Hong Kong Manufacturing SMEs: Preparing for the Future

85• Companies that try to compete based purely onfinancial strength rather than on other factorslike quality, innovation, flexibility, and reliability,will have to fight hard to survive• SMEs should focus on developing a niche market.Being a niche operator allows an SME to be moreflexible, to make decisions faster, to more quicklyadopt new and suitable technologies, and torapidly respond to market changes. This createsadvantages that are hard for the large Mainlandmould and die manufacturers to competeagainst,• The mould and die industry is capital intensiveand the technology is fast evolving. To remaincompetitive, firms should consider how theywill fund ongoing investments in research anddevelopment and facilities.• Increased environmental and pollution concernsmean that a firm that can claim status as beingenvironmentally friendly is likely to improve itschances of securing business and developing newbusiness relationships.• SMEs won’t have the money to spend tomake quantum leaps in the development oftechnology, but they can be alert to advancesin technology and apply new technology whenothers develop it.• Quality accreditation is an important signalto customers that the company is committedto quality and is a means of driving internalimprovements.The Toy IndustryHong Kong companies play an extremely importantrole in the world toy industry. Together, Hong Kongand the Chinese Mainland account for around 75per cent of global toy manufacturing. Over 70 percent of the toy manufacturers in China are basedin Guangdong Province, mostly in Dongguan,and many of them are Hong Kong companies. 161Hong Kong’s toy industry produces a wide varietyof products. Hong Kong toy manufacturers havedeveloped deep market, customer, logistics, andproduction knowledge and have broad networks.Although increasingly challenged by indigenousChinese enterprises, Hong Kong toy manufacturersdistinguish themselves from competitors throughtheir quick responses, efficiency, reliability, andthrough their compliance with common standards,regulations, intellectual property rights, and codesof practices; the latter features all being critical tosecuring OEM orders from overseas industry giantswho require ethical sourcing practices.Most Hong Kong toy manufacturers engage in OEMproduction, mainly in the form of export processingin Guangdong Province. There is, however, agrowing trend for Hong Kong toy manufacturersto pursue higher value-added activities like productdesign, prototype manufacturing, and branding.Several famous brands have been developed byHong Kong toy manufacturers including Playmates,May Cheong, Silverlit, Toy2R, and Hot Toys.161 www.glokids.cn.