The Study Of The Taiwan (China) Financial Holding Company's Development Corporate Strategy

Taiwan has suffered the sluggish economy and the rising unemployment rate since year 2000.Consequently,most of Taiwan local banks have presented a worse performance in recent years.As Taiwan has become a member of WTO,its financial market has to be more accessible for foreign companies.Its high NPL (non-performing loan) and the serve competition from foreign banks,force Taiwan banking industry facing a big challenge.Referring to American and Japanese experiences of carrying out financial reform,Taiwan government promulgated the《Financial Holding Company Law》in June 2001 to improve the efficiency and competitiveness of its financial system. The Law creates regulatory framework for local financial institutions to merge or acquire cross-financial industry operations.Many banks,insurance firms and security brokerage houses filed applications for reorganizing into the financial holding firms after the Law was enacted.As of May of year 2002,there are fourteen financial holding company licenses have been issued.Establishing a financial holding company,Taiwan financial institutions expected to increase their international competitiveness and profitability through an economy of scale,multi-faceted marketing and cost savings.The synergy is the main niche of a financial holding company.However,how to combine several subsidiaries to achieve efficient capital allocation and lower operation expenses is the kernel issue for a financial holding company.This research qualitatively analyzes the corporate strategy of an individual financial holding company.It is not a long time since the first financial holding company was funded in Taiwan.Among the financial holding companies,there are limited choices of research target because the research datas such as subsidiaries business types and holding company's strategic alliance are insufficient.Fubon Financial Holding Co.,Ltd finally was chosen as the target for the sake of its well performances and datas integrity.From the research of Fubon Financial Holding Co.,Ltd,we have obtained the following six conclusions:(1) a corporate strategy is affected by the operating environment;(2) resources of a financial holding company influence its corporate strategies;(3) six dimensions of a corporate strategy have to be carefully considered and arranged;(4) six dimensions of corporate strategy affect each other;(5) the organization of a financial holding company affects its policies;(6) a policy of a financial holding company affects its resource conditions and then the latter corporate strategies.A financial holding company draws up the overall strategy for the whole group but does not run business directly.Therefore,how to propose a good corporate strategy and implement it through its critical issue for success is important.