A Study on How to Maintain Their Competitive Advantages: An Empirical Analysis of Taiwanese Footwear Manufacturing Firms

Abstract

In this paper, we study how Taiwanese footwear manufacturing firms maintain their competitive advantages in the environment where many firms have been shifted to low-wage level countries. According to reports of The British Footwear Association regarding the global footwear export statistics, Taiwan was the biggest exporter of footwear products during the years from 1976 to 1987. However, in the past two decades many Taiwanese firms have moved their production function to southeastern Asian countries such as Thailand, Indonesia, Vietnam, and China. Meanwhile they still keep their high-value jobs in Taiwan. Since footwear manufacturing industry is labor intensive, how Taiwanese firms cope with the threat from the competitors of low-wage countries is an interesting research topic. Based on our research we find some strategies of maintaining competitive advantage. We summarize the several strategies which are effectively adopted. Firstly, utilizing the technological innovation capacities and product design experiences which have been well-built over the past three decades; secondly, keeping continuous improvement on quality; thirdly, establishing their own brand names for their own products; fourthly, managing their own market channels; fifthly, reinforcing their flexibility for specific customer demand; and Finally, making use of the labor-division concept and keeping high value-added jobs in Taiwan.