Chiao Fu's Overseas Investment Strategy

Abstract

Chiao Fu is a traditional polyurethane foam manufacturer from Taiwan. In 1990, in response to the overseas expansion of major buyers and increasing production costs, Chiao Fu invested in both China and Thailand. For nearly 30 years, the company has developed along with the economic growth of these two host countries. However, the different political, social, and cultural backgrounds of China and Thailand have led to various changes in economic and industrial development trends. Chiao Fu may continue to pursue growth in China and enjoy the cultural and linguistic advantages that Taiwanese companies have benefitted from in the vast and fast-growing Chinese market. Alternatively, given the harsh regulatory conditions in China, the rise of local players, and the Taiwanese government's New Southbound Policy, Thailand is seemingly increasingly attractive to Chiao Fu because of its political stability and economic outlook. With limited resources, Chiao Fu has come to another major decision point after 30 years of overseas expansion. Accordingly, this case study enables us to examine how small and medium-sized enterprises develop overseas expansion strategies and face challenges generated by social and political changes.