Souplantation in Taiwan
Question 1: Discuss the role of environmental factors in determining Souplantation’s success chances in Taiwan?
Economic Environment
One of the most important environmental factors the company should take into consideration is the local economic environment. The deterioration of Taiwan's economy in 2002 had been unprecedented due to political turmoil and the stalemate in cross-strait relations with mainland China, which damaged confidence in those looking to expand into the region.
When Taiwan experienced a serious recession in the years 2001 and 2002, the Taiwanese government made every effort to save the economy, including their decision to join the WTO in 2002. The overall tariff had been 8.2% in Taiwan and after joining the WTO the tariff was reduced to 5.54%(over 32% reduction). There were 4491 tariff reduction projects. The tariff of agricultural products for which the average nominal tariff was 20.02% dropped to 12.9% (over 35% reduction). Taiwan is basically an island country, which heavily relies on imports in many fields. The reduction in agricultural import tariffs has helped the restaurant industry to cut costs. With the developing trade relationship through the straits, many agricultural products can enter Taiwan markets at lower prices from mainland China. Taiwan’s economic recovery had been conducive in the following years to the growth of the restaurant industry.
Nevertheless, in 2005, Taiwan's economic growth rate again fell sharply. Both production and demand weakness caused by lack of economic growth caused concern of a recession (industrial competitiveness led to the decline in trade surplus and politics were a major factor). During the year 2005, Taiwan’s economy actually ran in the opposite direction to Asia's overall economic development trends. In 2005, Asian economies continued to grow throughout the region as a whole, economic growth was expected to reach 6.5%. The Taiwanese economy, however, has continued to maintain a
Economic Environment
One of the most important environmental factors the company should take into consideration is the local economic environment. The deterioration of Taiwan's economy in 2002 had been unprecedented due to political turmoil and the stalemate in cross-strait relations with mainland China, which damaged confidence in those looking to expand into the region.
When Taiwan experienced a serious recession in the years 2001 and 2002, the Taiwanese government made every effort to save the economy, including their decision to join the WTO in 2002. The overall tariff had been 8.2% in Taiwan and after joining the WTO the tariff was reduced to 5.54%(over 32% reduction). There were 4491 tariff reduction projects. The tariff of agricultural products for which the average nominal tariff was 20.02% dropped to 12.9% (over 35% reduction). Taiwan is basically an island country, which heavily relies on imports in many fields. The reduction in agricultural import tariffs has helped the restaurant industry to cut costs. With the developing trade relationship through the straits, many agricultural products can enter Taiwan markets at lower prices from mainland China. Taiwan’s economic recovery had been conducive in the following years to the growth of the restaurant industry.
Nevertheless, in 2005, Taiwan's economic growth rate again fell sharply. Both production and demand weakness caused by lack of economic growth caused concern of a recession (industrial competitiveness led to the decline in trade surplus and politics were a major factor). During the year 2005, Taiwan’s economy actually ran in the opposite direction to Asia's overall economic development trends. In 2005, Asian economies continued to grow throughout the region as a whole, economic growth was expected to reach 6.5%. The Taiwanese economy, however, has continued to maintain a