industries. According to Taiwan's Financial Supervisory Commission, Taiwan has
removed all restrictions on foreign ownership which was benefit to those foreign investment
companies
such
as
Kao
Corporation.
(Retrieved
from
http://www.businessweek.com/globalbiz/content/oct2008/gb20081015_358966.htm)
Due to occurrence of economic crisis, Kao (Taiwan) Corporation was strongly hit by the
global recession. Kao was unwilling to invest significant sums on new product development,
marketing, and distribution activities as a result of the uncertain economies climate. Therefore,
Kao launched new imported products during 2008 instead of taking the risk associated with
developing and introducing new products. In 2009, the global economy is gradually recovering.
But, Kao (Taiwan) Corporation was still slowdown in the business performance. Thus, Kao
(Taiwan) Corporation concentrated on sales price adjustments, cost reduction activities, cutbacks
in its expenditures, and also strengthens its business by strengthening its core brands.
leads
to
more
productivity.
(Retrieved
from
http://www.trueknowledge.com/q/what_is_the_population_of_taiwan_in_2010)
In the 1960s, foreign investment in Taiwan helped introduce modern, labor-intensive
technology to the island, and Taiwan became a major exporter of labor-intensive products. In the
1980s, focus shifted toward increasingly sophisticated, capital-intensive and technologyintensive products for export and toward developing the service sector which export technologyintensive products to low-wage host countries such as China. Taiwan in the long run should
specialize in the business in which they enjoy comparative advantage and export the product
while it will import other products in which other countries have comparative advantage, if free
trade is allowed. (Retrieved from http://www.traveldocs.com/tw/economy.htm)
10
11
12
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3.0 RECOMMENDATION
After we have gone deeply about Taiwan culture, now, we have suggested on certain
aspects of doing business in Taiwan. Since Taiwanese is tend to be more collectivism and grouporiented, Kao (Taiwan) Corporation should encourage this cultural to be practice in the
organization such as provide social training and team building programs in order to build team
work and create harmonious between the employees. By this, Kao (Taiwan) Corporation can
increase efficiency in its production and relationship among the organizations.
Due to Kao is original from Japan, Kao (Taiwan) Corporation should provide Japanese
language education training to its employees in order to help employees to know other country
language. Kao (Taiwan) Corporation should provide education in English to the employees as
English has become increasingly important worldwide.
languages, especially English may become competitive advantages for Kao (Taiwan)
Corporation.
Kao (Taiwan) Corporation should develop its own innovative product based on adoption
on each Taiwan culture, improve existing product which more suit Taiwanese, and enhance the
company brand name by doing more advertising or promotion programs to compete with the
other potential competitors.
Based on the research, we found that Kao (Taiwan) Corporation still imports the some of
the material for production in Taiwan. This may increase the cost of production and also increase
the selling price. As a solution, Kao (Taiwan) Corporation can try to adopt the local material in
produce new production if there is available. Thus, the selling price will be more acceptable for
the consumers.
It is important to keep interact with consumers besides just offer better products or
promotion, Customer Relationship Management is very important to maintain a customer loyalty
to ensure them to have a preference towards Kaos product rather than other competitor
product. For example, Kao can come out with a Campaign or Contest which can make
consumers to participate in is able to enhance the company image and creates an indelible
memory to customers.
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4.0 CONCLUSION
Based on our assignment, we understand that different countries have different cultures.
Thus, companies should learn how to better adapt into the foreign countrys culture and
understanding new cultures. As Kao is original from Japan, the business expansion to Taiwan in
1964 is difficult because of the different macro factors of countries, this is likely to be the reason
that Kao adapted joint venture with Taiwanese to enter Taiwan market beside financial problem.
After a few decades since Kao had enter to Taiwan market till now, Kao has successfully
penetrate throughout the Taiwan Market and become one of the famous brand amongst Taiwan
Market.
As a conclusion, it is important for a multinational company to analyses a country
background before enter to the market as different countries have different in term of culture,
policies and economical issues and those important measurement should taken into
consideration. Mutually-beneficial economic cooperation between countries and companies will
provide an even better future to the world economy.
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References:
Adler, N. (1991). International Dimensions of Organizational Behavior, 2nd ed., PWS-Kent,
Boston.
AMB
country
risk
report.
(2009,
August).
Retrieved
from
http://www3.ambest.com/ratings/cr/reports/Taiwan.pdf
Factbox Five political risk to watch for Taiwan. (2009, November). Retrieved from
http://www.reuters.com/article/idUSSP3401620091103
Griffin, R.W. & Pustay, M.W. (2010). International Business (6th ed.). Upper Saddle River, New
Jersey: Pearson/Prentice Hall.
Growing
marketing
Taiwan
(n.d.).
Retrieved
June
28,
2010,
from
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in
Taiwan
(n.d.).
Retrieved
July
21,
2010,
from
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Kaos
company
profile.
(2009).
Retrieved
June
30,
2010,
from
http://www.kao.com/jp/en/corp_imgs/corp_info/report00_008.pdf
16
Meen, W. (1995). The intercultural values questionnaire. Issues and Observations, Vol. 15,
No. 1, pp. 10-11.
Population
of
Taiwan.
(2010,
July).
Retrieved
July
10,
from
http://www.trueknowledge.com/q/what_is_the_population_of_taiwan_in_2010
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Economic
(2010).
Retrieved
July
18,
2010,
from
http://www.traveldocs.com/tw/economy.htm
Taiwan removes foreign ownership restrictions. (2008, October 15). Bloomberg Business Week.
Retrieved
July
19,
2010,
from
http://www.businessweek.com/globalbiz/content/oct2008/gb20081015_358966.htm
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history
and
culture
(n.d.).
Retrieved
July
1,
2010
from
http://www.everyculture.com/Sa-Th/Taiwan.html
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June
30,
2010,
from
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