Digital Entertainment Services in Taiwan: A Strategic Reference, 2006
ICON Group International, July 2007, Pages: 56
How to Strategically Evaluate Taiwan
Perhaps the most efficient way of evaluating Taiwan is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to digital entertainment services are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
Framework for Prioritizing Countries
Demand/Market Potential Driven Firm
Relative Accessibility
Accessibility/Supply Averse Firm
In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market - neither a market-driven nor a cost-driven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).
Latent Demand and Accessibility in Taiwan
This report provides a detailed overview of factors driving latent demand and accessibility for digital entertainment services in Taiwan. Latent demand is largely driven by economic fundamentals specific to digital entertainment services. This topic is discussed in Chapter 2 using work carried out in Taiwan on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for digital entertainment services in Taiwan. I use the term “micro” since the discussion is focused specifically on digital entertainment services.
Chapter 3 deals with macro-accessibility and covers factors that go beyond digital entertainment services. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Taiwan:
Openness to Trade in Taiwan
Openness to Direct Investment in Taiwan
Local Marketing and Entry Strategy Alternatives
Local Human Resources
Local Risks
Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in Chapter 3, which is a general overview of investment and business conditions in Taiwan. Chapter 3 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Taiwan. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.
1 INTRODUCTION & METHODOLOGY 1
1.1 What Does This Report Cover? 1
1.2 How to Strategically Evaluate Taiwan 1
1.3 Latent Demand and Accessibility in Taiwan 3
2 DIGITAL ENTERTAINMENT SERVICES IN TAIWAN 4
2.1 Latent Demand and Accessibility: Background 4
2.2 Latent Demand: Market Composition 4
2.2.1 Gaming 5
2.2.2 Music and Video 5
2.2.3 Digital Television 6
2.2.4 Mobile Telephone Services 7
2.3 Market Data 7
2.4 Latent Demand: Leading Segments 7
2.5 Key Suppliers 8
2.6 Prospective Buyers 9
2.7 Accessibility: Market Entry 9
2.8 Market Issues and Obstacles 9
2.9 Accessibility: Trade Events 10
2.10 Key Contacts 10
3 MACRO-ACCESSIBILITY IN TAIWAN 11
3.1 Executive Summary 11
3.1.1 Quality of Infrastructure 11
3.2 Political Risks 12
3.3 Marketing Strategies 12
3.3.1 Distribution Channel Options 13
3.3.2 Pricing Issues 14
3.3.3 Creating a Sales Office 14
3.3.4 Selling Strategies 14
3.3.5 Advertising and Trade Promotion 14
3.3.6 Entering the Consumer Goods Market 17
3.3.7 Major Types of Modern Retail Stores 18
3.3.8 Additional Sales Routes 19
3.3.9 Public Sector Marketing 19
3.3.10 Protecting Your Products from IPR Infringement 20
3.3.11 Local Attorneys, Accountants, and Insurance Companies 20
3.3.12 Checking Bona Fides 21
3.4 Import and Export Regulation Risks 21
3.4.1 Tariffs on Non-Agricultural Products 21
3.4.2 Tariffs on Agricultural Products 21
3.4.3 Special Safeguards 22
3.4.4 Valuations on Imports 22
3.4.5 Controls on Exports 22
3.4.6 Documentation Required for Trade 23
3.4.7 Entering Temporary Imports 23
3.4.8 Public Procurement 24
3.4.9 E-Commerce 24
3.4.10 Additional Trade Issues 24
3.4.11 Adherence to Free Trade Agreements 25
3.4.12 Taiwan Customs Contact Information 25
3.5 Taiwan Standards Regime 25
3.5.1 National Standards 25
3.5.2 Technical Regulations 28
3.5.3 Labeling Issues 28
3.5.4 Key Contact Information 29
3.6 Investment Climate 30
3.6.1 Openness to Foreign Investment 30
3.6.2 Conversion and Transfer Policies 31
3.6.3 Expropriation and Compensation 32
3.6.4 Dispute Settlement 32
3.6.5 Performance Requirements and Incentives 32
3.6.6 Right to Private Ownership and Establishment 33
3.6.7 Intellectual Property Risks 33
3.7 Transparency of the Regulatory System 33
3.7.1 Capital Market Risks 33
3.7.2 Political Violence 34
3.7.3 Corruption 34
3.7.4 Bilateral Investment Agreements 35
3.7.5 OPIC and Other Investment Insurance 35
3.7.6 Labor 35
3.7.7 Free Trade Zone Options 36
3.7.8 Foreign Direct Investment 36
3.8 Trade and Project Financing 36
3.8.1 The Banking System 36
3.8.2 Foreign Exchange Control Risks 37
3.8.3 Financing Availability 37
3.8.4 Methods of Payment 37
3.8.5 Financing Projects 37
3.8.6 Supplier Credit Guarantee Program 38
3.8.7 Major Banks with Corresponding U.S. Banking Arrangements 38
3.8.8 U.S. Banks 38
3.9 Travel Issues 39
3.9.1 Local Business Practices 40
3.9.2 Local Holidays Observed 41
3.9.3 Business Infrastructure 41
3.9.4 Country Data 43
3.10 Key Contacts 43
3.10.1 U.S. Trade-Related Contacts 43
3.10.2 Washington, D.C.-Based Country Contacts 44
3.10.3 AmCham and Bilateral Business Councils 45
3.10.4 Trade and Industry Associations 45
3.10.5 Public Agencies 45
3.10.6 Other U.S. Government Contact Numbers 47
4 DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS 48
4.1 Disclaimers & Safe Harbor 48
4.2 Icon Group International, Inc. User Agreement Provisions 49
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