Investment and management in Energy-saving construction materials market in contemporary Taiwan.
According to Chen et al (2011), it is in Taiwan government's ambition to regulate and promote the market with a new market structure, which encourages different companies with light and deep experiences to contribute to the supply and demand network. The new companies are not well aware of the factors that have critical impact on the investment and management dealings. Sometimes their business concepts might clash with the government policies. Thus, there is a game situation going on between them, and their new methods to analyze the investment and management will need to follow the government's trends in improving the general market environment.
Source: Bakhoum and Brown (2012)
Bakhoum and Brown (2012) pointed out that ESCM is defined as the kind of construction materials that are environmentally safe in its production, sales and consumption processes. Ideally, it is the perfect material for construction projects in the new age. Nonetheless, because of its nature of being based in advanced technology, the costs for making them are not cheap, which has discounted the motivation to use them. In turn, it has become larger and more difficult to manage and invest in and it is not a good sign for the whole industry and practice. In this case, many approaches to the investment and management of ESCM in Taiwan are concerned with how to reduce the said costs and uplift the general motivation to use.
Many international companies have already been doing business with Taiwan's ESCM market, such as IKEA. Their business projects are part of the motivation to improve the investment and management approaches, so that the customers can appreciate more what benefits they could actually get from it. After all, the ESCM has become an important part of the whole construction material market, no matter in Taiwan or in the world (Nikje, 2012). The investment and management must be planned strategically and according to the dynamics of the world market. For example, many foreign countries have their own policies to regulate the import and export of construction materials. In the foreign trade, toxic materials or those with low environmental standards are strictly prohibited.
In Taiwan, ESCM has become a new and rising industry. Especially, the citizens' environmental awareness is one of the driving force to make many companies pursue a long-term development. In some sense, they have the same motive in using ESCM. According to Hopkinson (2007), the trend started in 2005 where the green products in the construction market were the most asked for ones in Taiwan. This includes both the individual customers and organizations. 75% of the construction market have available materials for different grades of projects. Even foreign buyers were fluxing to Taiwan for this kind of products. Many Taiwanese companies thus have become more and more experienced in this business and developed their own types of materials according to the tastes, inspection criteria and actual needs of the customers.
The effective practice of ESCM in contemporary business relies on equally well planned and executed financial and managerial tasks. However, Hopkinson (2007) research also shows that every year there are 20-25% of construction materials withdrew from Taiwan's ESCM market. The biggest reason for this phenomenon is that that lacked a realistic and responsive method to maintain the dealings of financial and managerial tasks. Over time, they were crowded out by competition or just run of out customers, and thus their businesses. The research problem is therefore based in why these companies could not have found the best approach to complete the said tasks while the remaining could. There must be some fundamental discrepancy that lies in their foundational business concept and vision in the market and the overall conducts concerning costs, turnover and competition responses.
Furthermore, Little (2011)’s research indicates that 65% of the successful ESCM companies in Taiwan prioritize their financial and managerial tasks over the research and development projects. There was also a obvious organizational mission to gather funding through various resources to support the operations. This element across the world is treated as an organic part of the ESCM business and a substantial amount of effort was directed to it. In other words, it is the driving force for growth in a constantly changing and challenging market. In many other types of market, the trend is entirely different. For example, in the consumer electronics industry, the focus on research and development projects is more important than any other dealings. This is a crucial discrepancy universal in small and big companies. Hence, there must be some link between this and the best approach to successful investment and management of the ESCM market.
Source: Baloyi and Bekker (2011).
Part of the problem is found in association with the lack of awareness of ESCM materials in Taiwan before 2005, which is rarely combined with the theme of finance and management of the market (Baloyi and Bekker, 2011). They tend to be researched separately. However, since the management issues can be traced back to the customer satisfaction and their awareness of the market's vitality and dynamics, it is not viable to do so. Therefore, this research will investigate the problem both from the industry and the customers' angles, combining their responses to the market strategies, and how they can impact of the buyers' behaviors. As a result, how the companies have planned and executed their investment and management can be reflected in them.
According to Ajamu and Adedeji(2013), there is also a somewhat discouraging performance in the ESCM industry's attempt to maintain the return on their investment. Susman and Dowson (2012)’s evidence similarly indicates the average ROI among Taiwanese ESCM companies was 5%-8% lower than that of the industry standards in the Asia Pacific. Therefore, this research is also all about nailing down what causes for this problem and what new methods or models of investment and industry management can be introduced to them in order to help obtain improved ROI. As the marginal profit in the market becomes smaller due to more competition from China mainland, this problem has called for more attention than ever.
By addressing the two issues above, about funding plans and management practice can be effective to improve the condition of Taiwan's ESCM market for the general public (consumers) and business operators from a practical angle. It must be emphasized again that if the market condition is low financially, there are many barriers to obtaining a fluent financing flow throughout the industry and manage the risks involved with financing a large amount of money from the government to the various companies of ESCM.