With the trend of globalization and the pricing competition caused by China’s manufacturing business, the quality of products is not the only issue that companies are facing now. There are some external as well as internal challenges that companies must face. External challenges include the competitive trend caused by the dynamic environmental movements and the operation pressure caused by facing competitors; internal operation issues concern the integration of the value chain and the continuous improvements in innovative managing skills.
The case of research is the largest company professionally specialized in manufacturing drain cleaners in Taiwan. The company’s sales are entirely dedicated to exporting to the international market; and OEM and ODM are its main type of business. Since drain cleaners are categorized as part of the hand tools industry, we must study the trends and activities in such industry. The business opportunities in the hand tools industry mainly depend on consumer’s demand, providing different services to different individual buyers, and the opportunities derived from the rise of the home improvement market. Therefore, in the hand tools market, drain cleaner manufacturers should take into consideration that products which suit the new generation’s need better and are with high economic values are more likely to satisfy the consumer needs.
For the main thesis of this paper, we will be looking at discussions about the innovative and competitive strategies from literatures related, and the research will be based on J. Barney’s resource base theory. Through the individual case analysis and roots study in grounded theory, I hope to achieve the following research purposes in this paper:
1. To analyze the operating state and the competitive advantages in the drain cleaner market in hand tools industry in Taiwan.
2. How the company in case study responds to the external challenges and which competitive advantages and strategies the company should take when facing such challenges.
The conclusions to the company competitiveness in the case study based on relevant researches are as follows:
1. Regarding the case company’s competitiveness against foreign markets, cost competitiveness is not recommended as the main business strategy, but rather to develop and strengthen the high-price, high quality markets as the recommended strategy.
2. Facing the competitions that the rise of the Asian market and the emergence of the Chinese consumer market brought, I suggest that the company in the case study, with its regional economic advantage, should consider a strategic alliance with European or American buyers or strategically to consider a joint venture with them.
3. Regarding providing useful information about the competitive market for the company, cost accounting standard procedures and other statistics related forms are strongly recommended to be established within the company in the case study, in order to provide critical information for managing department.
4. With the coming of the era of internationalization, the company in the case study should design an international personnel training system as well as a strategic human resource department to face the related incoming issues that internationalization may bring.
Keyword：strategy, core competence, dynamic competition, internationalization