RAISING COMPETITIVENES BY CORPORATE CROSSOVER
Ghi-Hwei Kao ,
Dept of Industrial & Commercial Design, Oriental Institute of Technology
58,Sec.2,Sihchuan Rd.,Pan-Chiao City,Taipei County 22061,Taiwan (R.O.C.)
ghi.box@gmail.com
ABSTRACT
As the issues of corporate competitiveness, the crossover on Asian 3C product enterprises is continuously emphasized. Increasingly
business operation and development is affected by the rising tide of expectation over crossover between western and eastern society.
Some regional economic areas take advantage of this in order to build the crossover league, which affect the market competition of industries.
Successful international enterprises believe that crossover policies help to strengthen its superiority, not only consolidate real strength,
reduce future risk, but also represent the difference with regard to corporate images and brand distinctions.
This thesis observes and compare with three product laptop computer, mobile phone and digital camera in Taiwan, Korea and Japan
which crossover with western leading corporate brands in relative product domain. The objective is to build up a crossover strategy
structure manifesting corporate benefits, motives, company internal resources required and execution methods. This thesis plans to identify corporate crossover strategy methodology: combining motives, corporate reactions, strategy process, crossover strategy correlation,
implementation and the innovation level in enterprises.
Keywords—Heterogeneous business alliances
Introduction
Heterogeneous business alliance refers to the market principal of diverse types and diverse levels which have formed into a profit community for greater and possible scale and effect so that it can expand its market share, increase its scope of informational, and resources
utility. Alliance of heterogeneous is often formed into strategic partnership relationship with several enterprises of different nature so
they can jointly share their resources, and achieve the objective of mutually complementary.
In most of the cases, when enterprises are successfully in running their brand names they would always hope to extend the economic
effect of their brand name. As a result, the new products they developed are very likely to be extensive, or sometimes too extensive and
that that might jeopardize its previous brand name image.
As viewed from past studies, if the association between the extend brand name and existing brand name is not strong enough, it is hard to
receive recognition from consumers. Based on the reports of Sloan Management Review of July 2008, it is very much up to the “abstract” and “solid” image of consumer mindset as well as the changes of contextual scenario if the products from the extended brand
name would match with the previous products.
Measures of heterogeneous business alliance
Conventionally, the measures of heterogeneous business alliance for industrial products can be found in three categories:
The first one is cooperation among peers, in other words, it is to work with your market competition. For instance, one would ally its
secondary opponent to strike hard on its primary opponent, examples are like Acer and Texas Instruments, IBM and Leveno. And the
usual development of such measure would end up with enterprise acquisition.
The second is the integration between the upper-stream and lower-stream vendor suppliers, which embraces the production. Manufacturing, marketing of product, sometimes it would even encompass research and development. What Asian industry is most good at is category of the kind, while product OEM can best illustrate model of such integration. For instance, G-phone works with Google as it is the
integration of one single Intel processor with PC brand name, and we can find such product integrated with different brand names.
Case study
This research select three types of internationalized Asian 3C product enterprises to compare from Korea, Taiwan, and Japan: LG and
Samsung from mobile phone market, Acer and ASUS personal from computer market, Sony and Panasonic from digital camera; each of
them are competitor in their market, all of them have horizontal cooperated with European traditional brand experience in past few years
to extend their corporate image; to probe into the relationship between enterprise's competitiveness and corporate image
For market competition that remains dominated by Europe and the US today, if Asian brand names can provide products of inexpensive
price but above average quality there will be definitely be certain market share in the US and Europe. However, profit-making by Asian
brand names remain hard to be largely boosted. For instance, the price tag of a medium-priced notebook can hardly match with that of an
Italian well-noted shirt, and it is why in this wave of trend we can observe the chic of heterogeneous business alliance of some technological industry with Italian fashion business.
Korean cellphones: LG +Prada & Samsung+Armani
LG used to be Lucky-Goldstar electronic, and it was renamed as LG Group in 19895, being the first in Korea that uses English abbreviation as the title of the group. After it is renamed into LG, it has received extremely high appraise for its enterprise transformation and
product design. In January of 2007, when LG of Korea and Prada for Italian fashion boutique have jointly launched cellphone, the other
major manufacturer of cellphone in Korea – Samsung – has also announced by the end of 21007 that it will work with Giorgio Armani to
release a model of cellphone, which is most similar to Armani Phone P520 in outlook, function, and even its price. Prada and
Armani are of Italian fashion boutiques, and are the best love of yuppies with their natural, cold, and simplified style, not to mention that
they are the favorite of the movie and media industry. As for LG and Samsung, one is gold-star and the other three stars – both as leaders
in electric appliance industry of Korea, they resemble not only in brand name but also in products.
LG + Prada
Samsung + Armani
Taiwanese laptop computer: Acer + Ferrari & Asus + Lamborghini
Not being unique itself, Acer begin to work with F1 Scuderia Ferrari in 2003 and develop series of notebook product. In 2006, the competition of Acer – Asus Computer – chose to work the sworn adversary of Ferrari – Lamborghini to develop new model of notebook
computer.
Ferrari and Lamborghini are not just the top racing-car manufacturers in Italy which produce the unapproachable dream product among
car loves, these two manufacturers are always in competition in their professional expertise. As for corporate identity, Ferrari has resorted to highly colorful of lowly dimmed red as its standard color, while Lamborghini has employed highly colorful and highly bright yellow. Furthermore, Lamborghini has made use of the logo “Bull” to fight against that of “Jumping Horse”
What is most interesting is that these two computer companies that see highly of branding has resorted to brand name that begins with
alphabet A. Acer that was established in 1976 renamed its difficult and long name of Multitech into Acer which has found its origin with
Latin, and it tells of evident agility and insight. It is also the language root in bridge, representing the best talent. As for Asus, it is rooted
with Pegasus of Greek mythology, symbolizing success and revitalization. At the beginning when Asus was first established, brand
names as Acer, HP, and IBM were found ranking the top, it is why Asus has deleted the previous three letters and made itself Asus so as
to rank at the top.
ACER + Ferrari
ASUS + Lamborghini
Ferrari logo
Lamborghini logo
Japanese digital camera: Sony + Zeiss & Panasonic + Leica
In comparison to enterprises in Korea and Taiwan, Sony and Panasonic, the two major giants in audio-visual products in Japan, have
conducted lot more rational way in their cooperation. For lens choice, several models of Sybershot under Sony, digital cameras, and
VCR have taken to work with Carl Zeiss of Germany. As for Panasonic, it has decided to work with Leica -- the other major camera
manufacturer of Germany. And the lens of Luminx digital by Panasonic, it has used Leica technology, while Leica has based on some of
he digital camera launched by Panasonic to market their sister models of products. On one hand, Japan is well noted for its electronic
technology and Asian way of scale production, while the optics industry of Germany is well noted for its production of first-class, highquality, and fancy-priced lens. With such cooperation, it has rendered Japan to monopoly itself in the market of digital camera, upgrading
the used to be idiot-camera to much more professional level. Besides, it has also helped Germany traditional camera industry to officially
march itself into the market of digital camera.
Panasonic Lumix DMC-LX2
Leica D-Lux 2
Conclusion
Heterogeneous business alliance can offer both parties with: 1. market expansion, 2. lower marketing cost; 3. cultivation of customer
loyalty; 4. accumulation of stabilized competition competence
Asian technology + profit-making capability of European brand name = OEM + labeling
Though Asian products are given with high quality and inexpensive price and they have mastered certain market share in the US and
Europe, their profitability can hardly match with US or European brand names. Therefore, the brand value is always believed as most
crucial why Asian brand names cannot obtain high profit. On the contrary, since labor cost in the US and Europe has been soaring most
of the industries have to be relocated to Asia for production in order to avoid management crisis as of overtly high production costs. As
such, it has become the other wave of profit-making model as based US and European brand names are integrated with production technology in Asia.
As we have witnessed the cooperation of two major brand names of Samsung and LG with Italian fashion, while two major computer
suppliers of Acer and Asus have chosen to work with Italian fashion and racing-car brand names for cross-over and heterogeneous business alliance. As long as Korean cellphone is labeled with Prada and Armani logo as well as some software with specialized page design
and bell ring. They can easily sell at as much as nearly US$1,000. For Lamborghini and Ferrari, they have to put on the logo of Acer and
Asus on their racing cars, and vice versa. And then, the Italian manufactures will be awarded with franchise money, while Taiwanese
manufacturers will be largely enhanced of their reputation and new consumer groups.
If the brand name value of the US and Europe is from high quality? Or it is of cultural recognition?
The manufacturing technology of product industrialization in Asia has helped many economic miracles so that consumers worldwide can,
in very short-span of time, possess kinds of novel technological products quickly. Besides, it has also rendered the life-cycle of products
shorter and shorter; therefore, these products can, with regard to their brand name resources, hardly be in any match to brand names over
hundred years old, and it is matter of course that their profitability should far lag behind the brand name effect from those of the US and
Europe.
It is always necessary to consider if products are suitable for heterogeneous business alliance, and if the use frequency and life-cycle of
product itself would match. For instance, most people would make use of one cellphone, and the average life-cycle of cellphone is less
than 2 years, but most would hardly put on the same clothes every day. Therefore, the life-cycle of fashion industry is based on season,
while the life-cycle of PC usually lasts for 3 to 5 years. However, the life-cycle for racing car should last more than 5 years as it is not
daily necessity.
If the objective of heterogeneous business alliance is merely to obtain commercial interest rather than the enhancement of product quality
it is likely that short-term sales goal can be very successful. Nonetheless, in the long-run it is definitely not the right path for business as
it is merely putting sales of the brand name and killing chicken for more eggs. On the other hand, the government of Taiwan has been
working for years to promote OBM for one’s brand name though the result is not as good as expected. But we must remember that in the
mindset of US and Europe they have reckoned Japan, Korea, and Taiwan are, in fact, part of the substantial brand name, or how can
Asian products find its stance over global community?
Under traditional and oriental education for years, Japan, Korea, and Taiwan have long established a comprehensive set of highly efficient educational system. Though Asians have, for long-term, been baptized with European and US culture, they remain to be hardworking, industrious, and rest-content life attitude. And it is the belief of Asian that to have a skill with oneself is better than have a
million of fortune, and from such perspective we can truly see that the Asians do, indeed, have their skill of expertise, while what the
European and US have is but their logo.
References
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