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<strong>Br<strong>and</strong></strong> <strong>Management</strong> <strong>Models</strong> <strong>in</strong> <strong>Cultural</strong> <strong>and</strong> <strong>Creative</strong> <strong>Industries</strong>:<br />

Taiwan Cases<br />

Shun-Ch<strong>in</strong>g Horng, PhD<br />

Dist<strong>in</strong>guished Professor, Department of Bus<strong>in</strong>ess Adm<strong>in</strong>istration,<br />

National Chengchi University, Taipei, Taiwan<br />

e-mail: schorng@nccu.edu.tw<br />

An-Hs<strong>in</strong> Chang<br />

Doctoral C<strong>and</strong>idate, Department of Bus<strong>in</strong>ess Adm<strong>in</strong>istration,<br />

National Chengchi University, Taipei, Taiwan<br />

e-mail: ahchang@nccu.edu.tw<br />

Kuan-Yang Chen<br />

Doctoral C<strong>and</strong>idate, Department of Bus<strong>in</strong>ess Adm<strong>in</strong>istration,<br />

National Chengchi University, Taipei, Taiwan<br />

e-mail: kuanyang@nccu.edu.tw<br />

Abstract Recent studies have shown that firms <strong>in</strong> the cultural <strong>and</strong> creative <strong>in</strong>dustries<br />

can build more endur<strong>in</strong>g competitive advantages if they are able to create unique<br />

br<strong>and</strong> values. Many firms <strong>in</strong> the cultural <strong>and</strong> creative <strong>in</strong>dustries have been through the<br />

transformation of the Taiwan economy. Through OEM/ODM partnerships with major<br />

foreign clients, they have be<strong>in</strong>g upgrad<strong>in</strong>g <strong>in</strong>to own br<strong>and</strong> bus<strong>in</strong>esses <strong>and</strong> their value<br />

cha<strong>in</strong> activities have been changed accord<strong>in</strong>gly. It is critical for these firms to<br />

underst<strong>and</strong> the value cha<strong>in</strong> <strong>in</strong> the cultural <strong>and</strong> creative <strong>in</strong>dustries <strong>and</strong> specify where<br />

they are positioned <strong>in</strong> the value cha<strong>in</strong>. It is argued that Porter’s value cha<strong>in</strong> model<br />

(1985) typically does not fully describe the structure of the cultural <strong>and</strong> creative sector<br />

as the elements of culture <strong>and</strong> creativity have been highly valued as the heart of value<br />

creat<strong>in</strong>g process <strong>in</strong> the sector. This study aims to focus on the development of br<strong>and</strong><br />

management model <strong>in</strong> the cultural <strong>and</strong> creative <strong>in</strong>dustries <strong>and</strong> cultural <strong>and</strong> creative<br />

value cha<strong>in</strong> <strong>in</strong> Taiwan. Practical implications for firms runn<strong>in</strong>g bus<strong>in</strong>ess <strong>in</strong> cultural<br />

<strong>and</strong> creative <strong>in</strong>dustries are discussed.<br />

Keywords: cultural <strong>and</strong> creative <strong>in</strong>dustries, cultural <strong>and</strong> creative value cha<strong>in</strong>, craft<br />

br<strong>and</strong><br />

1


Introduction<br />

In recent years, cultural <strong>and</strong> creative <strong>in</strong>dustries (hereafter referred to as CCIs) play<br />

an important part <strong>in</strong> the national development policies among developed <strong>and</strong><br />

develop<strong>in</strong>g countries (UNCTAD, 2008). Nations around the world have been putt<strong>in</strong>g<br />

effort to promote their CCIs. To follow this global economic trend, Taiwan<br />

government also has <strong>in</strong>vested significant time <strong>and</strong> resources to def<strong>in</strong>e <strong>and</strong> develop<br />

CCIs over last few years. In 2002, the government officially listed the CCIs <strong>in</strong>to the<br />

“Challenge 2008 National Development Plan” which would cost an estimated about<br />

US$75 billion. With this comprehensive six-year national development plan, Taiwan<br />

government expects to reach world class st<strong>and</strong>ard <strong>in</strong> products <strong>and</strong> technologies,<br />

stimulate the economy, encourage foreign <strong>in</strong>vestment <strong>and</strong> boost employment <strong>in</strong><br />

Taiwan (Government Information Office, 2002a). Accord<strong>in</strong>g to the figures from<br />

Taiwan Executive Yuan (the Cab<strong>in</strong>et), the sales revenues of CCIs <strong>in</strong>creased<br />

approximately US$56 billion from 2002 to 2007, <strong>and</strong> the value added of the <strong>in</strong>dustries<br />

<strong>in</strong>creased 1approximately US$29.8 billion, with an average of 7% growth per year<br />

(Taiwan Executive Yuan, 2009a).<br />

CCIs encompass various activities that <strong>in</strong>cludes the cultural <strong>in</strong>dustries with all<br />

cultural or artistic mode of production, whether live or produced as an <strong>in</strong>dividual unit<br />

(UNESCO Global Alliance for <strong>Cultural</strong> Diversity, 2006). CCIs are high <strong>in</strong> creativity<br />

nature <strong>and</strong> with potentials <strong>in</strong> economic development; however, how do the<br />

value-added activities actually work out still rema<strong>in</strong> unclear (Eikhof <strong>and</strong> Haunschild,<br />

2007). As the commercialization process <strong>in</strong> CCIs is dist<strong>in</strong>ct from manufactur<strong>in</strong>g<br />

bus<strong>in</strong>ess, past studies have emphasized the need for develop<strong>in</strong>g a bus<strong>in</strong>ess model<br />

concept to better articulate how values are created or added <strong>and</strong> for whom <strong>in</strong> the CCIs<br />

(Hartley, 2004; Taylor, 2006). Undoubtedly, Porter’s value cha<strong>in</strong> model is the most<br />

well-known model that has been used to analyze a firm’s value creation. The model<br />

was build with a production-oriented notion <strong>and</strong> a focus on the dynamics of<br />

<strong>in</strong>ter-connections with<strong>in</strong> the productive sector, <strong>and</strong> therefore it may not be completely<br />

applicable for cultural <strong>and</strong> creative bus<strong>in</strong>esses. The aims of this study were to develop<br />

the value cha<strong>in</strong> model of CCIs <strong>in</strong> Taiwan <strong>and</strong> to explore how do firms <strong>in</strong> this <strong>in</strong>dustry<br />

create value for their customers through a series of value creation activities.<br />

2


Theoretical backgrounds<br />

CCIs <strong>in</strong> Taiwan<br />

The orig<strong>in</strong>al concept of the CCIs can be referred to “those activities which have<br />

their orig<strong>in</strong> <strong>in</strong> <strong>in</strong>dividual creativity, skill <strong>and</strong> talent, <strong>and</strong> which have the potential for<br />

wealth <strong>and</strong> job creation through the generation <strong>and</strong> exploitation of <strong>in</strong>tellectual<br />

property” (DCMS, 1998). Accord<strong>in</strong>g to United Nations Educational, Scientific <strong>and</strong><br />

<strong>Cultural</strong> Organization (UNESCO, 2007), the concept of “cultural <strong>in</strong>dustries” centers<br />

around the cultural heritage <strong>and</strong> traditional <strong>and</strong> artistic elements of creativity, <strong>and</strong> the<br />

term “creative <strong>in</strong>dustries” tends to emphasize on <strong>in</strong>dividual creative talent <strong>and</strong><br />

<strong>in</strong>novation, <strong>and</strong> on the exploitation of <strong>in</strong>tellectual property.<br />

The Taiwan Council for <strong>Cultural</strong> Affairs proposed the concept of “Develop<strong>in</strong>g<br />

<strong>Cultural</strong> <strong>Industries</strong>, <strong>and</strong> Br<strong>in</strong>g<strong>in</strong>g Culture <strong>in</strong>to <strong>Industries</strong>” <strong>in</strong> 1995, <strong>and</strong> this “cultural<br />

<strong>in</strong>dustry” concept later has been put <strong>in</strong>to the national “Community Development”<br />

plan. With the trend of globalization <strong>and</strong> technological advancement, the government<br />

adapted a knowledge-based economy that focuses on “creativeness” <strong>and</strong> the<br />

ma<strong>in</strong>stream concept of “Th<strong>in</strong>k Globally, Act Locally” <strong>in</strong> the twenty-first century.<br />

“Challenge 2008 National Development Plan” published <strong>in</strong> 2002 prescribed that<br />

products with local cultural characteristics are expected to be developed through a<br />

comb<strong>in</strong>ation of art creativeness <strong>and</strong> commercial operations, which will not only<br />

deepen people’s cultural identities toward their own cultures but also <strong>in</strong>crease the<br />

added value for these <strong>in</strong>dustries (CCA, 2010). Under this national policy, thirteen<br />

sub-sectors are def<strong>in</strong>ed as Taiwan’s CCIs , <strong>in</strong>clud<strong>in</strong>g: visual arts <strong>in</strong>dustry, music <strong>and</strong><br />

perform<strong>in</strong>g arts <strong>in</strong>dustry, cultural exhibition facilities <strong>in</strong>dustry, h<strong>and</strong>icrafts <strong>in</strong>dustry,<br />

film <strong>in</strong>dustry, broadcast<strong>in</strong>g <strong>in</strong>dustry, publish<strong>in</strong>g <strong>in</strong>dustry, advertis<strong>in</strong>g <strong>in</strong>dustry, design<br />

<strong>in</strong>dustry, designer br<strong>and</strong> <strong>and</strong> fashion <strong>in</strong>dustry, architectural design <strong>in</strong>dustry, <strong>in</strong>novative<br />

lifestyle <strong>in</strong>dustry, digital leisure <strong>and</strong> enterta<strong>in</strong>ment <strong>in</strong>dustry (CEPD, 2002).<br />

CCIs <strong>in</strong> Taiwan are def<strong>in</strong>ed as <strong>in</strong>dustries that are “orig<strong>in</strong>ated from creative or<br />

cultural accumulation <strong>and</strong> has the potential of creat<strong>in</strong>g wealth <strong>and</strong> jobs <strong>and</strong> improv<strong>in</strong>g<br />

the liv<strong>in</strong>g environment by develop<strong>in</strong>g <strong>and</strong> deploy<strong>in</strong>g the <strong>in</strong>tellectual property” (Hsiao<br />

et al., 2010). Under the concept of “<strong>in</strong>dustrialization of culture” <strong>and</strong> “culturalization<br />

of <strong>in</strong>dustry” proposed by Taiwan’s government (Wu, 2003), many entrepreneurs <strong>and</strong><br />

enterprises have transformed their bus<strong>in</strong>esses <strong>in</strong>to the creative <strong>and</strong> cultural fields. As<br />

CCIs <strong>in</strong> Taiwan face strong competition from regional neighbor countries <strong>in</strong> recent<br />

years (UNCTAD, 2004), the promotion of the concept of “culture <strong>in</strong>dustrialization,<br />

<strong>in</strong>dustries culturalization” aims to identify <strong>and</strong> realize the economic value of local<br />

cultural assets through the process of commercialization <strong>and</strong> enhance competitiveness<br />

3


of local cultural <strong>and</strong> creative firms through an appreciation <strong>and</strong> application of the<br />

essence of Taiwan’s history <strong>and</strong> culture (Chung, 2012).<br />

Economic development <strong>in</strong> Taiwan<br />

Taiwan’s economic strength started with commodity <strong>and</strong> labor-<strong>in</strong>tensive<br />

<strong>in</strong>dustries <strong>in</strong> 1960s. S<strong>in</strong>ce the mid 1980s, the economy has been rapidly restructured<br />

<strong>and</strong> shifted from production of labor-<strong>in</strong>tensive goods to less labor-<strong>in</strong>tensive service<br />

(Government Information Office, 2002b). Many firms <strong>in</strong> the CCIs have been through<br />

a series of transformation of the Taiwan economy. After decades of serv<strong>in</strong>g as<br />

OEM/ODM suppliers, the value activities of these firms have been reconfigured <strong>and</strong><br />

core competences have been changed accord<strong>in</strong>gly. Some of these firms have<br />

committed to achiev<strong>in</strong>g transform<strong>in</strong>g <strong>in</strong>to br<strong>and</strong>-name companies by seek<strong>in</strong>g<br />

emerg<strong>in</strong>g opportunities <strong>in</strong> cultural <strong>and</strong> creative market <strong>and</strong> creat<strong>in</strong>g strong br<strong>and</strong>s of<br />

great creativity <strong>and</strong> design capabilities. Today, nearly 90% of all cultural <strong>and</strong> creative<br />

bus<strong>in</strong>esses <strong>in</strong> Taiwan are operated as sole proprietorships or micro-enterprises <strong>and</strong>, as<br />

such, are entirely different <strong>in</strong> nature from other types of bus<strong>in</strong>esses (Taiwan Executive<br />

Yuan, 2009b).<br />

In fact, most cultural <strong>and</strong> creative bus<strong>in</strong>ess owners or entrepreneurs may identify<br />

themselves as artists <strong>and</strong> designers rather than bus<strong>in</strong>ess people. Their devotion to<br />

work is often driven by cultural or creative factors rather than economic ones. S<strong>in</strong>ce it<br />

is wildly believed that “<strong>Creative</strong> people tend to rebel at efforts to manage them overly<br />

systematically”(Florida, 2002), commercialization of creativity <strong>and</strong> artistic motivation<br />

management may run risk of damag<strong>in</strong>g these resources (Eikhof <strong>and</strong> Haunschild,<br />

2007). Although there is a basic conflict <strong>in</strong>herent <strong>in</strong> the nature of creativity/art <strong>and</strong><br />

bus<strong>in</strong>ess/management (Eikhof <strong>and</strong> Haunschild, 2007), cultural <strong>and</strong> creative<br />

entrepreneurs need to develop <strong>and</strong> <strong>in</strong>tegrate both creative <strong>and</strong> bus<strong>in</strong>ess skills to be<br />

competitive <strong>and</strong> susta<strong>in</strong>able <strong>in</strong> today’s marketplace.<br />

Value cha<strong>in</strong> <strong>in</strong> CCIs<br />

Porter def<strong>in</strong>ed the value cha<strong>in</strong> (hereafter referred to as VC) as a “framework for<br />

identify<strong>in</strong>g all these activities <strong>and</strong> analyz<strong>in</strong>g how they affect both a company's costs<br />

<strong>and</strong> the value delivered to buyers” (Porter, 2001). At one end the process of shift<strong>in</strong>g<br />

goods are orig<strong>in</strong>ation <strong>and</strong> the producer; <strong>in</strong> the middle the commodity <strong>and</strong> its<br />

distribution; at toward the other end is the consumer or end user (Hartley, 2004).<br />

Porter’s value cha<strong>in</strong> model (1985) consists of primary activities (<strong>in</strong>bound logistics,<br />

4


operations, outbound logistics, market<strong>in</strong>g <strong>and</strong> sales, <strong>and</strong> service) <strong>and</strong> support<br />

activities the firm marshals to create values (<strong>in</strong>frastructure, human resource<br />

management, technology development, <strong>and</strong> procurement).<br />

However, there are several limitations when apply<strong>in</strong>g Porter’s model to the CCIs.<br />

First, the CCIs may not fit easily <strong>in</strong>to the conventional value cha<strong>in</strong> model as they<br />

share many characteristics of the service economy (Potts, Cunn<strong>in</strong>gham, Hartley <strong>and</strong><br />

Ormerod, 2008). Value cha<strong>in</strong> model is logical for firms that produce tangible products,<br />

such as cars or consumer electronics that require physical <strong>in</strong>puts <strong>and</strong> large <strong>in</strong>vestment<br />

for production capacity <strong>and</strong> raw materials, but service oriented firms rely more on<br />

human assets as the primary ways for value creation (Cartwright <strong>and</strong> Oliver, 2000).<br />

Furthermore, the conventional VC cannot capture the complexity of roles <strong>and</strong><br />

relationships <strong>in</strong> the CCIs. <strong>Cultural</strong> goods are practical examples of the hybrid <strong>and</strong><br />

complex relationships between production <strong>and</strong> consumption, the symbolic mean<strong>in</strong>gs<br />

<strong>and</strong> materials (Pratt, 2008). O’Connor (2010) argued that “technological reproduction<br />

is necessary but not sufficient to expla<strong>in</strong> the expansion of cultural commodity<br />

production”. Pratt (2008) further elaborated that “front l<strong>in</strong>e” artists or cultural workers<br />

are often seen as only ones who create value; however the <strong>in</strong>ter-relationships of the<br />

whole production cha<strong>in</strong>, <strong>and</strong> its ways that it is variously embedded <strong>in</strong> space also need<br />

to be appreciated. One of the most important po<strong>in</strong>ts is that the CCIs <strong>in</strong>volve higher<br />

value-added <strong>in</strong>puts (i.e., digital contents, knowledge <strong>and</strong> skills) <strong>in</strong> the upstream<br />

activities of the VC, <strong>and</strong> this is where they take their part <strong>in</strong> the knowledge-based<br />

economy (Cunn<strong>in</strong>gham, 2002).<br />

Methodology<br />

This study attempts to explore the characteristics of VC <strong>in</strong> Taiwan’s CCIs <strong>and</strong><br />

underst<strong>and</strong> how the two dist<strong>in</strong>ct elements, creativity <strong>and</strong> bus<strong>in</strong>ess, actually <strong>in</strong>fluence<br />

creative production. Rather than probability sampl<strong>in</strong>g, the aim of the study was to<br />

explore the variation of issues across the samples (Weiss, 1994). A discovery-oriented<br />

approach was adopted to conduct secondary data analysis <strong>and</strong> <strong>in</strong>-depth <strong>in</strong>terviews.<br />

The sampled enterprises are representative cases of the observed phenomenon; these<br />

enterprises are successful <strong>in</strong>novators <strong>and</strong> have successfully pursued own-br<strong>and</strong><br />

strategies <strong>in</strong> their respective sectors <strong>in</strong> CCIs. Due to the range <strong>and</strong> diversity of<br />

different sectors with<strong>in</strong> CCIs, these sectors have very diverse <strong>in</strong>dustrial traits.<br />

Therefore, this study focuses on craft sector only, as craft sector is also one of those<br />

<strong>in</strong>dustries which has high economic value <strong>and</strong> possesses strong cultural connotations<br />

(UNESCO, 2000).<br />

5


Craft <strong>in</strong>dustry is def<strong>in</strong>ed as one of the CCIs <strong>in</strong> Taiwan <strong>and</strong> is essential to the<br />

economy. Crafts <strong>in</strong> Taiwan are dynamic <strong>and</strong> diverse. Local crafts <strong>in</strong> Taiwan were<br />

made accord<strong>in</strong>g to daily needs of people, climate, natural environment, culture,<br />

history <strong>and</strong> religion (NCTA, 2012). Though many traditional crafts <strong>in</strong> Taiwan are<br />

orig<strong>in</strong>ated from the M<strong>in</strong>g or Ch<strong>in</strong>g Dynasty of Ch<strong>in</strong>a, from Kenton <strong>and</strong> Fujen areas <strong>in</strong><br />

Ch<strong>in</strong>a, because of the <strong>in</strong>fluence of the local aborig<strong>in</strong>e crafts, Japanese arts,<br />

<strong>in</strong>dustrialized thoughts, <strong>and</strong> western ideas, they have evolved from history <strong>and</strong><br />

developed their own features (NTCRI, 2001).<br />

Today, several award-w<strong>in</strong>n<strong>in</strong>g craft bus<strong>in</strong>esses emerged, such as “FRANZ” <strong>and</strong><br />

“tittot”, they have become successful <strong>in</strong>ternational br<strong>and</strong>s. This study adopted an<br />

exploratory-oriented approach <strong>and</strong> multiple-case method. Company cases were<br />

chosen based on their pursuit of own-br<strong>and</strong> strategies, sales <strong>and</strong> profitability.<br />

Considerable documentary <strong>in</strong>formation was gathered from cultural <strong>and</strong> creative<br />

enterprises to enable the triangulation of emerg<strong>in</strong>g themes.<br />

F<strong>in</strong>d<strong>in</strong>gs <strong>and</strong> Discussion<br />

This study characterizes three bus<strong>in</strong>ess models <strong>in</strong> which they are posited <strong>in</strong> five<br />

key components of the value creation process: culture, ideation, design, production,<br />

<strong>and</strong> market<strong>in</strong>g (<strong>in</strong>clud<strong>in</strong>g br<strong>and</strong><strong>in</strong>g <strong>and</strong> channel). Due to unique characteristics of<br />

CCIs, first two components (design <strong>and</strong> production) are considered as fundamental<br />

elements <strong>and</strong> serve as the accelerator of core value for craft products. The VC <strong>in</strong> this<br />

study is called the “culture creative-based value cha<strong>in</strong> (hereafter referred to as CCVC)<br />

(Figure 1).<br />

Values<br />

Figure 1: Culture <strong>Creative</strong>-Based Value Cha<strong>in</strong><br />

6


The value cha<strong>in</strong> <strong>in</strong> craft <strong>in</strong>dustry beg<strong>in</strong>s from “digg<strong>in</strong>g” culture which provides<br />

symbolic mean<strong>in</strong>gs to our daily lives. <strong>Cultural</strong> products carry a symbolic value which<br />

is determ<strong>in</strong>ed by the social <strong>and</strong> cultural mean<strong>in</strong>gs associated with it <strong>and</strong> this allows<br />

consumers to express <strong>in</strong>dividual <strong>and</strong> social identity via the purchase <strong>and</strong> use of the<br />

products (Ravasi <strong>and</strong> R<strong>in</strong>dova, 2008). <strong>Cultural</strong> context serves <strong>in</strong>put for the process of<br />

ideas generation, which is the <strong>in</strong>itial moment <strong>and</strong> forum of creativity <strong>and</strong> can be<br />

carried out either <strong>in</strong> non-formal <strong>and</strong> <strong>in</strong>formal sett<strong>in</strong>gs (Mercer, 2002). There is a large<br />

usage of oriental cultural elements, especially Ch<strong>in</strong>ese culture <strong>in</strong> the creation of<br />

cultural <strong>and</strong> creative products <strong>in</strong> Taiwan, as well as the process of <strong>in</strong>corporat<strong>in</strong>g local<br />

Taiwanese culture, Western <strong>in</strong>fluences <strong>and</strong> modern technologies. Crafts are not only<br />

made by h<strong>and</strong> with traditional craft methods, but are also made with specialized<br />

equipments.<br />

Next, cultural product design is a process of reth<strong>in</strong>k<strong>in</strong>g or review<strong>in</strong>g cultural<br />

features, <strong>and</strong> a new product is designed through redef<strong>in</strong><strong>in</strong>g cultural features of current<br />

products. Dur<strong>in</strong>g the design stage, culture serves as a source of <strong>in</strong>novation <strong>and</strong><br />

creativity <strong>and</strong> both practical use <strong>and</strong> the aesthetic qualities of products are highly<br />

considered. Production is about the transformation of ideas <strong>in</strong>to cultural goods <strong>and</strong><br />

services <strong>and</strong> it deals people, resources, productive capacities <strong>and</strong> tra<strong>in</strong><strong>in</strong>g available to<br />

aid the transformation of ideas <strong>in</strong>to marketable products (L<strong>and</strong>ry, 2000). Due to the<br />

limitation of supply <strong>and</strong> customer’s requirements of mass customization, overseas<br />

production has become a common practice <strong>in</strong> Taiwan. Although these observed craft<br />

br<strong>and</strong>s moved their production bases <strong>in</strong>to Ch<strong>in</strong>a <strong>and</strong> other countries, the production of<br />

unique <strong>and</strong> premium products as well as their R&D <strong>and</strong> design center is ma<strong>in</strong>ly<br />

located <strong>in</strong> Taiwan.<br />

These chosen craft bus<strong>in</strong>esses have long been noticed of the power of br<strong>and</strong><br />

value, br<strong>and</strong>-build<strong>in</strong>g had been an ambition s<strong>in</strong>ce the firm was established. Bus<strong>in</strong>ess<br />

owners, who possess artist or craftsman background, are lack of management <strong>and</strong><br />

bus<strong>in</strong>ess skills to run the bus<strong>in</strong>ess. A firm may choose to specialize <strong>in</strong> one or more<br />

value cha<strong>in</strong> activities <strong>and</strong> outsource the rest. The extent to which a firm performs<br />

upstream <strong>and</strong> downstream activities is decided by its level of vertical <strong>in</strong>tegration.<br />

“Tittot” is a f<strong>in</strong>e craft br<strong>and</strong> <strong>in</strong> Taiwan, engaged <strong>in</strong> the crystal glass design,<br />

process<strong>in</strong>g, produc<strong>in</strong>g <strong>and</strong> sale of glass craft products <strong>and</strong> accessories. In 1994, the<br />

two brothers, Yuan-Shan Wang <strong>and</strong> He<strong>in</strong>rich Wang together established tittot.<br />

He<strong>in</strong>rich Wang stated that artists usually focus on creat<strong>in</strong>g artworks <strong>and</strong> do not have<br />

much of an idea about or energy left for production, management <strong>and</strong> market<strong>in</strong>g <strong>and</strong><br />

therefore br<strong>and</strong> management needs to rely on bus<strong>in</strong>ess professionals (GIO, 2009).<br />

Artists normally shun entrepreneurship have stereotypic ideas of artists (Kamara,<br />

7


2004), it is important to match artistic expertise with knowledge of bus<strong>in</strong>ess, though<br />

not necessarily with<strong>in</strong> same person (Pratt, 2008). Tittot has its own R&D <strong>and</strong> br<strong>and</strong><br />

management teams. He<strong>in</strong>rich Wang is the company's creative director, specializes <strong>in</strong><br />

an ancient glassmak<strong>in</strong>g technique called “lost wax cast<strong>in</strong>g” <strong>and</strong> also has been<br />

design<strong>in</strong>g <strong>and</strong> produc<strong>in</strong>g glass artwork while explor<strong>in</strong>g new glassmak<strong>in</strong>g techniques<br />

over the years (GIO, 2004). His work has been collected by museums around the<br />

world s<strong>in</strong>ce the early 1990s. On the other h<strong>and</strong>, professional management <strong>and</strong><br />

market<strong>in</strong>g activities are directed by his brother Yung-Shan Wang, who has years of<br />

experience <strong>in</strong> bus<strong>in</strong>ess management (GIO, 2009).<br />

“Artilize Worldwide” is a good example of collaborative work among artists,<br />

designers <strong>and</strong> entrepreneurs. Artilize Worldwide, a market<strong>in</strong>g firm which focuses on<br />

promot<strong>in</strong>g cultural <strong>and</strong> creative products. The ma<strong>in</strong> bus<strong>in</strong>ess activities <strong>in</strong>cluded<br />

<strong>in</strong>ternational market<strong>in</strong>g of art items, design <strong>and</strong> copyright for art items, <strong>and</strong> art<br />

advertis<strong>in</strong>g (MEA, 2011). “Tales by Pave” is the company’s craft product l<strong>in</strong>e of<br />

decorative art tiles. These tiles are created <strong>in</strong> square <strong>and</strong> rectangle ornamental stone<br />

decopaves that are illustrated with ancient myths <strong>and</strong> stories (Artilize Worldwide,<br />

2008). Successfully collaborat<strong>in</strong>g of its design <strong>and</strong> production outsourc<strong>in</strong>g partners<br />

enables the company to build up br<strong>and</strong> new bus<strong>in</strong>ess models with art <strong>and</strong> creative<br />

products.<br />

“FRANZ” designs, creates <strong>and</strong> markets a variety of functional <strong>and</strong> home decor<br />

accessories. The collection <strong>in</strong>cludes porcela<strong>in</strong> tableware, vases <strong>and</strong> decorative accents,<br />

as well as a l<strong>in</strong>e of exquisite jewelry (Franz, 2012). Franz Porcela<strong>in</strong> is well-known for<br />

its harmonic balance of Ch<strong>in</strong>ese f<strong>in</strong>e porcela<strong>in</strong> crafts with styl<strong>in</strong>g <strong>in</strong>spired by classic<br />

Art Nouveau designs. FRANZ’s parent company, Seagull Décor, has more than two<br />

decades experience as premiums <strong>and</strong> gifts manufacturer. The achievement of the<br />

br<strong>and</strong> is largely contributed to the company’s management of market knowledge,<br />

recruitment of talented porcela<strong>in</strong> makers <strong>and</strong> designers, advanced technology <strong>and</strong> the<br />

capability of establish<strong>in</strong>g sales channels. FRANZ’s dist<strong>in</strong>ctiveness is built on a high<br />

level of vertical <strong>in</strong>tegration <strong>and</strong> attempts to create value at different VC activities. It is<br />

notable that a young br<strong>and</strong> like FRANZ (founded <strong>in</strong> 2002), actively attend<strong>in</strong>g<br />

<strong>in</strong>ternational exhibitions <strong>and</strong> trade shows <strong>and</strong> accumulat<strong>in</strong>g awards is a crucial way to<br />

maximize br<strong>and</strong> exposure <strong>and</strong> attracts attention from potential customers overseas.<br />

8


VC Unit<br />

Model<br />

Model 1:<br />

Craftsman/<br />

Designer<br />

br<strong>and</strong>s<br />

Company <strong>and</strong><br />

br<strong>and</strong> name:<br />

“Tittot”<br />

Model 2:<br />

Company<br />

with<br />

market<strong>in</strong>g<br />

competence<br />

Company:<br />

“Artilize<br />

worldwide”<br />

(<strong>Br<strong>and</strong></strong> name:<br />

Tales by Pave).<br />

Model 3:<br />

vertically<br />

diversified<br />

company<br />

Company <strong>and</strong><br />

br<strong>and</strong> name:<br />

“FRANZ”<br />

Table 1: Bus<strong>in</strong>ess models drawn from CCVC<br />

Culture Ideation Design Production<br />

Products<br />

convey the<br />

Ch<strong>in</strong>ese way<br />

of th<strong>in</strong>k<strong>in</strong>g<br />

<strong>and</strong> liv<strong>in</strong>g.<br />

<strong>Br<strong>and</strong></strong> stories<br />

are derived<br />

from<br />

traditional<br />

oriental<br />

culture, such<br />

as Ch<strong>in</strong>ese<br />

culture <strong>and</strong><br />

Indian culture.<br />

Blend<strong>in</strong>g the<br />

essence of<br />

oriental<br />

culture with<br />

the styl<strong>in</strong>g<br />

<strong>in</strong>spired by<br />

Western<br />

artistry.<br />

Us<strong>in</strong>g<br />

Ch<strong>in</strong>ese<br />

philosophies<br />

to deepen the<br />

creations<br />

profundity.<br />

Stone carv<strong>in</strong>g<br />

of legendary<br />

stories <strong>and</strong><br />

historic<br />

objects on<br />

square <strong>and</strong><br />

rectangle<br />

ornamental<br />

stone deco<br />

paves.<br />

Comb<strong>in</strong><strong>in</strong>g<br />

traditional<br />

Ch<strong>in</strong>ese<br />

character<br />

with classic<br />

art nouveau<br />

designs to<br />

create more<br />

various<br />

styles.<br />

�In-house<br />

craftsman <strong>and</strong><br />

designers.<br />

�Integrat<strong>in</strong>g<br />

Ch<strong>in</strong>ese<br />

culture to<br />

perform unique<br />

lost-wax<br />

cast<strong>in</strong>g.<br />

�Collaborat<strong>in</strong>g<br />

with local<br />

designers <strong>and</strong><br />

artists <strong>in</strong> Asian<br />

countries.<br />

�Design<br />

elements are<br />

dawn from<br />

symbolic<br />

patterns <strong>and</strong><br />

architectural<br />

elements.<br />

�In-house<br />

Porcela<strong>in</strong><br />

craftsman <strong>and</strong><br />

designers<br />

�Design<br />

themes are<br />

<strong>in</strong>spired by<br />

nature, <strong>and</strong><br />

through the<br />

designer's<br />

<strong>in</strong>terpretation<br />

of the oriental<br />

philosophy.<br />

Mass-produced<br />

commodity<br />

made <strong>in</strong> Ch<strong>in</strong>a,<br />

<strong>and</strong> high-end<br />

pieces<br />

produced <strong>in</strong><br />

Taiwan.<br />

�Us<strong>in</strong>g of local<br />

raw materials.<br />

�Outsourc<strong>in</strong>g<br />

manufactur<strong>in</strong>g<br />

to collaborat<strong>in</strong>g<br />

production<br />

sites.<br />

�Design <strong>and</strong><br />

research center<br />

is based <strong>in</strong><br />

Taiwan.<br />

�Mass<br />

production<br />

carefully<br />

managed <strong>and</strong><br />

closely<br />

supervised <strong>in</strong><br />

Ch<strong>in</strong>a.<br />

Market<strong>in</strong>g<br />

<strong>Br<strong>and</strong></strong><strong>in</strong>g Channel<br />

Founder,<br />

He<strong>in</strong>rich Wang a<br />

well-known film<br />

director <strong>and</strong> is<br />

devoted to the<br />

development of<br />

Ch<strong>in</strong>ese crystal<br />

glass<br />

craftsmanship.<br />

The br<strong>and</strong> is<br />

owned <strong>and</strong><br />

managed by<br />

“Artilize<br />

Worldwide”.<br />

This br<strong>and</strong><br />

def<strong>in</strong>es itself as<br />

a smart <strong>and</strong><br />

modern player<br />

of transform<strong>in</strong>g<br />

art to life.<br />

�Integrat<strong>in</strong>g<br />

Eastern<br />

aesthetics <strong>and</strong><br />

Western art<br />

nouveau style<br />

� A br<strong>and</strong><br />

captures<br />

<strong>in</strong>ternational<br />

fame for its<br />

decorative,<br />

functional arts<br />

<strong>and</strong> crafts.<br />

�Items are<br />

sold <strong>in</strong><br />

high-end<br />

department<br />

stores.<br />

�Products<br />

distributed to<br />

more than 80<br />

specialized<br />

counters.<br />

The collection<br />

now are<br />

distributed <strong>in</strong><br />

30 countries<br />

with over 450<br />

shops.<br />

�Items are<br />

sold<br />

worldwide to<br />

prestigious<br />

department<br />

stores.<br />

�Over 6,000<br />

po<strong>in</strong>t of sales<br />

over the<br />

world.<br />

9


Conclusions<br />

Taiwan has successfully executed export-oriented development strategy to drive<br />

up economic growth; however the economic performance of Taiwan’s craft goods <strong>in</strong><br />

the global market still lag beh<strong>in</strong>d other countries <strong>in</strong> the same region (CCIPT, 2008).<br />

Firms <strong>in</strong> CCIs can develop more endur<strong>in</strong>g competitive advantages if they are able to<br />

create unique br<strong>and</strong> values. It is critical for these firms to underst<strong>and</strong> the value cha<strong>in</strong><br />

<strong>in</strong> CCIs <strong>and</strong> assess their positions <strong>in</strong> the value cha<strong>in</strong>. We attempt to depict the value<br />

cha<strong>in</strong> of CCIs <strong>in</strong> Taiwan us<strong>in</strong>g craft sector as an example. Many firms <strong>in</strong> CCIs have<br />

been through the transform<strong>in</strong>g OEM/ODM bus<strong>in</strong>ess model <strong>in</strong>to OBM, the value<br />

activities of these firms have been reconfigured <strong>and</strong> core competences have been<br />

changed accord<strong>in</strong>gly. Therefore, <strong>in</strong> the follow<strong>in</strong>g phase, this research will adopt field<br />

<strong>in</strong>vestigations <strong>and</strong> <strong>in</strong>terviews with more representative CCIs cases from different<br />

sectors to <strong>in</strong>crease the generalizability of the study. This research will cont<strong>in</strong>ue to<br />

identify the key success factors to br<strong>and</strong> management <strong>in</strong> CCIs <strong>and</strong> also <strong>in</strong>vestigate the<br />

dynamic process of value reposition<strong>in</strong>g <strong>and</strong> reconfiguration of value activity among<br />

cultural <strong>and</strong> creative firms. Another attempt is to identify strategic groups of these<br />

firms that adopted similar value configurations <strong>and</strong> growth path.<br />

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13

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