Danny Hsia, General Manager of Team Group Inc. 

Shunning Global Financial Crisis with the “50%, 30%, 20%”Business Model

While talking to DRAMeXchange recently, Team Group Inc. General Manager Danny Hsia said the fact that the global memory industry is encountering a bottleneck recently indicates that it has reached maturity. The market will face consolidation next, during which less competitive participants are bound to be eliminated. Companies that manage to survive will continue to move on, and this more or less is good news for the entire industry, added Hsia.

Team Group has remained cautious amid the recent global financial tsunami. According to Hsia, however, the company’s countermeasure is actually quite simple, which is to diversify operational risks by placing a 50%、30% and 20% distribution in own brand manufacturing, ODM and OEM, respectively. Such strategy helps cushion the impact from the global financial crisis, and is the key to why the company can keep pace and remain healthy while many rivals were forced out of the market.

Hsia revealed that his company only keeps a small team for OEM and ODM R&D. For example, Team Group’s SSD and flash products are designed according to individual clients’ specific needs, and the company also provides products of different specifications. With such strategy to focus on high-quality products in small volume, Team Group helps clients expand gradually, and the method proves to be reciprocal, leading to a win-win situation for both the company and its clients.

As for DRAM module OEM and ODM, Team Group is optimistic about business opportunities brought by the craze in China for the so-called “shanzhai netbooks”, alias do-it-yourself or fake small notebook computers. Team Group expects the trend to help increase its earnings by boosting output. In own brand operation, with the existing product line quite complete already, the company will not develop new products before deliberately evaluating market demand. While own brand manufacturing remains Team Group’s long-term goal, the company will only offer more items after raising the brand’s global awareness.
 

Unique Selling Points

Commenting on the enthusiasm for light and portable products in the consumer electronics market, Hsia emphasized that Team Group’s SSD also has attracted much attention among the general public. Though SSD claims high efficiency, consumers used to avoid the product due to its limited storage capacity. In view of the problem, Team Group manages to satisfy notebook and netbook computer users with 256GB SSD, and has become the No.1 choice for consumers who consider upgrading their computers.

Team Group is now offering a 2.5-inch Combo SSD, in various capacities of 32GB, 64GB, 128GB and 256GB. The SSD is compatible to all 2.5-inch hard disc appliances, including industrial computers, PCs and set-top boxes.

 A Strong Marketing Team for Global Logistics

When asked how Team Group manages its global logistic, Hsia pointed out that the company plans to get more orders in 2009 by focusing on the markets in the Middle East, Central Europe and North America. As Team Group’s headquarters used to be located in the U.S., some of the company’s products have found access to distribution channels in hypermarkets in North America. Central Europe has been seen as a major market, but the company is also actively seeking chances in the rest of the continent.

Southeast Asia has been the stronghold for Team Group’s operations in Asia. As the buying power in Northeast Asia is high, Team Group’s products have been popular there, with sales to the area growing each year. Team Group will integrate its marketing efforts in Northeast Asia this year, in a bid to boost sales as well as market shares. The company’s strategy for the Greater China region, however, is a little different. Team Group started there through cooperation with Chinese partners, focusing on OEM and ODM. It was not until one to two years ago that the company began promoting own brand in China. Team Group’s own brand products are still laying foundation in the Chinese market, but the business is expected to become a major corner stone for its long-term development in the future. 

A Late Boomer of Great Potential

Hsia concluded the interview by urging the Taiwan government to come up with better policies and resolution, in a bid to help local DRAM makers improve global logistics. To make the best of all the time and efforts Taiwan has spent on the industry, the public and private sectors should work together, and take the opportunity during industry consolidation to obtain core technology. Looking forward to the new year of 2009, Hsia predicted with optimism that Team Group, though regarded as a late boomer now, is expected to exert its potential and report stellar performance in the global market.