Pensonic to Open Branches in Taiwan

Topics: Republic of China, Taiwan, International trade Pages: 12 (3922 words) Published: November 30, 2008
Pensonic Holdings Berhad is a Malaysian company from Penang that produces electrical appliances for consumer use. For the time being, approximately 20% of the products are exported to Singapore, Brunei, Thailand, Sri Lanka, India, Indonesia, Philippines, China, Hong Kong, UAE Dubai, Yemen, Egypt, Kuwait, Jordan and Qatar. The remaining of the products is mainly sold in the local market.

Although the company already exports their products to China, there is potential to penetrate Taiwan market also. Taiwan has shown potential growth in their economy and the country will soon overtake United States to become the second biggest microchip supplier this year. This report will look into the potential to export Pensonic products to Taiwan market.

The group started with a company named Keat Radio & Electrical Co which is founded by Dato’ Seri Chew Weng Khak In 1976, the company went into import, export and wholesaling of electronic and electrical household appliances such as audio and visual items like portable radio cassette, transistor radios, black and white televisions. The sole proprietor business was subsequently incorporated into a private limited company in 1977 under the name of Keat Radio Co. Sdn Bhd. When Dato' Chew was appointed as the distribution agent of Japanese products, Dato' Chew came to realize the opportunities and threats of solely of dependent on Japanese products. Japanese made products were pricier, therefore become relatively expensive for the locals. Dato' Chew with his visionary insight, saw the tremendous business opportunities for locally made audio appliances at more affordable prices. Since then, Pensonic Sales & Service Sdn. Bhd. was set up with various branches throughout the country in 1982. As business improved and progressed, the company started to import all types of audio and visual products from the Original Equipment Manufacturer (OEM) and marketed them under the “PENSONIC” brand name. In 1988, PENSONIC started to manufacture and assemble its own products under the brand, "PENSONIC".

Pensonic realize that domestic market has limitation. Exporting Pensonic products will be continuous efforts to increase their total revenue. (Yunus 2005) This is the common way for a company to go international. Pensonic will use direct export method, whereby the product is export to the agents and distributors that represent Pensonic in Taiwan to sell their products. Pensonic will also need to set up service center in Taiwan to monitor the sales and also provide service after sales to the customer. With the service center setting up in Taiwan, Pensonic company will able to conduct market research, keep up with the distributors and customers, prepare proper documentation and also establish local pricing effectively. Setting up service center in Taiwan will also enable Pensonic to closely monitor the developments and competitions in the market.

The SWOT analysis will be use to analyze the strengths, weakness, opportunities and threats that the Pensonic company is facing currently. The analysis is to look into the external environment and internal environment. External environment are related to the opportunities and threats faced by the company, where else Internal environment are related to the strengths and weaknesses of the company.

Currently, the Pensonic Group has grown tremendously over the last few years, doubling the turnover of RM93 million in 2001 to RM187 million in 2006.The first three quarter of the 2007 financial year shown turnover of RM199 million which is 43% above the RM139 million recorded for the same period in the previous year. This also surpasses the RM189 million turnover achieved for the full year of 2006. Through the report of the financial turnover, there is a positive opportunity for the company to...

Bibliography: Sargunan. A., 2007. Celebrating 25 successful years. The Sun, 5 Jul.
Ain Zulkepli. S., 2007. Pensonic to expand range of products. New Straits Times, 3 Jul.
Department of State Web Site. 2007. Background note: Taiwan. [Online].
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